Saturday, March 26, 2016

On the True Purpose of Business

There are so many reasons that people go into business for themselves. Once successful, they can be driven by the principle of profit maximization or the Law of Consecration. 

Just because the world doesn’t factor in the power of God into business, doesn’t mean it doesn’t matter.” 
--Elder Gay

If we follow the Law of Consecration we can use of our means to succor the needy and poor in spirit and truly make a difference in the world. “Business is about service and about rescue.” (Gay)

Instead of grumbling about how a pharmaceutical company makes filthy money by charging unreasonable prices, why don’t we create our own companies and sell good quality medicine at profit-free prices or at prices with low profits? I think social-consciousness-driven entrepreneurs can be an effective force in the marketplace.”
 – Muhammad Yunus

Virtue and integrity in business are critical as shown through what the lack of it can do to companies, people, and nations. Think Enron, think the banking crisis, and think auto company bail out. Charles Handy in his HBR article What’s a Business For?, tells us that “Proforma earnings announcements by the top 100 NASDAQ companies in the first nine months of 2001 overstated actual audited profits by $100 billion,” and that “CEO’s in America earn more than 400 times the wages of their lowest-paid workers.” (Handy)

This lack of virtue and integrity is driving companies to profit on the backs of their workers and defrauding employees, clients, and the nation out of their life-saving and trust.

Handy goes on to tell us “the real purpose of a business . . . is not to make a profit, full stop. It is to make a profit so that the business can do something more or better. That “something” becomes the real justification for the business.”

Companies like Google and Microsoft have created foundations to help fight poverty and disease. This is the “something” that business is all about.

If CEO’s were to be rewarded with a share of the profit instead of stock options, they may be more interested in the truth of their numbers. Another solution to the problem is if companies would “measure success in terms of outcomes for others as well as for ourselves” (Handy).

It is my hope that I can choose the path of the law of consecration. Use my work in business to benefit others.

Entrepreneurship and ConsecrationElder Gay
Microlending: Toward a Poverty-Free World, Muhammad Yunus
What’s a Business For?, Charles Handy, Harvard Business Review

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These are my opinion, viewpoints, and beliefs. If you do not agree, please be kind. If you cannot be kind, please do not comment.