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Definition of business

L.H Haney said- Business may be defined as humans activity of people detected toward producing or acquiring wealth through buying or selling goods

Peter F Drucker said –  Any organization that fulfills itself through marketing of product or service is a business

Objectives of business

The organization goal can be obtained as the future state of affairs that the organization collectively tries to bring about.

There are four classify of business objectives

1.      Economic

2.      Social

3.      Human

4.      National

. Economic Objectives:

Business is basically an economic activity. Therefore, its primary objectives are economic in nature. The main economic objectives of business are as follows:

(i) Earning profits:

A business enterprise is established for earning some income. It is the hope of earning profits that inspires people to start business. Profit is essential for the survival of every business unit.

(ii) Creating customers:

Profits are not created by God or by the force of nature. They arise from the businessman's efforts to satisfy the needs and wants of customers.

(iii) Innovations:

Business is an organ of dynamism and change. In these days of competi­tion a business can be successful only when it creates new designs, better machines, improved techniques, new varieties, etc. Modern science and technology have created a great scope for innovation in the business world. Innovation is not confined to the invention of a new machine.

Social objectives

Business does not exist in a vacuum. It is a part of society. It cannot survive and grow without the support of society. Business must therefore discharge social responsibilities in addi­tion to earning profits.

According to Henry Ford, "the primary aim of business should be service and subsidiary aim should be earning of profit." The socials objectives of business are as follows:

(i) Supplying desired goods at reasonable prices:

Business is expected to supply the goods and services required by the society. Goods and services should be of good quality and these should be supplied at reasonable prices. It is also the social obligation of business to avoid malpractices like boarding, Black marketing and misleading advertising.

(ii) Fair Remuneration to employees:

Employees must be given fair compensation for their work. In addition to wages and salary a reasonable part of profits should be distrib­uted among employees in recognition of their contributions. Such sharing of profits will help to increase the motivation and efficiency of employees.

 (iii) Employment Generation:

Business should provide opportunities for gainful employ­ment to members of the society. In a country like India unemployment has become a serious problem and the Government is unable to offer jobs to all.

(iv) Fair return to investor:

Business is expected to pay fair return to shareholders and creditors in the form of dividend and interest. Investors also expect safety and apprecia­tions of their investment. They should be kept informed about the financial health and future prospects of business.

(v) Social welfare:

Business should provide support to social, cultural and religious organisations. Business enterprises can build schools, colleges, libraries, Adhara sheilas, hospitals, sports bodies and research institutions. They can help non-government organizations (NGOs) like CRY, Help Age, and others which render services to weaker sections of society.

3. Human Objectives

Business is run by people and for people. Labour is a valuable human element in business. Human objectives of business are concerned with the well-being of labour. These objectives help in achieving economic and social objectives of business. Human objectives of business are given below:

i.Labour welfare:

Business must recognize the dignity of labour and human factor should be given due recognition. Proper opportunities should be provided for utilising indi­vidual talents and satisfying aspirations of workers. Adequate provisions should be made for their health, safety and social security. Business should ensure job satisfaction and sense of belonging to workers.

ii. Developing human resources:

Employees must be provided the opportunities for devel­oping new skills and attitudes. Human resources are the most valuable asset of business and their development will help in the growth of business.

iii. Participative management:

Employees should be allowed to take part in decision mak­ing process of business. This will help in the development of employees. Such participa­tion will also provide valuable information to management for improving the quality of decisions. Workers' participation in management will usher in industrial democracy.

iv. Labour management cooperation:

Business should strive for creating and maintaining cordial employer employee relations so as to ensure peace and progress in industry. Employees should be treated as honorable individuals and should be kept informed.

4. National Objectives

National objectives of business are as follows:

(i) Optimum utilization of resources:

Business should use the nation's resources in the best possible manner. Judicious allocation and optimum utilization of scarce resources is essential for rapid and balanced economic growth of the country.

 (ii) National self-reliance:

It is the duty of business to help the government in increasing experts and in reducing dependence on imports. This will help a country to achieve economic independence. This requires development of new technology and its applica­tion in industry.

