BUSINESS Business denotes busi-ness, that is the state of being busy any activity in which one keeps himself

f busy. But the economic term of business refers to work, efforts, and acts of people or human busy in connection with the production of wealth. Business is the sum of total activities which are connected with the production or purchase and sale of goods and services with the main objective to earn profit.

1.0 Definitions of Business According to Urwick and Hunt, Business is any enterprise which makes, distributes or provides any service which other members of the community need and are willing to pay for it. Davis defines business as Business may be defined as an activity in which different persons exchange something of value whether goods or services for mutual gain or profit.

2.0 Nature of Business Man always wants and wants more. In fact he is a wanting being having insatiable innumerous wants. For satisfying his wants he works and works harder so as to make use of scarce resources available. Making use of scarce resources to the best advantage for the satisfaction of human wants is termed as economic activity. Economic activities, thus deal with the activities of living and making a living. For this purpose everyone of use follow an occupation according to our inkling, capacity, knowledge and training. One therefore, may either follow a profession (rendering specialized expert and personal service), or seek employment (under taking to work for others according to terms and conditions set for the purpose), or set up a business engaging in production of wealth.

3.0 Characteristics of Business Business is an economic activity having some feature and characteristics. Following are some important characteristics of Business :

i. Production or Acquisition of Goods Every business whether small or large scale deals with goods and services. The goods may produce, manufacture or procure. Business is either to produce, manufacture or procure and then to supply for a price to those who are in need of the goods so produced, manufactured or procured.

ii. Profit The basic motive of business Profit is an essential part of business, infact profit is the motivation factor behind a business one carries on. Profit is stimulus and a guarantee to continue the business. Profit is the factor which ensures the survival of the business. Profit is the reward of all those individuals engaged in a particular business. The efficiency of a businessman depends on the profit which he is able to make during the business operation. He renders singular service to the continuity by satisfying the needs of the people. He expected a reward for such a service rendered and if he gets the double and redoubles his efforts and plans his future in such manner so as to render best possible service to the community.

iii. Risk Uncertainty of future Every business involves risk and uncertainty while carrying on its operations. Future is uncertain and business activity focuses on future. This focus on future and uncertainty of future naturally entails risk. It is risk which every businessman takes when he embarks upon a business activity.

iv. Dealing in Goods and Services Business refers to goods and services dealt with a view to supply to those who need them and are ready to make payment for the same. Dealing in goods and services is business. The goods may either be consumers goods (Cloth, books, electronics appliances, medicine etc) or Producer goods (machinery, tools etc) or services (courier or transport services etc).

v. Regular Dealings One of important characteristics of business is regularity and recurrences. Business is not a single operation. A single operation would never constitute a business. It should a regular and continuous entity. Recurrence of dealing is a must to constitute a business. On selling furniture of his household with a view to replace it with new one is not business. But if the same person procures a variety of furniture, keeps the stock and sells them to the consumers, he carries on a business dealing in furniture.

4.0 Objective Objectives of business refer to purpose for which business is established. Generally objective of business is to make profit and avoid loss. No doubt profit is driving force in undertaking any

business activity but not the only objective of business. Urwick says earning of profit cannot be the objective of a business any more than eating is the objective of living

Following are the main objectives of business : i. Economic Objectives of Business ii. Social Objectives of Business iii. Human Objectives of Business iv. National Objectives of Business

4.1 Economics Objectives of Business Business is an enterprise which makes, distributes or provides any goods or services to the community and as a result earns profit. These two major activities constitute economic objectives of a business, these are divided into the following points.

4.1.1 Normal Satisfactory Profit It is a common belief that money chasing is the only objective of a business. True maximization is the common prevailing norm among the whole business community. To run the business successfully it is necessary to earn profit.

4.1.2 Creation of Customers Customers are the ultimate source of happiness to a business. Customers are the source of revenue and profit. If they continue to come, do not alter the patronage, are satisfied with goods, services, business dealings and behavior. They usually stick to the business and tell their

relatives and friends about the business they have good relations. It is a chain reaction. Infact a satisfied customer is an asset who always is expected to bring more and more customers. More customers mean a good turnover and a good turnover means a fair amount of profit to the business. Creation of new customers is the ultimate objective of any business and there is no substitute. This can be better done by educative and repetitive advertisement and by satisfying the customers who are patronizing so that they may stick and ask other to follow them.

4.1.3 Innovation Innovation is again an important objective of a business. In this, complex and competitive industrial and commercial world everyone tries to woo the customer. It will help the business to attract more customers if it tries to innovate in its field of activities. Innovation of goods and services customers policies, production quality, service facility etc. all need innovation. Business activities are essentially measured in terms of money, all measurements must show profit. Money flowing in and profit are the two measuring rods of the success of a business, but at best these two can only be called a motivating force for the enterpriser.

