Comments on: The purpose of business

By: Carol Phillips

Carol Phillips — Fri, 10 Apr 2009 13:47:29 +0000

According to Peter Drucker, the purpose of business is to create a customer. If a company does not create value for its customers, it will make neither profits nor social wealth. I like this definition because it puts the emphasis where it should be, generating value. If a company is generating value for its shareholders and society, it will be successful in many ways.

By: Chris MacDonald

Chris MacDonald — Sun, 05 Apr 2009 22:01:13 +0000

The way I like to put it is this:
The purpose of business — the thing we want business to do, and the reason we would ‘invent’ business if we didn’t have it — is to increase social wealth (i.e., the total wealth of society). The means by which it is to do that is by seeking profits (in certain socially acceptable ways — namely by producing a product or service, by innovating, and by seeking efficiency).

By: blakesunshine

blakesunshine — Sat, 04 Apr 2009 03:30:29 +0000

Hey Danielle,

Thanks so much for your comment. If you liked this post you should definitely check out Charles Handy’s article “What’s the purpose of a business?” He goes into much more detail about exactly what you are talking about in your comment.

By: Danielle

Danielle — Fri, 03 Apr 2009 03:09:04 +0000

I love this post. It’s something I think about often and I think you hit the nail on the head. Great quote too!

Another thing to think about: many who argue the “bottom line” standpoint think of a business as an entity separate from emotion, good will, and other human characteristics. They think of it as a machine built for one purpose. However, businesses are run by people, supported by people, and judged by people; this aspect can’t be overlooked. Besides, who wants to invest long-term in a machine that does nothing but take from the community and not give back? Not me.