Understanding the purpose of a business may have everything to do with its success. What is the purpose of a business? Is it to make a profit? To serve customers? To produce a product? I would suggest that the purpose of a business should be to produce a product or service of the highest quality in the most efficient manner. When we do this we should make a profit, but the profit is the byproduct of the primary purpose of serving the customer.
An article in today’s national news about Toyota’s surpassing GM in auto sales probably says a lot about this issue. The spokesperson for Toyota had the following to say about achieving the milestone, “Our goal has never been to sell the most cars in the world," Paul Nolasco said. "We simply want to be the best in quality. After that, sales will take care of themselves."
With that attitude, Toyota has the key to success.
More than 20 years ago management expert William Ouchi in “Theory Z Management” pointed out that the Japanese were long-term thinkers and would surpass the US because they weren’t out after the short-term gain. Thinking long term and concentrating on quality and service will bring both sales and profits in the long run.
The highest purpose of an organization should be to serve the customer and do it in an efficient manner. That rule should be for non-profit organizations, governments, churches, and profit-making businesses. When that is accomplished society is best served and owners will profit.
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