BUSINESS ORGANIZATION

INTRODUCTION TO BUSINESS
A business (also known as enterprise or firm) is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, in which most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning.

The philosophy of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope the singular usage to mean a particular organization; the generalized usage to refer to a particular market sector, "the music business" and compound forms such as agribusiness; and the broadest meaning, which encompasses all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings.

Basic forms of ownership

Sole proprietorship: A sole proprietorship is a for-profit business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has unlimited liability for the debts incurred by the business. Partnership: A partnership is a for-profit business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three typical classifications of partnerships are general partnerships, limited partnerships, and limited liability partnerships. Corporation: A corporation is a limited liability business that has a separate legal personality from its members. Corporations can be either government-owned or privatelyowned, and privately-owned corporations can organize either for-profit or not-for-profit. A for-profit corporation is owned by shareholders who elect a board of directors to direct the corporation and hire its managerial staff. A for-profit corporation can be either privately held or publicly held. Cooperative: Often referred to as a "co-op", a cooperative is a limited liability business that can organize for-profit or not-for-profit. A cooperative differs from a for-profit corporation in that it has members, as opposed to shareholders, who share decisionmaking authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.

Classifications of Business
Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals. Financial businesses include banks and other companies that generate profit through investment and management of capital. Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies. Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers. Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings. Retailers and distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalog companies are distributors or retailers.

 Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses, or consumers. Organizations ranging from house decorators to consulting firms, restaurants, and even entertainers are types of service businesses. Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs. Utilities produce public services such as electricity or sewage treatment, usually under a government charter. There are many other divisions and subdivisions of businesses. The authoritative list of business types for North America is generally considered to be the North American Industry Classification System, or NAICS. The equivalent European Union list is the Statistical Classification of Economic Activities in the European Community (NACE).Mill

Management
The efficient and effective operation of a business, and study of this subject, is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, operations management, service management and information technology management. Owners engage in business administration either directly or indirectly through the employment of managers. Owner managers, or hired managers administer to three component resources that constitute the business' value or worth: financial resources, capital or tangible resources, and human resources. These resources are administered to in at least five functional areas: legal contracting, manufacturing or service production, marketing, accounting, financing, and human resourcing.

CHARACTERISTICS OF BUSINESS
Creation of utilities: Business denotes creation of utility and service for satisfaction of human wants. Business helps in the creation, distribution and production of utilities. Recurring activities: Business activities are recurring in nature. Recurring purchase and sales are regarded as identifying marks of the business. Transfer of title: The goods produced or purchased by the business are made with the intention of sale or transfer of title from the seller to the buyer. Because of this reason goods acquired for the sake of personal consumption are excluded from business. Mutual benefit: Business activities are not sided affairs because both the parties are benefited. The buyer gets the benefit of having the goods and the seller gets the benefit of having money. Expectation of earning: Business provides a way of living to the businessman because he intends to earn profit.

 Profit motive Enterprise Risk and uncertainties Legality Satisfaction of needs (self and social) Based upon economic activities

Business Functions
Human Resources Sales and Marketing Research and Development Production/Operations Customer Service Finance and Accounts Administration and IT

Human Resources
Recruitment and retention Job descriptions Person Specifications Dismissal Redundancy Motivation Professional development and training Health and safety and conditions at work Liaison with trade unions

Sales and Marketing

Market research Promotion strategies Pricing strategies Sales strategies The sales team Product advice on new product development, product improvement, extension strategies, target markets

Research and Development

New product development Product improvements Competitive advantage Value added Product testing Efficiency gains Cost savings

Finance and Accounts

Cash flow Monitoring income/revenue Monitoring expenditure Preparing accounts Raising finance Shares Loans Links with all other functional areas

Production/Operations
Acquiring resources Planning output labour, capital, land Monitoring costs Projections on future output Production methods Batch Flow Job Cell Efficiency

Customer Service
Monitoring distribution After-sales service Handling consumer enquiries Offering advice to consumers Dealing with customer complaints Publicity and public relations

Business Organisation
Organisation by type Global businesses complex organisation structures National organisation possibly stretches throughout the country Regional could be through a county or wider area (North West, South East, etc.) Local small organisations serving local area or community

Business Organisation
Authority the right to make decisions and carry out tasks Span of control the number of people a superior is responsible for Chain of Command the relationship between different levels of authority in the business Hierarchy shows the line management in the business and who has specific responsibilities Delegation authority to carry out actions passed from superior to subordinate Empowerment giving responsibilities to people at all levels of the business to make decisions