Business lives on profit. Profit justifies the rationality of existence of a business. What primarily differentiates a business from other social institutions is profit. But how much a business will earn profit is a sort of strategic issue. Company’s vision, market demand, competition, company’s profit orientation, product life cycle, everything contributes here. Smart entrepreneurs fix the profit percentage after making a tradeoff among these factors.
Now, why and how is it so compulsory to earn a profit for a business? As business is a social institution, explanation of profit from a societal perspective can truly add a meaning. Business serves the society by providing an offering in the form of product or service. It’s a common or normative tendency of a society to motivate the activities and institutions that work for her betterment. For the sake of its survival society motivates those institutions and wants those institutions to get bigger, greater. For example, when a doctor serves the patients well, more patients come to him for treatments. Patients go for treatments with a rational purpose but naturally it works as a motivation for the doctor. Or think about Shakib Al Hasan, one of the best all-rounders in the cricket world. Why every Bangladeshi praises him when he gets a century or wins a match by taking five wickets? It is only because it glorifies every Bangladeshis. It exerts a feeling of conquest, a state that “We can do it”. We hail Shakib to get more centuries and in return we want to be glorified more and more. It’s completely a matter of mutual interest; a “Win Win Situation”. Similarly society agrees to give the business profit in return for the offering the business gives to her. The more valued service a business offer to the society the more profit it gets.
In this regard, Konosuki Matsushita , founder, Matsushita Electric Company based in Japan, says “ A business should quickly stand on its own based on the service it provides the society. Profits should not be reflection of corporate greed but a vote of confidence from the society that what is offered by the firm is valued. When a business fails to make profits it should die-it is a waste of resources to society. A firm should not adopt a paternal attitude toward its failing divisions and subsidize them.”The commentary of Matsushita is amazingly coherent with the Jews philosophy of business. They believe that if they work for the betterment of their generation god will make them wealthy in return.
In Bangladesh Capitalist values among the people, though in an immature state, are developing. To leverage the strength of capitalist way of life it must be closely linked with the sense of welfare to the society. Such interpretation of profit can meaningfully contribute to the development of capitalistic social system. More importantly, young entrepreneurs will get rid of as usual greedy attitude toward profit earning.