Issue link: https://www.e-digitaleditions.com/i/161013
your turn by Robert Kemp The True Purpose of Business? Value In education, nothing influences students' success in a field of study more than their experience in its introductory course. If an introductory course fails to adequately prepare them, not only will they be unable to apply their new knowledge to the real world, but they won't possess the understanding they need to proceed to advanced material. As we well know, trying to correct these deficiencies later on can be painful for both students and faculty. Thus I feel that it's particularly important that we do an excellent job with the very first course our business students take—the big-picture course that introduces them to the field of business. Here's where we set the foundation for every subdiscipline that follows. And here is where we all too often go wrong. It seems to me that most introductory business courses fail for one of three reasons: They're too focused on accounting, they're too focused on profits, or they're not focused at all. Let's look at the problems with each approach and nail down potential solutions. Focusing on accounting. It's often said, "Accounting is the language of business. To understand business, you must speak the language." Accounting professors are experts in the methodology of recognizing, measuring, recording, and reporting business transactions—all important and necessary functions. However, students are often frustrated with accounting when they do not understand the nature, logic, or purpose of the transactions. For an analogy, imagine taking students to a field full of chickens, sheep, cows, and horses. You tell them that, to be successful, they must find each cow, record the total number of cows, and prepare a follow-up report on their findings. The students have been trained to complete all these tasks, but before they begin, one raises her hand and asks, "What is a cow? And why are cows important?" The lesson is simple. Students become confused and demotivated when asked to account for transactions for which they do not understand the nature or purpose. Students may become very good at totaling up debits and credits, but they won't be good at business until they understand why the transactions are important. Focusing on profits. Another frequent declaration is that "The purpose of business is to make profits." Unfortunately, the statement is both misleading and untrue. It leads to introductory business courses that concentrate on the wrong things—and turn out graduates who make catastrophic decisions in the real world. Students need to learn that the true purpose of a business is to create value, whether they're running a forprofit or a not-for-profit entity. To fully understand how business works, students must learn that value creation stems from balancing the benefits of ownership with the investment of risk and time. They must understand that competitive businesses create value not just for owners, but for all stakeholders—customers, employees, and society. Failing to focus. The introductory courses that don't focus on accounting or profit-making are often no better, because they tend to be inadequately structured, overly simplistic, and too devoted to marketing and human resources. While these topics are important, they shouldn't take up so much time that students don't learn about critical areas such as law, finance, globalization, information technology, operations, and economics. Once again, courses that don't appropriately contextualize basic business knowledge leave students confused and unprepared. Competitive businesses create value for all stakeholders—owners, customers, employees, and society. 62 September/October 2013 BizEd The Solution By contrast, a successful introductory course should cover a wide range of topics that help students