What is
business?
Business is an economic activity. It
relates to all those activities which are related to the production and
distribution of goods and services for earning of profit.
OR
Any legal activities which have performed
any person for earning profit is called business.
Functions:
The modern
business is subject to fast changes. It is increasing in size, number and form
with the passage of time. The main functions performed by a modern business in
brief are as under.
1.
Production function: the main function of a business is to
produce goods and services that satisfy human wants and sell them at profit to
the consumers. The process of raising crops removing materials from mines,
forests, manufacturing raw material into semi finished or finished goods to
satisfy the requirements of consumers etc.
2.
Financial function:
Another important function of a business is to secure finance to operate
it. A continuous supply of funds is required to run the business. Basically
there are two sources of raising funds (1) owner’s capital (2) borrowed
capital. A business can carry on its operations with its own resources or can
avail of both the sources for meeting its working and fixed capital
requirements.
3.
Management function: In modern business of today, human
resource management is considered very essential. Management is the process of
getting things done through others. Management is principally the task of
planning, coordinating, motivating and controlling the efforts of others
towards a specific objective.]
4.
Innovation: In the modern days of competition,
innovation is the life blood of business. The innovative function is based on
the two elements 1)individuals should be encouraged to create new ideas and
2)communicate freely about the nature of products and goods.
5.
Organization function: A modern business should have a
sound organizational structure. Sound organization helps in the elimination of
duplicate activities in the business, efficient use of specialized talent
economic use of equipments economies in transportation and distribution
encourages product growth and profit of the business.
6.
Controlling function: the purpose of controlling function
is to examine the past and present activities of business. If the manager finds
that the performance in his area of control is falling from a standard he takes
quick action to correct it.
7.
Motivating function: In order to improve the overall performance in
a business it is essential that the efficiency of the employees should be
increased. Motivation is an important factor which encourages employees to give
their best performance and help in reaching the business goals.
8.
Risk taking function: Every business faces risks and
uncertainties. Risk is caused by some unfavorable and undesirable events. Some
risks are such that they can be reduced but cannot all be avoided. However some
risks can be sa
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