Essential Models for Internet Marketing Projects

Friday, May 25, 2007

What is a Business?

In his 1973 book, Management: Tasks, Responsibilities, Practices, Peter Drucker wrote:
To know what a business is we have to start with its purpose. Its purpose must lie outside of the business itself. In fact, it must be in society since business enterprise is an organ of society. There is only one valid definition of business purpose: to create a customer.

Because its purpose is to create a customer, the business enterprise has two—and only these two—basic functions: marketing and innovation. Marketing and innovation produce results all the rest are "costs." (61)

An organization that creates customers and innovates—this is a business. But then, what is our business?

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