Toyotas Social Initiatives Case Study Example | Topics and Well Written Essays - 2750 words

Toyotas Social Initiatives - Case Study Example This essay declares that one of the most important questions that the rise of the modern business corporation has triggered in the minds of men is the following: â€Å"What is the purpose of a business?† Like the human beings that founded, managed, and grew them, corporations have searched for answers to this basic question on the assumption that doing so would give meaning to their existence, their behavior, and the countless short- and long-term business decisions made each day. This paper stresses that the search for an answer is not easy. Why and how does a business begin? Usually, some brave soul discovers a need in society that can be met, a product or a service that can be sold either because no one else is selling it or because s/he thinks it can be improved, made more convenient, or sold at a cheaper price. In the process, the person who discovers this unmet need and can supply it to people who are willing to pay the right price becomes rich. The business grows, expands, competes, and then goes public by listing in the stock market†¦and then what? This is where having a business purpose comes in handy, because making money is the easy part (although most start-up businesses fail, not only in America but in any other part of the world). These successful businesses go beyond finding ways to be profitable and try to discover how to spend those profits. the company’s business goals can be profitable if properly managed.... The business grows, expands, competes, and then goes public by listing in the stock marketand then what This is where having a business purpose comes in handy, because making money is the easy part (although most start-up businesses fail, not only in America but in any other part of the world). These successful businesses go beyond finding ways to be profitable and try to discover how to spend those profits. At first, companies were happy to share those profits with their managers, employees, and shareholders, but over the years, everyone realized that there were limits to the amount of money one could spend. In their search for a purpose, they came up with several answers. Adam Smith, in his Wealth of Nations, Book III entitled "Of the Natural Progress of Opulence" (Bartleby 2001) entreated private businesses to go beyond profits and create surpluses for export because this would lead to progressive wealth resulting in the improvement of the standard of living and the cultivation of society, a sort of heaven on earth where everyone would be happy. Drucker (1955) argued that the creation of value is the purpose of the organization, and that the purpose of business is to create and keep a customer. Friedman (1962) also emphasized that the social responsibility of business is to increase profits and maximize shareholder return without breaking the law, and that it is not the purpose of business to take care of society. Two prominent thinkers disagreed. Freeman (1984), the pioneer of stakeholder theory, defined (p. 48) stakeholders as "groups and individuals who can affect the organisation" and that "managerial behaviour must respond to those groups and individuals." Freeman argued that a business must go