We have been amidst businesses for as long as we can remember. It is absolutely not an overstatement to say that everything that surrounds you is businesses. From your computer screen to the chair, you sit on, everything is a chain of business. Further, we will learn about the Concept and Characteristics of Business.
Concept and Characteristics of Business
Business necessarily has to be an economic activity. But what exactly is an economic activity? Any activity that gives a monetary return is an economic activity. For example, if your friend’s father picks you up and drops you at college every day, he is doing this act out of kindness. But if he starts a transportation service of picking up and dropping by charging money then it’s an economic activity. SIPA tends to educate you on how to separate gestures of kindness from your business which might grossly affect returns. How to separation family, friends relatives from your business without the two parties being affected in any matter.
This refers to functions that aim in effective utilization of people and resources in an organization to achieve business goals. So it is a means to achieve an end. Essentially, there are five functions in business management, and they are:
is the starting point. In this phase, you create your business plan and how you are going to achieve it. But it is not as easy as it sounds. You need to make a realistic assessment of your business goals and chart out the detailed strategies (with full back up plans in case if those strategies fail) through which your company can achieve its business objectives.
This follows planning. Here you organize all your resources like employees, machines and finance into a well-oiled unit. You need to get all these combination and synchronization right. Organizing helps you to define “who is going to do what”. It set well demarcated job roles, organizational hierarchies and streamlines co-ordination between them.
Staffing deals with acquiring, deploying, and retaining the right skilled workforce to get the business results. The objective of staffing is to create the right positive impacts on the organization’s effectiveness. Through staffing you get the right people at the right positions doing the right things. In short, it’s about right delegation.
This is the most important function of the management process. Without motivated workforce, you can never you achieve your business goals. Leading is all about how you can align employees’ tasks with the overall organizational goals. Leading is how you can motivate, influence and inspire your employees to give their best performance at work. Leading is how you can make your employees participate willingly in the growth and development of the company.
is active and constant monitoring of people, process and other resources of your company. Here you track the performance of all the resources of your company and ensure that they are on the right track. Through controlling you can accurately evaluate whether all the resources of the company are optimally utilised for desired business gaols. And making corrections whenever and wherever there are deviations, mistakes and loopholes.
Concept of Business Environment
Just like human beings, business also does not function in an isolated vacuum. Businesses function within a whole gambit of relevant environment and have to negotiate their way through it. The extent to which the business thrives depends on the manner in which it interacts with its environment. A business, which continually remains passive to the relevant changes in the environment, is destined to gradually fade-away in oblivion. To be successful business has not only recognized different elements of the environment but also respect, adapt to or have to manage and influence them. The business must continuously monitor and adapt to the environment if it is to survive and prosper. Disturbances in the environment may spell extreme threats or open up new opportunities for the firm. A successful business has to identify, appraise, and respond to the various opportunities and threats in its environment.
As stated above, the success of every business depends on adapting itself to the environment within which it functions. For example, when there is a change in the government policies, the business has to make the necessary changes to adapt itself to the new policies. Similarly, a change in the technology may render the existing products obsolete, as we have seen that the introduction of computer has replaced the typewriters; the colour television has made the black and white television out of fashion. Again, a change in the fashion or customers’ taste may shift the demand in the market for a particular product, e.g., the demand for jeans reduced the sale of other traditional wear. All these aspects are external factors that are beyond the control of the business. So, the business units must have to adapt themselves to these changes in order to survive and succeed in business. Hence, it is very necessary to have a clear understanding of the concept of business environment and the nature of its various components.
Features of Business Environment
To be more specific, proper understanding of the social, political, legal and economic environment helps the business in the following ways:
Identifying Firm’s Strength and Weakness:
Business environment helps to identify the individual strengths and weaknesses in view of the technological and global developments
Determining Opportunities and Threats: The interaction between the business and its environment would identify opportunities for and threats to the business. It helps the business enterprises for meeting the challenges successfully.
Giving Direction for Growth:
The interaction with the environment leads to opening up new frontiers of growth for the business firms. It enables the business to identify the areas for growth and expansion of their activities.
Environmental analysis makes the task of managers easier in dealing with business challenges. The managers are motivated to continuously update their knowledge, understanding and skills to meet the predicted changes in realm of business.
Environmental understanding helps the business organisations in improving their image by showing their sensitivity to the environment within which they are working.
Meeting Competition: It helps the firms to analyse the competitors’ strategies and formulate their own strategies accordingly.