Goals of business

Goals of business Introduction In the 1970s, Milton Friedman argued that the only purpose of business was to maximise profits. This was based on the assumption that such action would benefit the society through increased employment. Friedman maintained that taking part in other activities would render a company less competitive and consequently less beneficial to the society, employees and the owners.Advertising We will write a custom essay sample on Goals of business specifically for you for only $16.05 $11/page Learn More Since this time, the debate surrounding the degrees to which today’s organisations should be socially responsible has been the source of much research. Therefore, it is important to note that businesses have other aims other than providing profits to their members. For example, they provide innovation which in return brings growth, employment and lifestyle to people’s lives. Many products in the market have been solving several consumer probl ems than before. Additionally, businesses aim at offering social amenities to the society. As presented in this paper, these goals have their merits and demerits. The aim of this paper is to critic and analyse the claim that the main goal of businesses is profit maximisation. To achieve this different business goals are listed in separate paragraphs. Each paragraph discusses and explains particular business goals. According to Ahlstrom, the major goal of businesses is to create new and innovative products, which bring economic growth and improved living standards of the world’s population. Therefore, businesses should aim at providing these benefits to society. This is because failure to do so can lead to long term drop in the society’s welfare. For example, small drop in growth for a long time can reduce the benefits that firms can offer to the society (Henry 1983). One of the ways that firms can use to achieve growth while at the same time offering innovation is by, effective disruptive innovation. An example of this disruptive innovation is technological innovation. Some of the benefits of constant economic growth are increase in per capita income, job creation, improved revenue and living standards. Failure for businesses to grow or slow growth has led the equity markets to punish the companies that made caused the drop.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More On the other hand, improved growth has made companies to take on better skilled and experienced people. Additionally, the societies’ wellbeing improves and reliance on foreign aid and welfare associations has reduced. Improved living standards have also been realised in countries, such as Europe, North America and parts of Middle East. Therefore, the average annual income of an average individual has raised by around 450% between 1820 and the end of the 20th century. Th is steady growth is an indication of a healthy industry. Another benefit of economic growth is improved life expectancy. For example, a person in 1000 could live for approximately 24 years while today, one can live up to 66 years and even more. From the above analysis, it is clear that businesses should aim at bringing growth and innovative products to the consumers rather than to make profits for the shareholders and owners. This is because, through improved growth, consumer revenues increase leading to improved consumption and living standards (Ahlstrom 2010). According to Bejou, the sole or the major purpose of businesses should be to express compassion which can bring a difference in society. This compassion should be a part of the company’s goals, mission, vision, strategy and decisions that are aimed at reducing the society’s suffering. Some of the values of compassionate companies are integrity, responsibility towards the stakeholders, freedom, Community Social Responsibility (CSR), animal rights protection, among others (Bejou 2011). CSR is the obligation of businesses to offer social, legal and economic support and development to the environment and society. It can also be referred to as ethical contribution towards economic development (Van Beurden Gossling 2008). According to annual reports of research done in 2009, the following are examples of the compassionate companies: Ford Motor Company. This is an award winning company which has created a Food Pantry project that funds food banks across the nation. Additionally, the company’s community service enables its employees to participate in charity works across the globe. For example, in 2009, the company’s employees voluntarily contributed to community service in 44 countries globally (Bejou 2011).Advertising We will write a custom essay sample on Goals of business specifically for you for only $16.05 $11/page Learn More Pepsi Company. The compa ny practices compassion by ensuring good governance towards its investors. Additionally, the company is committed towards providing quality and healthy products to consumers as well as educating consumers about its products and nutrition. It is also at the forefront in protecting human rights and natural resources. The company’s employees enjoy ethical working relationships, empowerment and diversity. Pepsi is also a major contributor to the society. For example, it has contributed funds to help earthquake victims in Chile, Pakistan, China and Haiti. Additionally, it has helped the tsunami victims in Southeast