Paper Example on The Purpose of Business

Published: 2023-03-26
Paper Example on The Purpose of Business
Type of paper:  Critical thinking
Categories:  Goal Business Strategic management Organizational culture
Pages: 7
Wordcount: 1765 words
15 min read

Business is a collective term used to define organized efforts and actions of people to produce and trade goods and services for a profit. Organizations or enterprising entities involved in commercial, professional, or industrial activities are said to practice business. Some could be for-profit, and some others could be non-profit businesses. Businesses are sorted in some sort of hierarchy or bureaucracy, where each position within the company has clearly established duties to which they must adhere to (Carroll, 1991). Therefore, they range from a sole proprietorship to multinational corporations. There are various business theories as well as the theory of utilitarianism that define a business. Such include the theories of organizational behavior, strategic management, and organization management.

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The purpose of the business will depend on the business characteristics, such as the type of operations and the business strategy being implemented. Regardless, every business must give a service or a product that addresses the needs of society. The business should be a product of collaboration, teamwork, and organization (Galegher, Kraut, & Egido 2014). Businesses should be organized around the demanded resources for them to be successful. This organization is different depending on the needs of the society as some could be organized in a way that requires constant cooperation and communication. On the other hand, some would not demand great contact with other workers but depend on automated workflow. Therefore, depending on individual goals, businesses can decide on the best way that they can be organized.

Contrary to common understanding, profits in business are not necessarily monetary gains. Businesses could benefit in any way for as long as it is acknowledged by the entity involved in that activity. According to Carrol (1991), the definition of profits was arguable in the 1960s. A corporation's sole responsibility was only required to maximize financial returns to business shareholders. However, there came various laws that guided business operations such as the Environmental Protection Agency (EPA) and the Consumer Product Safety Commission (CPSC) that gave policies on business gains (Schwartz 1982). Presently, corporate executives are more committed to business gains than financial gains. Many businesses have even neglected profits and focused on business objectives. It is such goals that make them conduct their operations in the long run. For instance, businesses such as Uber and Coca Cola focus on customer satisfaction more than profits. Therefore, for many, if the customer is satisfied, the business tends to excel.

Among the theories of ideal businesses, utilitarianism is a form of consequentialism that differentiates right from wrong by placing a focus on business outcomes. Utilitarianism gives the ethical principles that a business may be required to follow through its operations (Brady & Dunn 1995). The concept is such that the most ethical choice for a business is that it will produce the greatest good for a great number of recipients. Even so, it is difficult for stakeholders to predict the future outcomes of their business, and they may be required to follow the right business ethics to be led to a common good. Business stakeholders can consider shaping their ethical characters and mindset to be successful in their business operations (Freeman & Reed 1983). From a business perspective also, the utilitarian approach could primarily depend on a statistical analysis of the probable outcomes for a business, the cost/benefit ratio, and the focus on the marginal utility of the result of stakeholder action (Hazels 2015). Therefore, a business purpose may be dependent on the approach made by individual stakeholders (Freeman & Reed 1983). Among them are the community, society, friends, family, and the company.

The purpose of business is also aligned with having great benefits for society while creating the least amount of harm. Besides, the greatest amount of suffering should be avoided. The interest of a business entity ought to be considered when coming up with a decision. A business ought to consider the option that produces the best balance of benefits over harm. As a result, modern businesses do not focus on profit as it may not meet the greatest good and the least harm in equilibrium (Hazels 2015). Therefore, it is important that a business purpose is defined in terms of contentment and suffering as well as the value of personal opinion within the business. Sometimes short term and long term effects could be considered for the actions of business stakeholders are the key determinants of the purpose of business.

According to Gustafson (2013), utilitarianism for business is aimed at giving a good foundation for decision making that is founded on a social benefit that could lead the business in ethical behaviors. It is only the presence of misguided criticisms that business fails to attain their intended purposes (Gustafson 2013). Contrary to the common approach, therefore, business ethics do not rely on various principles, including justice. However, business ethics should be biased against the minority. From the utilitarian approach, it is the common interests of stakeholders that are of utmost importance if ideal decisions were to be made. Business can be considered as the means of translating culture and society into the common good. While considering consequentialism as a product of utilitarianism, it may also be important to look into welfarism. Welfarism is when society tends to understand that the wrongness or rightness of business operations is dependent on its well-being (Jones & Felps 2013). Therefore, actions can only be good for the greatest welfare of the society. For instance, if a business increases its wages and benefits for the workers, it should have first improved the well-being of the people and promoted the happiness of its employees.

