The Purpose of the Business
September 6, 2011 Leave a comment
The purpose of the business is to maximize shareholder value, but the stakeholder may be enriched in the same process. The media is evaluating the organization according to its hiring and firing policy and practices. The organization may be firing employees because of a strategic and profitable decision but the media will report this decision negatively. The organization may be hiring without good business sense but the media will positively talk about the organization even if the hiring is adding unnecessary cost to the bottom line. Drucker (2004) state that the purpose of business is to create and keep a customer. The customer will create the jobs and will demand products from the organizations. The customer demand will increase the organizational productivity which will enrich the shareholder then the stakeholder.
Rasmussen and Den Uyl (2009) state, the purpose of the business is to maximize the owners value by selling goods or services. Business leaders focus on their strategy’s direction, momentum, and balance to achieve the business goals. Setting and implementing good strategy will maximize the shareholder value and enrich the stakeholder. Walker and Shenkir (2008) state, the leader should examine the effect of the strategy on the organization’s objectives after he or she develop the strategy.
Drucker, P. (2004). The daily drucker: 366 days of insight and motivation for getting the right things done. New York: Harper Business.
Rasmussen, D. B., & Den Uyl, D. J. (2009). Making room for business ethics: Rights as metanorms for market and moral values. Journal of Private Enterprise, 24(2), 1-19. doi: http://www.apee.org/journal-private-enterprise.html
Walker, P. L., & Shenkir, W. G. (2008). Implementing Enterprise Risk Management. Journal of Accountancy, 205(3), 31-31.