The Main Purpose of Business

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There has been a steady rise in the popularity and significance of CSR and its role in creating an impact on society, and ultimately on the business itself, leading to its adoption and implementation by several corporate giants. Companies across various sectors have taken up social responsibility and their duties towards the society, as a serious and significant part of their corporate agenda (Nelson, 2004). It is evident from the fact that the annual report of companies’ now includes sustainability or social reports, where the social activities of a business are proudly displayed alongside the company’s financial reports. Companies today are highly aware of their role in society and the impact on the everyday lives of its consumers. However, as the role and popularity of CSR continue to rise, an equally significant number of companies, across Europe are steadily moving towards the adoption of the conventional Anglo-Saxon shareholder value model – with greater emphasis on profits, sidelining social responsibility in the process. It is on account of this very reason, that the debates surrounding the purpose and role of business in society, has assumed global significance (The Economist, 2005).According to some, the main purpose of business is to create wealth and maximize shareholder value, while others consider the benefit to society as a part of the business. However, regardless of the conflicting ideologies, the fact that business is arguable, the only human activity, which has a far-reaching impact on the society, cannot be denied. It has the ability to assemble and accumulate human resources, on a large scale, who are engaged in the production of goods and services for public consumption, while generating profits in the process.Business not only generates profits for the stakeholders and owners but also create value to the society in the form of employment and providing a source of livelihood to millions of people.