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What Are the Fundamental Purposes of Business and the Responsibilities of Strategic Leaders?

What Are The Fundamental Purposes Of Business And The Responsibilities Of Strategic Leaders?

Question

What Are the Fundamental Purposes of Business and the Responsibilities of Strategic Leaders?

Milton Friedman, a noted free-market economist, suggested in 1970 that the sole purpose of business is to generate profit for shareholders. Peter Drucker, a leading management specialist, said during his decades of management consulting, that “the purpose of business is to create and keep a customer.” Norman Wolfe (2010) wrote that "business is a complex living system that directs the flow of energy, and transforms it into desired results." (p. 1)

A fundamental basis for successful strategy, whether at the economy level or the company level, is understanding the purpose of an organization. Confusion over the means/ends relationships within a strategic thinking context can lead to devastation at all levels of the organization. In this Discussion you are asked to reflect upon various points of view that relate to the purpose of business, and to defend a point of view that you are assigned. 

To prepare for this Discussion, review and take critical reading notes on this week's required readings, media, and any relevant resources from your MBA Program Capstone Bibliography document. 

  • The sole purpose of business is to generate profit for shareholders, as Milton Friedman suggests. The primary responsibility of senior leaders of business is to ensure shareholders receive maximum returns.
  • The primary purpose of a business is to create and keep customers. Senior leadership's primary responsibility is to ensure that a company can achieve its strategic intent and win against competition over the long term.
  • The primary purpose of business is to solve people's problems. The primary responsibility of senior leaders is to create and maintain an environment of meaning and purpose so that the organization's people can create value for a broad range of stakeholders.

Post by Day 3, a well-written response to support the point of view that your Instructor assigned to you. 

Be sure to make as strong of an argument as you can to support your view, relying on the assigned and other resources you have chosen from the MBA Program Capstone Bibliography or program content, whether or not you agree with the point of view personally. This is like a mini-debate, so be nice and have fun! 

General Guidance: Your original post, due by Day 3, should be 3–4 paragraphs in length as a general expectation/estimate. Refer to the Week 1 Discussion 1 rubric for grading elements and criteria. Your Instructor will use the rubric to assess your work.

Solution

Title: What Are The Fundamental Purposes Of Business And The Responsibilities Of Strategic Leaders?
Length: 2 pages (900 Words)
Style: APA

Preview

The sole purpose of business is to generate profit for shareholders, as Milton Friedman suggests. The primary responsibility of senior leaders of business is to ensure shareholders receive maximum returns.

Milton Friedman was the twentieth century’s most well-known advocate of free markets. He played three roles in the intellectual life of the twentieth century. There was Friedman the economist’s economist, who writes technical, more apolitical analyses of consumer behavior and inflation. Friedman stated that the company has no ‘social Responsibility’ towards society or public as their only purpose of doing business is to increase profits for stakeholders and themselves.

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