The purpose of business is also aligned with individualism. For every individual, it is a personal responsibility to pursue happiness. In a business context, stakeholders ought to take actions that lead them to happiness in a way that they can maximize utility (Freeman & Reed 1983). As a result, the stakeholders may realize a superior reputation and advances in the business, such as improved employee satisfaction. It is also important to note that the purpose of business is aligned with aggregation. In that context, the rightness or wrongness of an action is dependent on the ability to balance every benefit brought to every involved person in the business (Jones & Felps, 2013: Porter & Kramer 2011). This is so since the consequence of wrong actions may be felt to almost every stakeholder, including the community and society around the business. Therefore, businesses that focus on quality and safe products may realize the increased intrinsic value and bettered customer satisfaction.

Besides utilitarianism, the theory of organizational behavior determines business outcomes and, as a result, the purpose of a business. Since business operations are conducted collectively, organizational behavior determines whether the purpose of the business will effectively be met. Organizational behavior is centered on job performance, job satisfaction, innovation, and leadership (Metwally, El-Bishbishy, & Nawar 2014). These social factors are critical to organizational performance than other factors, such as the environment. If a job was to be upgraded with better lighting and other design improvements, little change would be noted compared to an improvement in social factors such as appreciation.

According to Zhao, Hwang, & Low (2015), a business is an open system of interrelated entities that transact with the greater environment. In a business context, the drivers of organizational behavior come from the external and internal environments of the business. Therefore, technical, political, and cultural forces are some of the determinants of the purpose of a business. Additionally, the factors that underlay the social context, such as globalization and the emerging e-economy, are some of the drivers of organizations to reinvent themselves for them to thrive. A business's internal needs for growth, restructuring, growth, and new products also determine the intent of the business.

Strategic management is also among the most important factors that determine the purpose of a business and how it can be achieved. From a wider perspective, strategic management is the management of the resources within a business to meet the primary intended purpose. There are various schools of thought with strategic management where the prescriptive approach focuses on how business strategies can be developed, whereas the descriptive approach focuses on how the strategies can be implemented. The purpose of a business is determined by the business culture, the skills, and experiences by employees, the business structure, and some other important factors for organizations (Kettinger & Grover 1995). For a constantly changing business environment, it would be difficult for inflexible companies to succeed in their operations. Additionally, the presence of a barrier between developing strategies and their implementation could make it difficult for managers to assess whether a business's purpose can be achieved. More so, strategic management has some internal and external factors, such as communication practices that could make a company meet its goals.

Strategic management and the strategic management plan are ultimately responsible for determining the extent to which a business operates. The various business actions and ideas from employees sparkle the greater business strategies that can be used to define the purpose of a business. Many recent organizations tend to have various employees with applicable devoted strategies rather than a single workable strategy from the chief executive officer (CEO). Therefore, the strategic management theory lets businesses learn from their past strategies rather than focus on other strategies (Kettinger & Grover 1995). The other purpose of strategic management is to make companies able to compete for greater market advantage. Therefore, putting strategic management plans and principles into workable solutions is critical to achieving a great business purpose. Good strategic management is critical to ensuring long-term business success and achievement of the primary goals of the said business.

The organization management theories are also classified into the scientific management theory, the administrative management theory, and the bureaucratic management theory. These theories, as well as others, such as human relations theory and theory X and theory Y, are applicable to almost every business (McGregor 1960). Putting these theories into practice may let leaders determine the theory that can best fit with their intended purpose. The theory of management states that various workplace tasks ought to be broken down into smaller steps. Therefore, the most successful businesses are those that assign workers to jobs that best match their abilities. Besides, realizing the business purpose may require one to have the workers trained and thoroughly supervised to ensure that they efficiently carry out their chores. A business purpose is aligned to the administrative management. In this case, a business has various functions, including planning, forecasting, organizing, commanding, and controlling. However, all these focus on how managers interact and organize with the employees. It is perfect coordination that lets businesses realize their purpose easily.

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