The Bottom line of Business

Over the time again and again philosophers have dwelt into the question , what’s the purpose of business and answers have varied to cover almost every dimension from economic growth to value creation for its stakeholder and beyond. The greatest management guru of current time Peter Drucker mentions

“Business exists to supply goods and services to customers, rather than to supply jobs to workers and managers, or even dividends to stockholders. Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity” – Peter Drucker

As per Drucker business identifies the need of the value creation for a particular segment of people and creates that value, if your business is making profit that just validates your creation of value for your customer. So there is something larger which is purpose of business , profit creation may not just be validity test ( as Drucker mentions ) but definitely be an integral part of it however there are other people like John Renesch who have put a very strong support for greater purpose of business

"Corporations are human-made organisms, associations of human beings. To see this association as having one solitary purpose and responsibility, to grow only in economic terms, is such an extreme view that implosions like what happened to Enron, WorldCom and other corporate collapses will become more and more commonplace." -- John Renesch

John has hit the profit creation part of business too hard, taking specific examples like Enron and Worldcom. Same sentiments are shared by James C Collins in his book “Built to last” mentioning that maximizing profit has not been the dominating force or primary objective of visionary companies, yes they seek profit but they are equally guided by core ideology – core values and sense of purpose beyond just making money. Even though we can never undermine the bottom lines for any business yet we have sufficient reason to believe that this can never be an ultimate goal of business. If we go back and find out reasons of starting of several organization we would come across passion for technology, innovation, identification of improvement and value creation, making things better and faster as some of the key reasons which may include something as personal as working for self of being once own master.

Anu Agha of Thermax sums it well "We survive by breathing but we can't say we live to breathe. Likewise, making money is very important for a business to survive, but money alone cannot be the reason for business to exist".
Whatever is the objective of business, profits can not be negated but why do we need profit? If a firm wants to sell some product why can not it provide just by covering its operational and capital expense without taking any extra profit, this much should be enough for sustaining any organization but will that be enough for growth as well? Can it enable value creation and innovation?