In any market economy, business plays a huge role. Business is the engine of an economy.

Business provides jobs that allow people to make money and goods and services that people can
buy with the money they make. Without business, the economy would be very inefficient and/or
very primitive. Economies can exist without businesses, but they are not nearly as strong. Business,
then, plays a central role in any market economy. It is the engine that allows an economy to run
because it provides jobs as well as goods and services. In this module, we are going to tackle the
basic functions and roles of business in society, as well as the sustainable roles businesses play due
to societal needs and expectations.

After successful completion of this module, you should be able to:

➢ Understand the different societal functions.
➢ Identify the roles that business plays in society.
➢ Learn about the UN’s Sustainable Development Goals.
➢ Identify different business functions.

Societal Functions
Organizations have evolved to perform several functions or tasks in society. Broadly speaking,
these are:
➢ The economic and production tasks. These include land maintenance and food production,
manufacture and distribution of goods and services, and all tasks associated with the
creation and maintenance of wealth. Farms, mines, manufacturers, distributors, retailers,
and the myriad of enterprises that make up the business and commercial world perform
these and the related economic roles.
➢ The maintenance tasks. These exist to hold society together, maintain its stability, and
ensure its continuation. Most activities that are involved with transmitting and shaping
knowledge and culture fall into this category. Education, religion, health and welfare
services, and some aspects of the media provide the clearest examples of the institutions
that undertake these roles.
➢ The adaptive functions. These provide how the society responds to change. Research,
creative activities, even the means for shaping and managing debate or

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 conflict undertake this. Universities (their research activities), research organizations, and
the arts are the clearest examples of this form of venture.
➢ The managerial or political tasks. Any society or community requires institutions and
systems to identify and implement policy for the group and related agencies to arbitrate
systems and assess conflicting demands or expectations. Society is likely to interact with
other communities; institutions are required to manage these relationships. Government,
political parties, the law, and the military perform these tasks.
A commercial enterprise is set up to make money. It will expect to confine its sales to those who
can pay. Its investors, specifically its shareholders, will expect to be the beneficiaries of any
surplus. These financial returns tend to be the main focus of management’s attention. Society,
however, has grown to expect many things from the corporate sector. These include core
obligations like wealth and job creation and peripheral responsibilities such as sponsorships and
community outreach.

Role of Business in Society

The basic role of business is to produce and distribute goods and services to satisfy a public need
or demand. However, business leaders are pressured more and more to redefine the role of business
in society by an increasingly skeptical public. The purpose of a corporation should no longer
advance only the interests of shareholders. Instead, business leaders must also invest in their
employees, protect the environment, deal fairly and ethically with their suppliers, and address
issues of poverty, hunger, lack in education and health issues in areas around their offices and
factories. To make sure that businesses are performing its role to the society, the United Nations
have developed the “Sustainable Development Goals” which serve as a blueprint to achieve a
better and more sustainable future for all. These goals are as follows:
Goals How you can help
Goal 1: No poverty Donate what you don’t use
Goal 2: Zero Hunger Waste less food and support local farmers
Goal 3: Good Health and Well-Being Vaccinate your family
Goal 4: Quality Education Help educate the children in your community
Goal 5: Gender Equality Empower women and girls and ensure their equal
rights
Goal 6: Clean water and sanitation Avoid wasting water
Goal 7: Affordable and clean energy Use only energy-efficient appliances and light bulbs
Goal 8: Decent Work and Economic Create job opportunities for the youth
Growth
Goal 9: Industry, Innovation, and Fund projects that provide basic infrastructure
Infrastructure
Goal 10: Reduced inequalities Support the marginalized and disadvantaged

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 Goal 11: Sustainable cities and Bike, walk, or use public transportation
communities
Goal 12: Responsible consumption and Recycle paper, plastic, glass and aluminum
production
Goal 13: Climate Action Act now to stop global warming
Goal 14: Life Below Water Avoid plastic bags to keep the oceans clean
Goal 15: Life on Land Plant a tree and help protect the environment
Goal 16: Peace, Injustice and Strong Stand up for human rights
Institutions
Goal 17: Partnerships Lobby your government to boost development
financing.

More and more entities recognize that their roles in society are not confined to doing business and
creating job opportunities. By adopting sustainability principles, entities can perform their role in
society without preventing them from achieving market success.

Business Functions
Aside from the basic and sustainable functions that it plays in society, businesses also have other
several functions. These major functions are discussed in the succeeding section.

Purchasing Production Distribution Accounting

Research &
Personnel Economic
Development

Purchasing Function
Materials required for the production of commodities should be procured on economic terms and
should be utilized efficiently to achieve maximum productivity. This function of the entity helps
support other businesses, thereby improving economic activity in general.
Production Function
Production function occupies the dominant position in business activities, and it is a continuous
process. Generally, production is the transformation of raw materials into finished goods. These raw
materials are classified as land, labor, capital, or natural resources.
Distribution Function
As goods produced are meant for sale, t he distribution function is an important business
activity. Distribution is the process of making a product or service available for the consumer or
business
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user who needs it. This can be done directly by the producer or service provider, or using indirect
channels with distributors or intermediaries.
Accounting Function
The purpose of the accounting function is to provide financial information to the stakeholders
of the business: management, investors, creditors, and/or the general public. Accounting
measures and summarizes the activities of the company and communicates the results to
management and other interested parties. By providing transparency through the accounting
function, entities can demonstrate their commitment to social responsibility.
Personnel Function
This refers to the planning, coordinating, and controlling of a network of organizations and
facilitating work about recruitment, selection, utilization, and development of human resources.
This is the business function that provides job opportunities to the community. In many ways
people are the most important factor in production, business is all about people, it uses human
skills and talents to produce an increasing number of goods and services.
Research and Development Function
Research and development (R&D) includes activities that companies undertake to innovate and
introduce new products and services. It is often the first stage in the development process. The
goal is typically to take new products and services that will improve the company’s performance
as well as satisfy the demands of consumers.
Economic Function
Small and large businesses drive economic stability and growth by providing valuable services,
products, and tax money that directly contribute to the health of the community. Taxes are used,
among other things, to maintain the infrastructure of a city, state, or country – roads, bridges,
tunnels, public transportation, libraries, and other public buildings and services, including police
officers and firefighters, all benefit from tax money collected from individuals and businesses.
These services are essential to the good health and positive qualities of local and national
citizens.