4.2 Social Objectives of Business 4.2.1 Supply of Quality Goods and Fair Prices The community pays for goods and services the business offers to it. In turn the community expects that the business will adhere to the standard. Of quality which is necessary to satisfy its wants and business will also ensure that whatever is being made available to the community is being made available at competitive and fair price. A consumer surplus to the buyer and normal satisfactory profit to the business go side by side and both are complementary. In fact this sis

norm of a business unless this is not ensured the survival and development of the business may not assure in this complex business world.

4.2.2 Fair Deal to Workers Wherever they are working for living the workers should be motivated to work for the organization so as to make the organization forehead amidst fierce when the business is able to attract best talent towards its organization. It is because of this business has to meet the needs of workers and make them a satisfied lot. A fair deal to workers helps the business in this direction.

4.2.3 Fair Return to Investors Profit to investors must be ensured which should be fair one according to the prevailing market conditions. This is an important objective. Investors provide working capital as well as fixed capital to the business. Business therefore, must aim to allow them a fair amount of return so that their interest must remain in the business.

4.2.4 Fair Deal to Suppliers Supplier supply the raw materials with the help of which goods are manufactured. Supplier supply all other components and accessories to the manufacturing organization, which in turn ensures smooth and timely production. Similarly suppliers supply the goods to a commercial venture for onward supply to the ultimate consumers. Whatever may be the type of business the suppliers form the basis of the entire business community. They expect a fair deal, that is, payment in time, regular placement of orders, ethical business dealing sand continuity. Thus the business has to ensure in its own interest as the supplier is the basic link between the business

and community. They too are to be kept satisfied particularly at a time when there is a paucity of qualitative supply of goods whether industrial or commercial.

5.0 Henry Ford Philosophy of Business & Social Responsibility Once Henry Ford said the best way to make money is not to think too much about making it, in the light of the observation raised by Henry Ford discuss the changing philosophy of business.

5.1 Changing Philosophy of Business There was a time when business was expected to devote whole heartedly to producing and distributing goods and services and to make innovations and to improving products with an ultimate aim of maximization of profits. But today the business is increasingly called upon to promote a variety of social purposes (social responsibility) in addition to what it was called upon to do in good old days. New rules have been assigned to business which it is asked to play in the social system today. The business is no longer expected to ignore public interest and thereby evade its social responsibilities. Its business is not only to do just the business. No doubt money chasing is still the economic objective of the business. Maximization of profits still continues to be the business norm. In Henry Ford philosophy of business cheating should have been given a goodbye signal. Adulteration must have been the word of past. False advertisement, misleading information, products non-conforming to the quality indicated therein should have been the story of yesterday. Though all these are still there and it seems that in India and Pakistan the business prosper only with all these and these are the only recognized means of maximizing profits. However, these should have not been the story in a country which claims to be striving hard for the establishment

of a welfare state. Our business and businessman should take a leaf out of what Henry Ford observed in his biography. He said The best way to make money is not to think too much about making it. Organize your business to do as much good as you could do for everybody. More and more goods for more and more people at lower and lower prices.

5.2 Henry Ford Social Responsibility of Business Henry Ford, in the observations quoted above emphasized the social responsibility of business and through his sayings he emphasized the philosophy of business lies in serving the society instead of serving own-self. He was of the view that by serving the society the business really serves itself. But the philosophy of the business has to undergo a change. Maximization of social responsibility of business should be the main objective, which though indirectly, will bring prosperity to the business. For human betterment, for service and for self-improvement this social responsibility the business has to shoulder.

5.3 Business and Society In fact the very existence of the business depends upon the society. A better well of and improved society an insurance which guarantees a prosperous and well developed business world. Thus self-interest and public good go parallel. They cannot be kept apart. In fact they are inextricably interwoven. The social mingled that they cannot be separated even if one thinks of separating them and tries his best to do so.

6.0 Essentials of Successful Business A successful business requires in order to fulfill its obligations to itself, stakeholders and society. A business is required to render worthwhile service to the consuming public. Thus the business can do by making a quality product at a lowest possible cost ensuring reasonable profit and by ensuring reasonable profit and by ensuring consistent and continuous supply. Following are the essentials of successful business

6.1 Defining business objectives 6.2 A sound organization 6.3 Planned working 6.4 Pure research 6.5 Applied research 6.6 Industrial research 6.7 Proper location and size 6.8 Effective business management 6.9 Sufficient funds availability

6.1 Defining Business Objectives The very first essential of successful business is the definition of business objectives. Objectives must be clear and clearly defined which help the business to run smoothly and effectively. In order the ensure success it is utmost important that both the short run and long run business objective are clearly demarcated and defined.

6.2 Sound Organization A well-defined, a well-knit and thoroughly sound organization goes a long way in assuring success to the business. An organization manned by competent people naturally ensures to success. An organization which is able to clearly define the duties, rights and responsibilities of all those who are manning it does a great service to the business which is striving hard to succeed in this complex world of industry and commerce.

