Business ion

8/6/2019 Business ion

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BUSINESS ORGANIZATION


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INTRODUCTION TO BUSINESS

A business (also known as enterprise orfirm) is an organization engaged inthe trade of goods, services, or both to consumers. Businesses arepredominant in capitalist economies, in which most of them are privatelyowned 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 alsohas a more precise meaning.

The philosophy of "business" relates to the state of being busy either as anindividual or society as a whole, doing commercially viable and profitable work.The term "business" has at least three usages, depending on the scope thesingular usage to mean a particular organization; the generalized usage to

refer to a particular market sector, "the music business" and compound formssuch as agribusiness; and the broadest meaning, which encompasses allactivity by the community of suppliers of goods and services. However, theexact definition of business, like much else in the philosophy of business, is amatter of debate and complexity of meanings.


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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 thebusiness 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 mostforms of partnerships, each partner has unlimited liability for the debts incurred by thebusiness. The three typical classifications of partnerships are general partnerships, limitedpartnerships, and limited liability partnerships.

Corporation:A corporation is a limited liability business that has a separate legalpersonality from its members. Corporations can be either government-owned or privately-owned, and privately-owned corporations can organize either for-profit or not-for-profit. Afor-profit corporation is owned by shareholders who elect a board of directors to direct thecorporation and hire its managerial staff. A for-profit corporation can be either privatelyheld or publicly held.

Cooperative: Often referred to as a "co-op", a cooperative is a limited liability businessthat can organize for-profit or not-for-profit. A cooperative differs from a for-profitcorporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumercooperatives or worker cooperatives. Cooperatives are fundamental to the ideologyof economic democracy.


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Classifications of Business

Agriculture and mining businesses are concerned with the production of rawmaterial, such as plants or minerals.

Financial businesses include banks and other companies that generate profitthrough investment and management of capital.

Information businesses generate profits primarily from the resale

of intellectual property and include movie studios, publishers andpackaged software companies.

Manufacturers produce products, from raw materials or component parts,which they then sell at a profit. Companies that make physical goods, suchas cars or pipes, are considered manufacturers.

Real estate businesses generate profit from the selling, renting, anddevelopment of properties, homes, and buildings.

Retailers and distributors act as middle-men in getting goods produced bymanufacturers to the intended consumer, generating a profit as a result ofproviding sales or distribution services. Most consumer-oriented stores andcatalog companies are distributors or retailers.


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Service businesses offer intangible goods or services and typicallygenerate a profit by charging for labor or other services providedto government, other businesses, or consumers. Organizationsranging from house decorators to consulting firms, restaurants, andeven entertainers are types of service businesses.

Transportation businesses deliver goods and individuals fromlocation to location, generating a profit on the transportation costs.

Utilities produce public services such as electricity or sewagetreatment, usually under a government charter.

There are many other divisions and subdivisions of businesses. Theauthoritative list of business types for North America is generallyconsidered to be the North American Industry Classification System,

or NAICS. The equivalent European Union list is the StatisticalClassification of Economic Activities in the EuropeanCommunity (NACE).Mill


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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 managementand 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.


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CHARACTERISTICS OF BUSINESS

Creation of utilities: Business denotes creation of utility and service forsatisfaction of human wants. Business helps in the creation, distribution andproduction of utilities.

Recurring activities: Business activities are recurring in nature. Recurringpurchase and sales are regarded as identifying marks of the business.

Transferof title: The goods produced or purchased by the business aremade with the intention of sale or transfer of title from the seller to thebuyer. Because of this reason goods acquired for the sake of personalconsumption 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 andthe seller gets the benefit of having money.

Expectation of earning: Business provides a way of living to thebusinessman because he intends to earn profit.


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Profit motive

Enterprise

Risk and uncertainties

Legality

Satisfaction of needs (self and social)

Based upon economic activities


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Human Resources Recruitment and retention

Job descriptions

Person Specifications

Dismissal Redundancy

Motivation

Professional development and training

Health and safety and conditionsat work

Liaison with trade unions


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Sales and Marketing

Market research

Promotion strategies

Pricing strategies Sales strategies

The sales team

Product advice on new product development,

product improvement, extension strategies, targetmarkets


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Research and Development

New product development

Product improvements

Competitive advantage Value added

Product testing

Efficiency gains

Cost savings


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Finance and Accounts

Cash flow

Monitoring income/revenue

Monitoring expenditure Preparing accounts

Raising finance

Shares

Loans

Links with all other functional areas


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Production/Operations Acquiring resources

Planning output labour, capital, land

Monitoring costs

Projections on future output Production methods

Batch

Flow

Job Cell

Efficiency


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Customer Service

Monitoring distribution

After-sales service

Handling consumer enquiries Offering advice to consumers

Dealing with customer complaints

Publicity and public relations


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Business OrganisationOrganisation by type

Global businesses complex organisation structures

National organisation possibly stretchesthroughout the country

Regional could be through a county or wider area(North West, South East, etc.)

Local small organisations serving local area or

community


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Business Organisation Authority the right to make decisions and carry out tasks

Span of control the number of people a superior

is responsible for

Chaino

f Co

mmand the relationship between different levelsof 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

Business ion

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