(iii) Development of small scale Industries:

Big business firms are expected to encourage growth of small scale industries which are necessary for generating employment. Small scale firms can be developed as ancillaries, which provide inputs to large scale industries.

business process

A business process is an activity or set of activities that will accomplish a specific organizational goal. Business process management (BPM) is a systematic approach to improving those processes. 

The Business Process Management Initiative (BPMI), a non-profit organization, exists to promote the standardization of common business processes, as a means of furthering development of Business Process Execution Language (BPEL) and Business Process Modelling Notation (BPMN). Both languages were created to facilitate communication between IT and line-of-business (LOB).

Business Selection

Benefits: Those who are interested in starting a new business are often told that they should select a business that takes advantage of their skills and experience. But that often leaves them perplexed because they don't really know how to go about doing that. The attached file will clarify some of the confusion by allowing you to rate your interests and compare them to various business possibilities. Once you've completed the "test," you should be well on your way to choosing the business that's right for you.

File Description: The file contains a two-page document in rich text format (RTF) that is suitable for use with most word processing programs used in the Windows environment.

Special Features: Included are the following:

• a place for you to rank all of the business you're currently considering
• an exercise for rating those various business ideas
• a means for interpreting the results of the exercise and a method for selecting the business that's right for you or at least for narrowing your list

 

 

Business Selection Process

Selecting the right business to join an incubator is one of the important tasks of the management team. There are many crieteria to be weighed up, including how ready the applicant is for an incubation process, what the process could add to the applicant's business, and what the applicant's business will add to the incubator. This article steps through in detail how to choose businesses for admission to an incubator.

Objectives

The function of the business selection process is choosing, from amongst candidate companies, those with the greatest potential for success. This is a complex process, because the concept of success is a relative value. Each incubator has its own criteria, that result from the decisions taken during the modelling and planning of the incubator. For more information, see guideline Modelling and Planning an ICT-Enabled Business Incubator. Definitions of partners, mission, vision, objective, focus, model and purpose of the incubator are highlighted

The business selection process must be compatible with the incubator’s internal and external environment. During this process companies are chosen that contribute to improving the indicators used for evaluating an incubator’s performance. See area Evaluating and Reporting on the Incubator.

Key Issues

It is important to ensure that there are a large number of candidate companies. This gives a better chance of selecting high quality companies. That is: the more businesses that take part in the selection process the higher the probability of selecting companies with greater chances of success.

The management team must publicize the incubator at the whole community level and, specifically, amongst potential candidates. See guideline Marketing the Business Incubator.

At the same time procedures must be implemented that make it possible to seek out companies/entrepreneurs to participate in the selection process. See guideline Prospecting for New Entrepreneurs.

The selection process has three critical parts:

1. Definition of criteria
2. Process stages
3. Professionals involved:

1. Definition of Criteria

The choice of selection criteria must give due consideration to the incubator’s characteristics and performance evaluation system. The following aspects are taken into account:

• The stage of the enterprises: A clear definition about which stage an enterprise will be accepted into the incubator. Several questions must be answered at this point.

Ø  Must the enterprise be legally constituted?

Ø  Is it necessary for the enterprise to have a business plan?

Ø  Should the enterprise already be marketing its products?

Ø  Must the product be considered a finished product?

Ø  Can the enterprise be a department/division of an already constituted company?

• Purpose of the Incubator: The importance of the purpose and objective of the incubator is highlighted in the guideline Defining the Incubator’s Purpose. The incubator’s objective (eg public benefits like job creation, or private benefits like profit-making) will influence the selection criteria. Profit-seeking incubators, for example, favour those enterprises with a greater probability of generating financial returns. For non-profit incubators, the social results of the enterprise may be more significant,.
• The Incubator’s Focus: normally, the type of enterprises selected aligns with the incubator’s focus. See guideline Defining the Incubator’s Focus. This is evaluated in the first stages of the selection process. If the incubator supports technology-based enterprises, for example, applications that are not in line with this orientation must be rejected.
• The Incubator Partners: the selection criteria must include companies with attuned aims. That is: companies are selected should have a similar vision to the incubator’s partners. What is important to the incubator’s partners must be evaluated, for example:

Ø  The number of jobs that are generated

Ø  Technological innovations produced

Ø  Level of the enterprise’s potential turnover

Ø  Alignment with specific economic sector(s)

Note: the objectives of the partners shape the selection criteria, but do not determine them.

