How can we define Business?
Business is an important institution in the society. Be it for the supply of goods and services; creation of employment opportunities; offering better quality of life; contribution to the economic growth of a country; the role of business is crucial. Society cannot do without business. It needs no emphasis that business needs society as much.
The subject of business is as interesting as its role in society. The more one reads about it, more interesting does business become.
The increasing number of business schools and institutions signify the importance and the need for training the students on rudiments of business management.
The basic aim of a business activity is to make profits in a narrower sense. In a broader sense, it aims at the growth of a nation’s economy.
Developing countries encourage entrepreneurial activities and view it as a strategy to improve the GDP (Gross Domestic Product). More business activity means increased per capita income and increased standard of living.
A business must make profit to succeed. Profit is income minus outgo. It is the main incentive for starting a business. Business people weigh each of their decisions in terms of making profit and avoiding loss.
In a corporate environment, business has to aim for wealth maximization apart from profit maximization to increase the shareholder’s wealth in the long run.
The scope of business is indeed vast. It all depends on how well you have analyzed and understood the nuances of your business activity, in order to survive and sustain in the market.
The supply chain in a business activity involves numerous links in the form of manufacturers, supplier of raw materials to the manufacturer, dealers, logistics, intermediaries, consumers, bankers, advertising agencies, insurance agencies and so on.
All these elements have to function in a coordinated manner for the benefit of the consumer. Now days, business has become customer-centric rather than product-centric. This serves both the purpose of product development in lieu of customer needs and customer satisfaction.
The multitudinous activities involved in bringing raw materials to the factory and the end product from there to the market constitute business.
In addition, a business activity has to comply with legal restrictions and government regulations. A business is also expected to discharge its social obligations to consumers, employees, owners and to other interest groups, which have stakes in business directly or indirectly.
Planning and organization
Planning and organization are two key principles in running a business enterprise as planning sets up a concrete premise on which action plans can be developed and organized activities assures definite success. Modern business is dynamic.
Future business will be knowledge based and brainpower will be in greater demand. Organizations have become flat. Eight to twelve organizational layers have been reduced to two or three.
Gone are the days of sheltered markets, subsidies, licenses, quotas and restrictions. Businesspersons are asked to stand on their feet, to eliminate inefficiencies, cut down costs and improve productivity.
It might be said that it is the ideal of the employer to have production without employees and the ideal of the employee is to have income without work. –E. F. Schumacher