���������������������Business and Society
The basic objective of business is to develop, produce and supply goods and services to customers.
This has to be done in such a way as to allow companies to make a profit, which in turn demands far more than just skills in companies’ own fields and processes.
Astute entrepreneurs often demonstrate an almost intuitive understanding of the synergies that create success.
The social skills of company owners, together with relationships maintained with customers, suppliers, and other business people, are always vital if companies are to be run well and developed with a view to the future.
Companies improve their resources by developing materials and ideas.
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The goods and services produced must meet demands made by customers, other companies, or public institutions if companies are to survive.
Profitability results when customers are prepared to pay more for goods and services than it costs to produce them.
The ability to produce this kind of added value – profit – is the basic prerequisite for business, but it is also a foundation for prosperity in society.
Only profitable companies are sustainable in the long term and capable of creating goods, services, processes, return on capital, work opportunities, and a tax base.
This is what business does better than any other sector.
Hence, companies’ basic commercial operations are the primary benefit they bring to society.
�Companies benefit society by�
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For a company to progress and develop, it must nurture relations with its stakeholders, of which there may be many.
Some have a strong influence and are of fundamental importance to the survival of the company: these include employees, customers, and suppliers
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The media, authorities, trade unions, and local residents are other stakeholders with a wide-ranging influence.
UNDERSTANDING BUSINESS
A business is an organization or enterprising entity engaged in commercial, industrial, or professional activities.
A company transacts business activities through the production of a good, offering of a service, or retailing of already manufactured products.
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A business can be a for-profit entity or a nonprofit organization that operates to fulfill a charitable mission.
Businesses vary in size, as measured by the number of employees or by sales volume.
But most business units in our country are small units – independently owned and managed and employing fewer than twenty employees each.
Whether a business unit has one or two people working at home, 10 operating in a retail store, 1000 employed in a factory, or 100, 000 operating in multiple units spread across the country, all businesses share the same purpose – to earn profits.
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The role of business in an open market economy system is to create wealth for shareholders, employees, customers, and society at large.
No other human activity matches private enterprise in its ability to marshal people, capital, and innovation under controlled risk-taking, in order to create meaningful jobs and produce goods and services profitably – profit being essential to long-term business survival and job creation.
Running a business requires a lot of knowledge and hard work. There are ongoing activities, business operations, and involvement in the production of value for all stakeholders.
The intended outcome of these business operations is to harvest the
value from the assets owned by the business.
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These assets can be intangible or physical but the effort it takes to harvest them is what constitutes the cycle of business operations.
Once a business owner learns how to increase company value as well as generate and stabilize income, their business will continue to increase in success.
Key Business Skills
Running a small business often requires that you become a jack of all trades.
It is therefore important to know early on the skills that you have and those that you will either have to learn or delegate to others.
�The key business skills to consider include:�
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When considering the skills that you lack there are three avenues you can take:
Every business conforms to the three basic parts of moneymaking – cash generation, return on assets (combination of margin and velocity), and growth.
Whether running an online or traditional business, a business owner must
understand these parts individually and the relationship between them.
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These three basic parts, plus customers, form the nucleus of any business.
Cash is the lifeblood of any business or the company’s oxygen supply.
An astute entrepreneur must always ask the questions:
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Failing to ask these questions often spells the end of the business.
Without cash, a business can be in trouble even if other aspects of moneymaking – profit margin and asset velocity – look good.
If the business generates sufficient cash, the entrepreneur is in a better position to grow the business.
2. Return on assets (combination of margin and velocity)
An entrepreneur uses either his own money or someone else’s money to invest in the business.
The things invested – be it products, stores, or web site – are the business assets.
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An entrepreneur possessing acute business acumen will ask the questions:
An entrepreneur must follow the rule: the return on assets has to be greater than the cost of using their own money and other people’s.
Earning a good return on assets has two components – profit margin and velocity.
Return on assets is simply nothing more than profit margin multiplied by velocity.
In simple arithmetic, return on asset return = Margin x Velocity
A faster velocity leads to a higher return. The faster the inventor reaches the customer, the better it is for the business.
3. Growth: Is vital to every business. It energizes the business and creates new opportunities.
However, growth for growth’s sake does not do any good.
The growth of a business must be accompanied by improved margin and velocity, and the cash generation must be able to keep pace.
A smart entrepreneur does not only push for sales.
