Business refers to the regular production or purchase and sale of goods undertaken with an objective to earn profit and acquiring wealth through the satisfaction of human wants. Every business requires some form of investment and a sufficient number of customers to whom its output can be sold at profit.
Business and its Environment
Environment refers to all external forces that have a direct bearing on the functioning of a business. Objectives can be decided after understanding the environment in which the business runs. Both the business and its environment are responsible to each other. There are various segments of the environment that may be classified as:
Social: It includes the consumers, employees and the social institutions to which business provides benefits.
Economic: There is close relationship between the business and its economic environment. Business obtains all its inputs from economic environment. It also includes the other business units which an enterprise has to deal with.
Political: It includes the various political institutions, government and its legislature. These institutions take the income of the enterprise in the form of the taxes.
Technological: It includes the technical know-how. Technology changes fast and to keep pace with it, businessmen should be alert to adopt changed technology in their business.
Objectives of Business
Profit Earning: Without earning profit no business can survive in the competitive market. Profit making is the primary objective for which the business came into existence. Profit must be earned to ensure the survival of business, its growth, and expansion overtime.
Innovations: Innovations means changes, that brings improvement in products, process of production and distribution of goods. Through innovations business can reduce its cost of by adopting better methods. It can also increase its sales by attracting more customers with improved products.
Optimum use of resources: As business needs lots of resources like man, material, money, machinery etc. to run its business. Due to the limited availability of these resources business must use it in an optimum way.
Productivity: A business firm can succeed only if it can produce maximum output with limited available resources.
Development of human resource: Business should develop proper training and development for improving the skills of manpower. Better skills of employees will lead to prosperity of the business.
Supply of quality goods: The objectives of the business should be to produce better quality goods and supply them at the right time and the right place. Business should charge fair prices according to the quality of the goods.
Creation of Customers: Business cannot survive unless there are customers to buy the products and services. To earn the profit, a businessman has to produce goods and services at reasonable prices. For attracting more customers businessmen has adopt to adopt various marketing strategies.
Creation of employment: Business should also focus towards the creation of employment opportunities. This can be achieved by establishing new business units, expanding market, widening distribution channels etc.
There are some of the factors that arises the need of business to be responsible towards the society. Some of the following factors are:
Public Image: The activities of the business towards the welfare of society will earn goodwill and reputation. If business engages itself in various welfare programs for the society then people will prefer to buy the products.
Government Regulation: To avoid the government regulations businessmen has to be responsible towards the society. If a businessman violates the government regulations then it may ultimately force the firm to close down its business.
Survival and Growth: For the survival and the growth of the business, support of society is very much essential. Business utilizes various resources of the society. So it will be the responsibility of the business to serve the society.
Employees’ satisfaction: Besides getting good salary and working in the healthy environment, employees need some other facilities like training, transportation, education etc. All these facilities directly affect the production and prosperity of the organization.
Consumer awareness: Now a day’s consumer is very much aware about their rights. It is obligatory for the business to protect the interest of the society by giving quality goods at most competitive prices.
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