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. The subject of business is as interesting as its role in society. The more one reads about it, more interesting does business become. To be successful, you have to have your heart in your business, and your business in your heart. – Thomas Watson Sr. Entrepreneurial activities The increasing number of business schools and institutions signify the importance and the need for training the students on rudiments of business management. 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. Supply Chain 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. LoL! 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....

Significance of Privatization Privatization that has gathered momentum since around the 1980’s has become the hallmark of the new wave of economic reforms sweeping across the world. It refers to the transfer of ownership or management of an enterprise from the hands of the public sector to private sector. It also means the withdrawal of the state from an industry or sector, partially or fully. Privatization marks a change from dogmatism to pragmatism and amounts to a reversal of policy. It is evident that the economic growth rate has multiplied ever since privatization has come into existence. What is Privatization? 1. The transfer of ownership of property or businesses from a government to a privately owned entity. 2. The transition from a publicly traded and owned company to a company which is privately owned and no longer trades publicly on a stock exchange. Performance of Public Sector: The performance of state owned enterprises in many countries have, by and large been far from satisfactory. This may be attributed to the prevalence of bureaucracy and red tapism in most of the public sector administration. They have often put large burdens on public budgets and external debt. Economic inefficiencies in the production activities with high costs of production, inability to innovate and costly delays in delivery of the goods produced are some of the shortcomings of the public sector. There is also ineffectiveness in the provision of goods and services such as failure to meet intended objectives, diversion of benefits to elite groups, and political interference in the management of enterprises. The relationship between the management and the labor unions is strained owing to the expansion of bureaucracy. Why Privatization? These problems have led many governments to undertake programmes of public sector reform. One Such reform is privatization of publicly managed activities to discard the inefficiencies and improve the economic growth rate. For privatization to succeed: Privatization cannot be sustained unless the political leadership is committed to and unless it reflects a shift in the preferences of the public arising out of dissatisfaction with the performance of other alternatives. Now-a-days, private sector enterprises have started dominating even core industries like petroleum, power and communication under the leadership of visionaries who may be the heads of the states or owners of such private organizations. Public services to be provided by the private sector must be specific or have a measurable outcome. Consumers should be able to link the benefits they receive from a service to the costs they pay for it. Since they will then shop more wisely for different services. Privately provided services should be less susceptible to fraud than government services if they are to be effective. Equity is an important consideration. Privatizing the state owned enterprises reduces corruption and the benefit goes to the society. The process encourages entrepreneurship and leads to intense development of capital market. Governments usually want to sell the least profitable enterprises, those that the private sector is not willing to buy at a price acceptable to the Government. The Government may even fear that if it gives a free rein to the private sector management, its power might be at stakes. All said and done most of the governments view privatization as an important strategy of economic...

The purpose of accounting is to provide the information that is needed for sound economic decision making. The main purpose of financial accounting is to prepare financial reports that provide information about a firm’s performance to external parties such as investors, creditors, and tax authorities.