It would be interesting to ask people from various walks of
life this question: “ What is the purpose of business?” You would not be surprised if you hear the honest and consistent answer: “to earn profit, of course!” What else, but to make money!”. It seems that the popular belief as to the purpose of business revolves around this: money, profit, financial returns. It is rare or even impossible at all to encounter a businessperson who says that he or she does not care about profit and that his or her only concern is to help and to be of service to the customers, consumers, employees, the government, and the community.
III. LESSON PROPER
The classic business text of the American sociologist and
economist Thorstein Veblen ( 1904 ) said: „ The motive of business is pecuniary gain, the method is essentially purchase and sale. The aim and usual outcome is an accumulation of wealth. Men whose aim is not increase of possessions do not go into business, particularly not on an independent footing.”
Some people say: “ The business of business is business.”
In this chapter, we will explore some positions on the purpose of business. We will start by discussing some subjective reasons for putting up a business. Then, we will delve into the thoughts of some prominent scholars regarding the purpose of business.
Subjective Reasons for Putting Up a Business
Subjective reasons refer to reasons that motivate the
individual to put up a business. They are subjective because these reasons vary from one businessperson to another.
1. The desire to make more income for oneself and his or her family. 2. To become more independent. 3. To continue the legacy of your family. 4. To try a unique and novel idea. 5. The desire for competition. 6. A genuine desire to help people in your small community. 7. You like it and you are attracted to the prospect.
What is the Purpose of Business?
https://www.hufflingtonpost.com/isabel-rimanoczy-edd- /what-is-the-purpose-of-bu_b_/100126.html. The Objective Purpose of Business
In order to clarify our understanding of the objective
purpose of business we will explore the ideas of three scholars:
a. Milton Friedman – American economist
b. Paul F. Camenisch- Professor of Religious Studies c. Ronald Duska- American Professor, scholar in the field of business ethics.
Milton Friedman: Profit as the Primary responsibility of
Business
To increase profits. If you are an executive or manager of a firm, remember that you are not the owner and that you are hired for a purpose. “ Business must be played within the rules of the game” “There is one and only one social responsibility of business- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is, engages in open and free competition without deception or fraud. “Existing laws and moral codes of the society must be consciously be considered by the business entity. .
Not Business as Usual
https://documentary.com/not-business-as-usual/ Paul F. Camenisch: The primacy of Business’ Social Function
The essential element of business- that it exists to
respond to the societal needs for life-sustenance and life-enhancement. Camenisch speculated that “with the passage of time developments such as cooperative efforts, barter, and monetary exchange modified this simple and idyllic situation. There are two essential elements for any proper definition of business: “the provision of goods and services, and the fact that this is done with the intention of making profit.”
Ronald f. Duska: The Motive is Not the Purpose
The main contributions of Duska in the debate
regarding the purpose of business is his argument on the distinction between purpose and motive. The purpose is not necessarily the motive and vice versa. He said “ My motive for doing an action is not necessarily the same as the purpose of the action” He believed that the primary purpose of business is neither personal benefit nor the accumulation of profit. The purpose of business is to respond to the society‟s needs for goods and services..
The 1987 Philippine Constitution
“ The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produce by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.”
The Corporation Code of the Philippines
“… to establish a new concept of business corporations so
that they are not merely entities established for private gain but effective partners of the National Government in spreading the benefits of capitalism for the social; and economic development of the nation.”
Founders of big and successful businesses do not fail to see
as well the narrowness of a solely profit-driven business.
Henry Ford (July 30, 1863 – April 7, 1947) was
American industrialist and business magnate, founder of the Ford Motor Company, and chief developer of the assembly line technique of mass production. By creating the first automobile thamiddle-class Americans could afford, he converted the automobile from an expensive curiosity into an accessible conveyance that profoundly impacted the landscape of the 20th century, considering him to be a revolutionary in the sector.
https://en.wikipedia.org/wiki/Henry_Ford For Motor Company has its share of ethically questionable decisions and practices such as the famous Ford Pinto case in 1970s.
Masaru Ibuka, Japanese businesman
and co-founder of Sony Corporation. In 1946, a fellow wartime researcher, Akio Morita, saw a newspaper article about Ibuka's new venture and after some correspondence, chose to join him in Tokyo. With funding from Morita's father, they co-founded Tokyo Telecommunications Engineering Corporation, which became known as Sony Corporation in 1958. Ibuka was instrumental in securing the licensing of transistor technology from Bell Labs to Sony in the 1950s, thus making Sony one of the first companies to apply transistor technology to non-military uses.He also led the research and development team that developed Sony's Trinitron color television in 1967.Ibuka served as president of Sony from 1950 to 1971, and then served as chairman of Sony from 1971 until he retired in 1976.
He was instrumental for the conceptualization of Sony‟s
Code.
https://en.wikipedia.org/wiki/Masaru_Ibuka
Resources:
1. Business Ethics and Social Responsibility, Franz Giuseppe F Cortez, PhD ( Vibal ) 2. Not Business As Usual https://documentary.com/not-business-as-usual/
7. The Origin of the World‟s Dumbest Idea: Milton Friedman ( Steve Denning ) https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds- dumbest-idea-milton-friedman/
