ABSTRACT
The prevailing economic theory of the mission of business enterprise and behavior, the maximization of profit—which is simply a complicated way of phrasing the old saw of buying cheap and selling dear—may adequately explain how Richard Sears operated. Profit and profitability are, however, crucial—for society even more than for the individual business. The profit motive and its offspring maximization of profits are just as irrelevant to the function of a business, the purpose of a business, and the job of managing a business. To know what a business is, we have to start with its purpose. Its purpose must lie outside of the business itself. Because its purpose is to create a customer, the business enterprise has two—and only these two—basic functions: marketing and innovation. That business purpose and business mission are so rarely given adequate thought is perhaps the single most important cause of business frustration and business failure.