Asia (Bejou 2011). Acropostale Incorporation. The company’s value of integrity enables it to uplift the society’s living standards. For example, during holidays, it offers gifts to hospitalised children, collects and distributes clothes to earthquake victims and the homeless (Bejou 2011). The company also offers support to flood and famine victims. Green M ountain Coffee Roasters Incorporation (GMCR). The company is known for its contribution to environmental conservation, support to the community, its sustainable products and healthy working conditions (Bejou 2011). Target. From 1946, the company has been giving 5% of its income to the community members. Additionally, the company contributes towards environmental conservation. For example, it uses LED (light-emitting diode) displays for lighting. The company is also involved in security enhancement, disaster alleviation and renovation of school programs (Bejou 2011). From the above analysis, it is clear that corporations should be responsible for the environment and the community. Therefore, companies should learn that even though profits are part of the organization’s goals, ethics, vision and compassion are the most important goals; profit maximization should not be their main aim. Corporate Social Responsibility (CSR) has the following characteristics. It is an existing and old idea (it is not new) which portrays the business’s willingness to do good; and its nature and scope are uncertain. Therefore, the CSR that a company conducts depends on upcoming societal needs.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Some of the advocates of CSR are the International Business Forum (IBLF), the World Business Council for Sustainable Development (WBCSD), governmental and nons of unethical business practices include failure to pay the suppliers and provision of poor quality consumer goods and services. Critics of capitalism and the Marxists dismiss these responsibilities and argue that the capitalistic businesses are greedy and unethical (Shaw 2008). In order to achieve ethical behaviour, firms can use a free-market model (Wilcke 2004). Conclusion In this essay, I have argued that businesses have more than one goal. For example, they aim at maximizing profits, offering social responsibility to the society, providing growth and development and ethical responsibility. These goals have merits and demerits to the business. Therefore, businesses should strike a balance and decide the goals that they want to achieve. Businesses that are socially irresponsible, unethical, unlawful and disrespectful to the society’s needs face various challenges. Some of them are economic sanctions and law suits. Additionally, these companies face reduced sales as the society shy away from their products. Eventually, these businesses lose public trust and, which affects their profitability. However, these businesses take pride in reduced costs that relate to social responsibility. This is because they engage in little social responsibility activities and projects. On the contrary, ethical, lawful and socially responsible businesses receive improved reputation which leads to improved sales and growth. This is because the society trusts these firms’ products and services. However, socially responsible businesses face challenges such as increased operating and financial costs. These costs can affect the profitability of the socially responsible firms. Businesses should learn that even though achieving both profit maximization and social responsibility is costly, it results in a wide range of benefits to both the business and society. Given the many benefits associated with social responsibility, the main goal of businesses should not be to increase the wealth of the shareholders and owners. References Ahlstrom, D 2010, ‘Innovation and Growth: How Business Contributes to Society’, Academy of Management Perspectives, vol. 24, no. 3, pp. 10-23. Bejou, D 2011, ‘Compassion as the New Philosophy of Business’, Journal of Relationship Marketing, vol. 10, pp. 1-6. Cosans, C 2009, ‘Does Milton Friedman Support a Vigorous Business Ethics?’, Journal of Business Ethics, vol. 87, no. 3, pp. 391-399. Craig Smith, N 2003, ‘Corporate Social Responsibility: Whether or How?’, California Management Review, vol. 45 no. 4, pp. 52-76. Dalai, L 1998, The art of happiness, Riverhead Books, New York. Henry, M 1983, ‘The Case for Corporate Social Responsibility’, The Journal of Business Strategy, vol. 4 no. 2, pp. 3-15. Husted, B W Salazar, J 2006, ‘Taking Friedman Seriously: Maximising Profits and Social Performance’, Journal of Management Studies, vol. 43 no. 1, pp. 75-91. Pfeffer, J 1998, The human equation: Building profits by putting people first, Harvard Business School Press, Boston. Shaw, W 2009, ‘Marxism, Business Ethics and Corporate Social Responsibility’, Journal of Business Ethics, vol. 84, no. 4, pp. 565-576. Van Beurden, P Gossling, T 2008, ‘The Worth of Values – A Literature Review on the Relation Between Corporate Social and Financial Performance’, Journal of Business Ethics, vol. 82, no. 2, pp. 407-424. Viscusi, WK 1995, Fatal tradeoffs: Public and private responsibilities for risk, Oxford University Press, New York. Wilcke, RW 2004, ‘An Appropriate Ethical Model for Business and a Critique of Milton Friedman’s Thesis’, The Independent Review, vol. 9 no. 2, pp. 187-209. Customer Inserts His/Her Name Customer Inserts ID