The Purpose of Business and Its Duty
While the answer to the question ‘what is the purpose of business‘ seems obvious – to make money – nothing can be further from the truth and here’s why…
Let’s go back to the very basics of business for a moment…
For any one business to come into being, exist and ultimately prosper, it must have something of value to offer to its target audience. Two things stand out here 1) target audience and 2) something of value e.g. services or products
This proves that no business can simply exist in a vacuum. It has to be ‘attached’ to something. But what is that something?
Traditionally – pre globalization – that something was a society in which a business was founded and operated. A society which a business cater to and because of which it came into being in the first place.
In post globalization era – our time – that something is not necessarily a geographically centralized society but rather decentralized or dispersed target audience…often spread worldwide.
But what does all this really mean?
This means that Peter F. Drucker aka ‘the father of modern management’ was spot on when he asserted that “the purpose of business is outside itself.” Indeed, the purpose of business is outside itself. The purpose of business is the fulfillment of needs, wants, desires and pains of its target audience…NOT to make the money or a profit, that’s a mere byproduct.
Don’t get me wrong, money making is very important. In fact, making a profit is duty of every responsible business for without it, the business can’t sustain itself for long.
Another aspect of a business which is unfortunately more often than not overlooked by the business owners and senior executives is giving back. Due to intrinsic and ‘personal’ connection between a business and its target audience, each business must do good. In other words, business must give back to society in which it operates and its target audience which is directly responsible for its wellbeing.
This giving back is known as the corporate social responsibility (CSR) which unfortunately isn’t really talked about much in the corporate world, if at all. Come to think of it, it’s been a really long while since I’ve last read an article in the Economist on CSR. I bet many of you haven’t even heard of it until now.
All millennials read and talk about nowadays is how to build the next Facebook, Snap etc. and make millions and billions in the process. Granted, growing a startup from an idea to ten billion dollar business is very alluring. However, the question is whether such feat is possible without fully understanding the business fundamentals and the very purpose of business?
I personally don’t believe that anyone – no matter how exceptional he or she may be – can ever succeed in business without a firm grip on business fundamentals and purpose of business. Moreover, for s business to be self-sustainable and have a shot at a success, it must be customer-centric and market-driven before all else. Focus on the purpose and the money will follow.
I’d love to hear your thoughts on the purpose of business and CSR. Share your opinion in the comments below.
Author: Dzenan Skulj, a Co-Founder and CEO at Parttimerz. He’s a serial entrepreneur and student of life. Utterly passionate about and strong proponent of entrepreneurship, startups, freelancing and self-development, which he regularly blogs about on his personal blog dzenanskulj.com. Dzenan also actively mentors entrepreneurs on their entrepreneurial journey.