BA404 – Philosophy and Business

Module 2:
The Nature of Business

Reported by:
Kristine G. Contreras

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 What is a “Business”?
A business is defined as an organization or enterprising
entity engaged in commercial, industrial, or
professional activities. Businesses can be for-profit
entities or they can be non-profit organizations that
operate to fulfill a charitable mission or further a social
cause.

The term "business" also refers to the organized efforts

and activities of individuals to produce and sell goods
and services for profit.

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 Nature of business:

• An Economic Activity. It is an economic activity as

it is undertaken with the aim of earning money and
livelihood and not for psychological satisfaction.
• Profit Earning. The main purpose of business is
earning profit. If the profit motive is missing in a
transaction, then it cannot be considered as
business transaction.
• Uncertainty of risk. An important feature of
business is the presence of risk factor in the
transaction. There is always a possibility of losses.

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 Specific Concepts of Business

• A business concept is the foundational idea

behind a business. This is intended to
provide meaningful direction for the process
of developing a business plan and launching
a firm.

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 Business in a philosophical framework: The
Philosophical Triad of Business
Business has a place in philosophical framework as may
expressed in a philosophical triad of business which has 3
main components:
1. Philosophical imperatives - which provide the
foundation on which are laid all the established and
accepted principles and that gives business a mind;
2. Ethics - which tells what business ought to not to do
according to the set of standards and gives business a
conscience;
3. Social responsibility - which tells what else beyond
imperatives and ethics business can do and gives
business a heart.
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 Business and the Individual
• Often, we hear about mixing pleasure with business. While
putting a toe over the line between business and personal may
seem like fun sometimes, the reality is that it's actually a very
good idea to keep your business items separate from your
personal items.
• First Things First: Set Up a Separate Business
• Make the legal distinction, and you will be able to protect some
of your assets from business blunders that you might make.
• Keeping your business transactions separate from your personal
transactions becomes second nature. As long as you keep to the
dividing line between your business life and your personal life,
you will have a better chance of staying out of trouble with
lawsuits, and with the Internal Revenue Service (BIR).

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 Business and Society
• Business exists to serve society.
• When it comes to serving society, a
company’s first task is to ensure that its
core business is fundamentally value
creating—not just for shareholders but
also for customers, employees, suppliers,
communities, and the environment.

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How can companies define their unique
contribution to making society stronger?
1. Prioritize issues that are relevant to the
company mission
2. Draw on the company’s particular capabilities
3. Aim for a triple bottom line (profit, people and
planet)
4. Reshape the system for lasting improvement
5. Engage partners in transforming systems

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The Rationale for a Philosophical Inquiry

• Philosophical Inquiry is a peer-reviewed

academic journal that publishes articles,
reviews, and critical notes in all areas of
philosophy.
• Philosophical inquiry involves attempting
to answer the most fundamental questions
about a topic.

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 Sourcing Business Principles
Step 1. Articulate the Values
To create your guiding principles, you
must have already identified your top 5-7
core values.
These values are what you believe will
drive the behaviors needed to achieve the
outcomes of the business.

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Step 2. Identify the Irrational Rules,
Policies, Procedures
Work with your front-line team members
to identify the policies, rules, and
procedures in your workplace, which either
negatively impact morale or are unnecessary
obstacles, getting in the way of your product
or service being delivered to your customer
cheaper, quicker and of higher quality.

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Step 3. Develop the Guiding Principles

As you develop your guiding principles keep these

guidelines in mind:

- Your guiding principles spring from your Values

- Involve team members in developing the principles
- The principles need to be consistent with the Vision
- Be consistent with the experience the organization
wants to deliver to its customers
- Ensure the principle doesn't outline the exact "how to
do", but does emphasize what is essential to the business

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Step 4. Apply the Principles
Your principles and values must align behavior
and drive performance.

To make them real, leaders must:

• talk about them
• explain them
• defend them constantly, publicly, and
consistently
If they can't they should either change the
principles or leave the organization.
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 Principles of Business
(Sample)
1. Become a great leader.
2. Develop a successful business plan.
3. Offer a great product or service.
4. Surround yourself with great people.
5. Create a great marketing plan.
6. Generate great numbers.
7. Staff your company with great managers.
8.Create a great customer experience.

