ONE great discussion topic and area of study has to do with defining exactly what a business is and what its obligations are to society at large and to the many stakeholders (customers, shareholders, employees, suppliers and policy makers) participating in the business environment.
For most businesses, the focus has been first and foremost on serving the customer. For others, the focus is on the shareholder. More recently, we have seen a broadening of the discussion to recognise the importance of multiple stakeholders and the need to promote social, environmental and financial value. In 1970, Milton Friedman argued that the only social responsibility of business was to maximise profits. Levitt (1958) captured this perspective succinctly when he wrote, “the business of business is profits.”
However, in the real world, there is a lot of failure in the delivery of public goods, schools, infrastructure and healthcare. As a result, corporations are being required to participate in broader societal advancement not only by regulators but by investors and other stakeholders — employees, customers, communities. Most business leaders must navigate this line, making sure companies remain profitable enough to fund R&D, innovation and future proofing — while making the world a better
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