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Scope of business

■ Vast
■ Buy car- supplier of raw material,
manufacturer, dealer, transport agent,
banker, advertising agency, insurance agent
■ Multitudinous activities- bring raw material
to factory, end product from there to market,
constitute business
■ Business includes all activities connected
with production, trade, banking, insurance,
finance, agency, advertising, packaging etc
■ Includes efforts to comply with legal
restrictions, government requirements,
discharging obligations to consumers,
employees, owners, other interest
groups- stake in business directly,
indirectly
■ All above activities- organized/ carried
out- earn profit
■ People occupy central place around
whom, by whom, for whom business is
run
■ Business is people
■ NGOs, non business organizations
follow principles/ practices of
managing a business – competition
among them severe, need top
professionalize their practices to
survive/ prosper
Characteristics of
modern business
■ Transition
Globalization- new environment, increased
competition
Lifting of all protective measures
In between new environment, and old practices
of doing business
Structure( flexible, flat, team based),
transparent environment( dispersed
ownership), styles of management( rational
thinking, vibrant style)
■Pressure of competition
Competing among themselves/ foreign firms
Boon to customers- choice
Defines new ways of doing business
Build new capabilities
Builds new customer satisfaction standards
Makes business proactive
■Immense opportunities
Exploit for one’s advantage
BPOs, KPOs, IT, wealth management
Manufacturing outsourcing- low cost production,
confidence of entrepreneurs, erosion of
competitiveness of traditional manufacturing
centers of world
■ Globalization
Going international – new trend
■ “…technological, political, economic, and cultural

dimensions that connect individuals, governments,


and firms across national borders.” (Rosa Gomez
Dierks)
■ Globalization as ‘Deterritorialization’
■ Breakdown of borders of Space and
Time
Political boundaries- no barriers
Manufacturing, selling in different
countries leading to global competition
Imperative for businesses due to technological
innovations, crumbling trade barriers, global
flow of capital/ technology, changing life
styles, demand for new products
Sustain strong domestic business in terms of
technology, product, market, capital over a
longer period
■ Technology
Characterized by increasing use of
technology
Impact pervasive- production,
marketing, finance, HR,
communication carried out
influenced by technology
■ Information
Recognition of and the need for information
Retrieving, extending information- data
processing, information system analysis,
preparation of effective records, reports-
important
Due to complexities of modern business/ govt
requirements-information crucial
Availability of computers, electronic devices-
quick gathering, processing/ distributing
information feasible
IT- revolutionary changes
Business objectives
■ Represent operational side of an
organization
■ Profit- primary goal, incentive,
motivator, strong sustainer, objective
indicator of productivity, solid basis
for growth, expansion, survival
■ Some – not for profits- hospitals, charitable
institutions, govt agencies
■ Profit – beginning, act as seed money for
more products/ projects/ dividends/ tax
payments/ jobs etc
■ While pursuing profit, should not forget
consumer/ employee satisfaction
■ Growth
Primary objective
Strategies- add more product/market
Diversify
Integrate- backward/ forward
Expand market
Cut costs/ increase productivity
■Power
Business vast resources at its
command
Enormous economic/ political power
Some use for the good of society-
J.N.Tata
■Employee satisfaction and
development
Objective of enlightened business
enterprises
Quality of personnel- hallmark of best
managed/ highly respected
companies
Labour welfare policies, safety/
security measures, provide T&D
facilities
■Quality products and services
To survive competition, stay ahead
of others
Earn brand loyalty- Hindustan Lever
R&D important
■Market leadership
To earn niche for oneself in the
market- innovation in product,
process, finance, distribution etc
important
■Joy of creation
Through strategies- new ideas,
innovations are given shape-
convert into useful products/
services for the benefit of
customers
■ Service to society
Secondary objective
Obligations to society
Provide safe/ quality goods at low
prices
Provide employment
Patronize religious / cultural activities
Maintain/ protect ecology
Support less privileged sections of
people
■Good corporate citizenship
Comply with rules of land, pay tax,
discharge obligations to society,
employee/ customer care
How company logos will
look like when the crisis
is finally over