Mission, vision and objectives: the incubator’s mission, vision and objectives must be assessed critically. This will produce criteria that aid in selecting companies that are compatible with the incubator. Generally, this information influences all the criteria used in the selection process and shapes the profile of the enterprise to be supported:

Ø  Are there technological innovations?

Ø  Are jobs generated?

Ø  Is there profit for the incubator?

Ø  Is there economic diversification?

Ø  Will the applicant’s success contribute to a struggling economic sector?

Ø  Is there consolidation of a given productive arrangement?

Characteristics of the enterprise: criteria must be defined that make it possible to evaluate:

Ø  Feasibility of the Enterprise: An important assessment is the enterprise’s ability to develop in a consistent, sustained manner, independently of the incubator’s focus.

Criteria that can be used are:

Ø  Economic-financial feasibility: evaluations consist of a check that the quantity of resources required is compatible with the quantity of resources available to the entrepreneurs (or obtained from third parties). The time needed to get a return on investments, plus the rate of return and profitability levels.

Ø  Technical feasibility: Is the technology required for product development available and/or can be it developed by the entrepreneurs?

Ø  Degree of innovation: to what extent does the proposed process/product differ from currently existing solutions?

Ø  Team capacity: Is the experience and knowledge of the nominated team adequate to develop the product/service? An assessment should made of the team’s entrepreneurial profile. This is critical to the success of the undertaking and could be done through interviews with psychologists or through various questionnaires or exercises.

Ø  Impact on society: the incubated enterprises must contribute to the improvement of society as a whole. Keeping this in mind, the following criteria also need evaluation:

Ø  Technological impacts: evaluation of the contribution of the enterprise in terms of updating technologies used by companies/communities. See guideline Technological Benefits.

Ø  Social impacts: the enterprise’s potential to improve the quality of life of society. See guideline Social Benefits .

Ø  Economic impacts: evaluation of the enterprise’s contribution to the development of the region/country in which it is located.

The potential for following must be evaluated:

Ø  Is there job generation?

Ø  What is the level of annual income?

Ø  What is the export potential?

Ø  What is the potential for generating taxes?

Ø  Environmental impacts: depending on the focus of the incubator’s actions, an enterprise’s environmental impacts may become significant. A rating could be made of any detrimental environment impact of the processes, products and/or subproducts of the new enterprise.

2. Definition of selection process stages

Selection stages should be planned with an increasing degree of selectivity. The applicant enterprises should be evaluated with regard to their alignment with the incubator’s characteristics, followed by more specific steps for evaluating the merit/quality of the enterprise. Important questions are:

Ø  Preliminary evaluation: the selection process’s first stage chooses those enterprises most in line with the incubator’s characteristics;

Ø  Training: will the selection process include a preparatory course for entrepreneurs (Elaboration of the Business Plan, for example)?

Ø  Interview: time should be planned for the incubator’s management team (or a professional designated by that team) to have contact with the entrepreneurs.

Ø  Evaluation Committee: The involvement of different professionals is essential to the success of the selection process. Consideration should be given to evaluation of the enterprise/entrepreneurs by professionals from outside the incubator.

3. Professionals involved

It is essential that enterprises are evaluated from different points of view. In general terms, this can be divided into four groups, who could form an Evaluation Committee:

Ø  Academics: include researchers and professionals knowledgeable in the technical area/technology focused on by the company

Ø  Market: involves the participation of businesspeople, venture capitalists, and marketing professionals, who can evaluate the enterprise from the business point of view.

Ø  Government and development institutions: ensure a macro vision of the selection process, by evaluating the impacts of the enterprise on society as a whole.