Week 1 Homework

This weeks readings placed particular emphasis on the question, “what’s the purpose of a business”. In my opinion Charles Handy explored the question quite well. Although I would say that a company or corporation is certainly first and foremost in place to turn a profit and to meet the demands of it’s owners and shareholders, a company exists and thrives in part because it is able to turn this profit, but also for another reason –to give back to the community/society –the idea of social responsibility. As Handy so eloquently writes, “it is [the purpose] to make a profit so that the business can do something more or better. According to Handy, and I would have to agree, that “something” is the real true justification for a business. Later in the same article the author quotes Dave Packard who describes the purpose of a business to be sort of the fruits of collective action and effort. He states that a group of people gets together and exists as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately. Thus, a company makes a contribution to society through collective action –an idea not explored by the other authors in the texts but that I particularly relish and agree with. Lebowitz and Freidman also touch on this idea of collectivity, but there theories are much more rooted in socialism than my own personal views. In my opinion, Drucker would most certainly agree with Handy and Dave Packard’s notion of the purpose of a business. In his text The Dimensions of Management Drucker writes that companies do not exist for their own sake, rather “to fulfill a specific social purpose and to satisfy a specific need of a society, a community, or individuals. Drucker also does not dismiss the notion of profits and sustained profitability. Rather than see profit as the overarching purpose of a company, Drucker sees it as an indicator of its success and a test of its validity.

Personal Reflection:
The articles assigned for this week most certainly play a role and connect to my own life. As a student who has just completed applications to law school I hope to one day work for a corporation (i.e. law firm) and manage employees. Without a firm grasp of the question, “what is the purpose of a business?” I don’t think I would be a very effective component in my organization’s/law firm’s success. Handy spoke a great deal about the difference between best practice and the law (or standard/required practice). Handy spoke to how the law always lags behind best practice –something I agree with but will one day strive to correct. In my opinion businesses need to take a lead in areas such as environmental and social sustainability –rather than be profit obsessed. I hope to one day in the future own and manage my own law practice, and I will set aside valuable time and money to undertake pro-bono work in order to give back to my community. In my opinion, there exists very few companies that sustain and grown without giving back to the community. Philanthropy is an enormous aspect of business, particularly in American business. Furthermore, if one were to only pull one message from these readings that message should be that companies do exist to turn a profit, but they will not continue to exist if profit is the only purpose for which that company is in existence, and that there exists a great social need that must be fulfilled in any business or industry.