Carroll (2009) defines business as an organization that sells goods, services or both with an objective of profit maximization. Businesses play a crucial role in the modern society as they recognize the mutual need to enhance and preserve the physical, political, social, economic, and cultural infrastructures that underpin a flourishing society. Businesses provide services to human beings, and this highlights their importance. Some of the services that businesses provide to society are discussed below:
Businesses provide goods and services to society. They produce a variety of products that are supplied to the society. They add value to raw material, reprocess finished products and add preservatives. This enhances creation and promotion of new utility (Carroll, 2009). They also provide supplementary and complementary goods and services to the society enhancing consumption and product usage.
Businesses play a crucial part in increasing societal income levels. In profit generation, such factors of production as labor, capital, and land. This generates income to the society from the rent collected, wages, interest and profits to the owners of these factors of production (Erickson, 2009). The profits generated from businesses add to the national income, which contributes to societal development. Profitable businesses on either sole proprietorship or corporate levels provide to the national income from payment of taxes. Carroll (2009) provides that the government uses this income for development projects such as improvement in infrastructure, which boosts societal growth and development.
Businesses provide for research and development, which boost the innovations and inventions in a society (Erickson, 2009). In the quest to be ahead of competition, businesses continuously conduct research on product development and alternative uses of resources. This adds to innovation and development of new consumable products that increase consumers’ varieties. Research and development assists in development and addition of value and quality of existing products (Carroll, 2009). This improves on societal consumption base. Additionally, businesses contribute to education, science and technology development. They provide facilities for innovation of new technologies and apply theories of science, which provide for human welfare and better production.
Businesses provide employment not only to the business owners but also to a significant number of individuals who are employed in the production, distribution, and provision of other services. This assists in poverty and crime alienation in a society. It also promotes the development of knowledge and skills to the society members who can use such in developing their individual businesses (Carroll, 2009). This improves societal income generating capacities and hence development.
Businesses harness capital and other resources of production provided by other businesses in the society (Erickson, 2009). For instance, businesses borrow loans from local financial institutions and pay such loans together with interests. This harnesses capital growth, utilization of natural resources, which could otherwise be put to waste, and boosts utility creation. Consequently, the increase in the capital base boosts production, resource utilization, and employment.
Businesses also take part in corporate social responsibilities such as environmental conservation (Erickson, 2009). They create new utility by value addition without which a lot of natural resources would have been put into waste. Additionally, they take part in societal developmental agendas such as contributions to social facility developments, civic education, and waste management, among others. This enhances social welfare and boosts interrelatedness between businesses and society.
Conclusively, the role played by businesses in societal development cannot be ignored if service to human beings is anything to go by. Businesses are the pillars of societal development and play a crucial role in the provision of wealth, profits, knowledge, skills, technology, among others.
Carroll, A. B. (2009). Business & society: Ethics & stakeholder management. Mason, OH: South-Western Cengage Learning.
Erickson, M. (2009). Business in society: People, work and organizations. Cambridge: Polity.