Definition of Business Ethics. Profit is the main objective. Following are some of the most standard cases of business definition: “We design develop, produce, market and service micro-processor based personal computers in United States and foreign countries.”, “Hewlett-Packard’s business is concentrated on developing high-quality products. The pure cotton concept is gaining ground in 1990s and 2000 as general public is fed up with synthetics and silk, they use silk as occasional wear and the rest as daily use. Customer function (needs) relate to what is being satisfied. However, whatever dimension is chosen for defining business, it must reflect two features: While defining a business, an organization should focus on its chosen field of business activity. As against this, if the organization is charging a much lower price in the same product group excluding quality, price becomes a differentiating factor. A company is an organization and legal entity set up by a group of people for the purpose of operating either a commercial or industrial business enterprise. 2. For example, let us see the business of a textile company located in Surat which has defined its business as textiles. – Boono & Krutz, “Business may be defined as human activity directed towards producing or acquiring wealth through buying and selling goods”. The term ‘Entrepreneur’ is defined in different ways. As Calkins remarks – It is now recognised that the direction of business is important to the public welfare, that businessmen perform a social function. Examples of private companies include Koch Industries, candy maker Mars, car rental company Enterprise Holdings, and accounting firm PriceWaterhouseCoopers. Then it prescribes the arena in which the organisation will play and compete. Business activities are divided into various functions, these functions are assigned … ii. A company is a legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise. Accessed Sept. 24, 2020. Based on above definitions, business may be defined as: Business refers to those economic activities, which are connected with production, purchase and sale of goods or supply of services with the main object of earning profit. However, no consensus has been arrived at a universally accepted definition of entrepreneur. According to Davis and Blomstorm, “our modem view of society is an ecological one. He suggests a three-dimensional model, with the following three axes: i. Technological dimension of business definition specifies what activities are to be undertaken to produce and deliver products and/or services, and to enhance their value for customers. They can also be distinguished between private and public companies. Dr. Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value … A company is generally organized to earn a profit from business activities. It is a word we hear very familiar in everyday life, because education is considered the most significant activity in any society. The definition of recruitment and selection are given according to various authors. Focus of business may be defined in terms of the kind of functions the business performs rather than the broad spectrum of industry in which the organization operates. It is meant here giving clear cut description of products, activities, or functions and markets that the firm presently pursues. Some of these definitions are meticulously written below: The Research Machines (2004) gives four definitions to MNCs. A person may be busy in playing computer games or watching TV. The business is carried on with a motive to earn a profit. Profits are a mechanism for motivating these activities”. There are, moreover, many organisations, both private and public, which do not aim at profit from their business, hi short, the definition of a business as a commercial activity to make a profit or an organisation formed to make a profit is an arrow one. The principle of limited liability is a feature as well as a privilege of the corporate … An employee working for a matrixed company, for example, … The main goal of all commercial enterprises is to attract customers or clients, and make them purchase what they have on sale. vii. Business Definitions – Dimensions and Levels of Business Definitions, Abell suggests that a business may be defined along three dimensions- customer groups, customer functions, and alternative technologies, Business Definitions – With Attributes of a Good Business. Small Business Administration. Internal Revenue Service. The bureaucrats look upon it as a system of authority to achieve business goals. It clarifies to the firm the various sources from which threats and competition will come for. This definition does not reveal the distinctive – Musselman & Hughes, “Business may be defined as an activity in which different persons exchange something of value whether goods or services for mutual gain or profit”. Though there are different bases on which customers can be segmented and every text on marketing management deals with these, here, the customer segment can be defined in terms of the type of satisfaction it looks for in a product and the price it is ready to pay for that satisfaction and the location of that segment. Business Definition sets and limits the contours of the business. Therefore, bicycle manufacturing is not really the business definition for the organization from strategic point of view but pinpointing some particular dimensions on which it will compete in the market. The “business” part of thedefinition is pretty simple. It is the economic pulse to a nation striving to increase society’s standard of living. It must be related to basic benefits the product offers. Such focus and differentiation are required in all dimensions on the basis of which business is defined. Prohibited Content 3. So, business means a state of being busy in economic activities. These structures also denote the ownership structure of the company. Section 3(1) (ii) Of the act states that “an existing company means a company formed and registered under any of the previous companies laws”. These two dimensions have been taken by Drucker when he says that in defining the business, following questions can be asked: 3. In. ‘A product oriented business definition focuses just on the products sold and the markets served’ such an approach obscures the company’s function to satisfy consumer needs. It should not be narrow. This changing trend should be capitalised. "Investor Bulletin: Private Placements Under Regulation D." Accessed Sept. 24, 2020. Categories of customers, (who), ii. The mission should contain the substance of business definition to indicate the nature of the business the firm will pursue. Consequently, many of the conglomerates such as ITT, Textron and Gulf and Western broke up and downsized. A person may be busy in playing computer games or watching TV. At the business level, the focus should be on a consumer-oriented definition. ‘Functions’ mean the technologies or processes used to create and add value. Following are some popular definitions of business: “Business may be defined as a human activity directed towards producing or acquiring wealth through buying and selling of goods”. People engaged in business earn income in the form of profit. What will it be? Alternative technologies explain the manner in which a particular function can be performed for a customer. Helps in exercising a choice among different strategic alternatives. Many different definitions of systems thinking can be found throughout the systems community, but key components of a singular definition can be distilled from the literature. What is our business? We will better understand the nature of business definition, if we look at it in conjunction with corporate mission. Content Guidelines 2. It is elaboration of the business arena and the boundaries in which it will play. OK, let’s break theterm “small business” down. Disclaimer 8. Business can be defined along three dimensions—product, customer, and technology. — L. H. Haney, “All of the activities included in the production and sale of goods or services may be classified as business activities.” — W. R. Spriegel, “Economic activities performed for earning profits are termed as “Business”. "Public Companies." The word "company" is synonymous with the word "firm.". Many authorities, scholars, and authors have variously defined multinational companies from different perspectives. Business is a wide term and signifies all economic activities carried on with the objective of earning money or profit or gain. Drucker has emphasized this point by saying: “What is our business is not determined by the producer but by the consumer … by the want the consumer satisfies when he buys a product or service.”. Taking these three dimensions and Drucker’s narration of customers, an organization has to define its business in three contexts: All these elements are highly interrelated and make sense only when they are considered together. However, a single organization cannot be able to satisfy all needs of all people. This prevents fraudulent reports and activities., Private companies, on the other hand, are held under private ownership. – Lewis H.Haney, “Business is the sum total of those processes which are engaged in the removal of hindrances of persons (trade), place (transport and insurance) and time (warehousing) in the exchange (banking) of commodities”. What is our business? Companies can be either public or private, both of which have different ownership structures, rules, and regulations. For example, a bicycle manufacturer cannot compete in the industry unless it is very much precise about what type of bicycles it produces—price, customer segment, and functional utilities being the differentiating factors. iii. What does the customer consider value? Then, price does not become a differentiating factor. In a diversified company, the activity of defining the business may take place at two levels: the business level and the corporate level. Differentiation in business is how an organisation differentiates itself from others so that the business concentrates on achieving superior performance in the market. for channelizing them into productive activities. "Business Structures." Nature of business is one of the components of mission of an organization. Defining the business involves answering these questions- “What is our business? 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