6.3 Planned Working Planning pave the way the lead to success, planning refers to the analysis of a problem, evolving and evaluating alternatives, making a good choice, finding solutions, evolving strategies. Fixing targets and outlining the steps necessary to be taken in order to the objectives defined and being tried to achieve. Planning also refers to looking forward. It enables business to meet any contingency. There is a need, therefore, to have planned operations of the business. This avoids failures and assures success to a large extent.

6.4 Pure Research Pure research is conducted with a sole purpose to probe the unknown. It is an investigation in the quest of knowledge in the field of basic science pure research is possible.

6.5 Applied Business Research Applied business research is conducted for immediate practical and commercial purposes. Though it has often been said that applied research is the result of pure research, which is usually followed by such as applied research in order to make it fruitful and applicable to the benefits of

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mankind. Though no clear demarcation line can be drawn between the two it may be said that the economics and commerce is concerned with the applied research. It is because applied research is concerned with a particular problem, studies the said problem, and offers solution for the benefit of the organization which has carried out the research.

6.6 Industrial Research Applied research conducted in industries is designated as industrial research. It is generally related to marketing sales and purchase, materials, product and equipment etc. besides these research related to industrial relations, industrial psychology are few other types of research which is conducted and goes a long way in assuring the success in industrial sector of the economy.

6.7 Proper Location and Size A good location and size contributes a lot to the success of trade, commerce and industry. This naturally can be decided with the help of defining business objectives

6.8 Effective Business Management Above all it is the management which makes fruitful use of all the resources which the business has at its command. Men, materials and machines are to be organized and managed efficiently and effectively. Effective business management therefore, plays a very vital role in successful business.

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6.9 Sufficient Funds Availability Last but not the least another essential of successful business is sufficient funds availability. For any business finance is like a life blood. Adequate flow of fund at a time when they are needed is most important factor. There are different activities which requires to have sufficient funds, such activities may be commencement of new projects, installation of new plants. In all business undertakings in the private sector, the main motive is to earn profit. Profit is the driving force before and after entering into the business field. Infact profit is the oil which drives the wheels of business. Profit is the total revenue from sales minus the total cost of resources employed by the entrepreneur.

7.0 Role of Profit in Business The role of profit in business can be judged from the following points.

7.1 Sources of Income Investors invest their money in the business with the sole purpose of earning profit, since profit is a source of income, it therefore provides the owners of business the mean with which they and their family members can live a comfortable life.

7.2 Continuity of Business The incentive of earning profit keeps the man engaged in business activities. A business can only grow and gain strength if it earns profit. So earning of profit is necessary for the continuity of business.

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7.3 Expansion of Business One of the role of profit in business is that businessman retains and reinvests a part of its profits in business undertaking stands on sound footing. It can expand and diversify business not only from reinvestment of funds but also getting loans from external sources for business.

7.4 Reward of Risk Bearing Profit is the reward for bringing new products or processes to the market. It is a reward for a risk successfully undertaken. Profit, therefore, is a reward for the future which is uncertain.

7.5 Profit and Economic Development Profit and economic development are closely related with each other. If the firms are not earning profit then there is no economic progress in the country. If there is no economic development there is no profit to the business.

7.6 Profit Acts as Measure of Efficiency

Profit acts as an index of performance for business, if the business firms are earning profits. It shows

that the country is progressing satisfactorily

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8.0 Causes of Business Risk The main causes of business risk are as under:

8.1 Natural Factors There are certain nature factors like floods, earthquake etc. which can damage the business. For human beings nature is uncontrollable, so any loss due to nature calamities is unavoidable and uncontrollable.

8.2 Competition When business have strong competitors in the market and the manufactures indulge in cut throat competition by cutting down price of the goods or by producing cheaper quality of the product, which is a great hazard for business.

8.3 Change in demand for the product If there is a sudden change in demand for a certain product can create a business risk. For instance, when Samsung introduce S III mobile it certainly affected the market for Apple in many country.

8.4 Use of Modern Technology If a company is financially sound can install heavy machinery and use modern techniques of production. By doing this per unit cost of production of goods decreases, for small business units it is not possible to do so. It is lead to suffer their business.

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8.5 Human Causes of Business Risk Business loss may also occur due to theft, forgery, lavish expenditure and top heavy management.

8.6 Change in Government Policies Government policies are unavoidable for business. If a sudden change comes in monetary and fiscal policies of government which is not favorable for business will lead to business loss.

8.7 Mismanagement Sometimes management is not capable to run the business which in the important cause of business risk. Due to improper planning or what they planned cannot attain the planned objectives which increased the risk. All these can lead bad cash flow, increase in per unit cost.

9.0 References

9.1 http://en.wikipedia.org/wiki/Business 9.2 http://kalyan-city.blogspot.com/2011/03/what-is-business-meaning-definitions.html

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