The real essence of business: Create value for your owners

This papers talks about the mission of business in today's society in the current political and economic system and the mission of any business is to create value for its owners. The reason companies management focuses so strongly on creating economic value as opposed to producing something or serving customers is for a few reasons.

First, increasing share owner value over time is the job our economic system demands of management. Creating value is a core principle on which our economic system is based, it is the job we owe to those who have entrusted us with their assets. Secondly by increasing share owner value we are able to contribute to society in meaningful ways. Helping the economy flourish by doing simple things such as going out to eat more often or to simplify, putting more money in to the economy creating a trickle down effect to all types of families around the globe. My last point is that it keeps management from acting short sighted.

We live in a democratic capitalist society. People create specific institutions to help meet specific needs. Governments are created to help meet civic needs and companies are created to meet economic needs. One role of the government is to provide the necessary climate for business to carry out its function. While performing its role, business distributes the lifeblood that flows through our economic system, not only in the form of goods and services, but also in the form of taxes and salaries. Society benefits from commerce and companies benefit from a healthy society. We benefit from educated employees, from a high quality of life in our cities and from all the services for which the government is the preferred provider, but business is the main driver of economic growth.

Goizueta, Roberto C. (1997). The real essence of business: Create value for your owners. Vital Speeches of the Day; Chicago