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 Dimensional Foundations of Business
When we look at businesses holistically, there are
four distinct dimensions that account for every
decision and action.

The four dimensions are:

Strategy, Operations, Marketing and Finances

Though they’re distinct dimensions, they’re

heavily interrelated. Your financial picture will
often guide your operational decisions, and your
operational decisions will often have to be
checked against your financial picture. Your
strategic initiatives will influence your marketing
decisions, and your marketing activities will often
reveal new strategic opportunities that you
wouldn’t have otherwise seen.

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Strategy and Development

• Who does your business serve? What are its core

competencies and how will you leverage them? What
are your business’s goals for the year? What is your
business’s vision and mission? What offers are you
going to develop this year? How are you going to
position, differentiate, and develop your brand?

• Questions like these all fall within the dimensions of

strategy. It serves as the foundation and hub for all of
the other dimensions, and having a weak strategy core
often causes many businesses to put the cart before the
horse.
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Operations
• How will we execute the plan? Who should
work on which project? Which of these
projects should we work on this week? Where
are we with our new infrastructure
migration? Is everyone trained to do the
critical tasks of our business?

• The dimension of operations is the realm of

execution and productivity. In short, it covers
getting stuff done.
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Marketing
• This particular dimension is the one that often
brings the quickest results in a business. Converting
bad promotional materials to much better ones
generally brings more customers and leads into a
business, thereby building enough financial margin
that a business can make other choices.
• A successful promotion of current products and
services can happen in days, whereas returning to
strategy, research, and development might take
months, and the revenue that comes in in the short
term can solve this problem nicely.

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Finances
• How much revenue did you make last month? Of
that, how much was profit? What are your
overheads? How much do you need to make in the
next quarter to increase your revenue by 10%? How
much of your revenue do you need to save for
taxes?
• The more grounded you get in your financial
reality, the more clarity you have about what your
business has done and can do.
• A challenge with this particular dimension is
understanding what level of granularity you need
for effective decision-making.
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Business Notion from the Philosophers

Socrates: Dare to Disagree

Socrates, one of the first philosophers,
insisted on our right to think for ourselves. Too
often, he warned, humans sleepwalk through
life, simply going along with the crowd.
Aristotle: let people seek fulfillment
Businesses and organizations need to build
the best systems to let humans fulfill their
natural drives.
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Plutarch: Be a good role model
Set a good example and they will follow
it. Plutarch said that your best young
employees will use you as a bar to aim for
and exceed and that’s natural. Let them
compete with you and encourage them to
go further.
Epictetus: build a resilient mind-set
Focus on what you can control, and you
will feel a measure of autonomy even in
chaotic situations.
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Rufus: keep track of your ethical progress
If you want to be an ethical individual or
an ethical company, you can't just study
ethics, you have to practice it, every day, to
get into good habits.

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 References
• https://www.investopedia.com/terms/b/business.asp
• https://simplicable.com/new/business-concept#:~:text=A%20business%20concept
%20is%20the%20foundational%20idea%20behind,a%20business%20concept
%20to%20fully%20describe%20the%20business.
• https://www.mckinsey.com/business-functions/strategy-and-corporate-
finance/our-insights/business-and-society-in-the-coming-decades
• https://www.coursehero.com/file/20758320/nature-of-business/
• https://www.productiveflourishing.com/the-four-key-dimensions-of-
business/#:~:text=There%20are%20four%20key%20dimensions%20of%20every
%20business:,a%20grip%20on%20these%20to%20run%20your%20business.
• https://investorjunkie.com/entrepreneurship/business-personal-separate/?
fbclid=IwAR0A7VdCqolnEsr9jX0ux6VgLFJj2mnzXR863h6mWEgZs_jXAFtxlLRdHAc
• https://www.thinkadvisor.com/2013/05/09/10-principles-of-business-success/?
fbclid=IwAR1Qc57daoAYJhhkSI-4JC6rGrtd0uQZ9701mWIVFAiwJrg-vqqi8QqvLi0
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Thank you again for listening!

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