Instead, he or she must know how and why the business is growing; and whether the growth can be sustained
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When growing a business, the businessperson must determine if the company is generating or consuming cash and whether the profit margin is improving or getting worse.
Another characteristic of a person possessing business acumen is his or her ability to find opportunities for profitable growth when others can’t.
4. Customers
A universal law of business is that no business can thrive without customers.
Hence, a smart entrepreneur instinctively understands his or her customers.
Entrepreneurs with business acumen have a close connection with their
customers and possess strong convictions that the business cannot thrive without satisfying them.
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Entrepreneurs must always know the pulse of their customers. A knowledgeable entrepreneur knows that the best way to get to know the customer is to make a special effort to observe and talk directly to people who use their products and services.
Find out what the customers need – directly from them.
Direct contact provides insight that even expensive market research cannot.
A business owner must clearly know what the customer is buying.
It may not be the physical product or service alone, but intangible qualities such as reliability, convenience, or trustworthiness.
UNDERSTANDING SOCIETY
A society is a group of people involved in persistent social interaction or a large social grouping sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.
Societies are characterized by patterns of relationships (social relations) between individuals who share a distinctive culture and institutions; a given society may be described as the sum total of such relationships among its constituent members.
In the social sciences, a larger society often reveals stratification or dominance patterns in subgroups.
Insofar as it is collaborative, a society can enable its members to benefit in a way that would not otherwise be possible on an individual basis;
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both individual and social (common) benefits can thus be distinguished, or in many cases found to overlap.
society can also consist of like-minded people governed by their own norms and values within a dominant, larger society and this is sometimes referred to as a subculture.
Societies may also be structured politically.
In order to increase the size and complexity, there are groups, tribes, chiefdoms, and state societies.
These structures may have varying degrees of political power, depending on
the cultural, geographical, and historical environments that these societies must contend with.
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Thus, a more isolated society with the same level of technology and culture as other societies is more likely to survive than one in closer proximity to others that may encroach on their resources.
A society that is unable to offer effective competition to other societies will usually be subsumed into the culture of the competing society.
Characteristics society has the following characteristics:
A society must have a population. Without a group of people, no society can be formed.
Of course, society refers not to a group of people but to a system of social
relationships.
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(2) Likeness: Likeness is the most important characteristic of society.
Famous sociologist Maclver opines that society means likeness. Without a sense of likeness, there could be no mutual recognition of' belonging together' and therefore no society.
Society consists of like bodied and likeminded individuals. Friendship intimacy and association of any kind would be impossible without likeness. It also helps in the understanding of one by the other.
(3) Differences: Along with likeness, differences are another important characteristic of society.
Because society involves differences and it depends on it as much as on likeness.
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The family was the first society based on biological differences and differences in aptitude, interest, and capacity.
Though differences are necessary for social differences by itself does not create society.
4) Inter-dependence:
Interdependence is another important characteristic of society.
This fact of interdependence is visible in every aspect of present-day society.
Famous Greek Philosopher, Aristotle remarked that 'Man is a social animal’. As a social animal, he is dependent on others.
The survival and well-being of each member are very much dependent on this interdependence.
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No individual is self-sufficient. He has to depend on others for food, shelter, and security and for the fulfillment of many of his needs and necessities.
(5) Co-operation and Conflict:
famous sociologist Maclver once remarked that "Society is Cooperation
crossed by conflict".
Cooperation is essentially essential for the formation of society.
Without cooperation, there can be no society. People can’t maintain a happy life without cooperation.
Family is the first society to rest on cooperation. Co-operation avoids mutual destructiveness and results in economic in expenditure.
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Like cooperation, conflict is also necessary for society. Conflict acts as a cementing factor for strengthening social relations.
In a healthy and well-developed society, both cooperation and conflict co-exist. Because with the help of these two universal processes society is formed.
Conflict makes cooperation meaningful. Conflict may be direct or indirect.
However, both are necessary for society.
(6) Society is a network or web of social relationships:
Social relationships are the foundation of society.
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That is why famous sociologist Maclver remarked that society is a network of social relationships
Hence it is difficult to classify social relationships.
But this social relationship is based on mutual awareness or recognition which Cooley calls we-feeling, Giddings calls consciousness of kind, and Thomas as a common propensity.
Without these social relationships, no society could be formed.
Different kinds of social processes like cooperation, and conflict constantly
takes place in society.
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And the relationships established around these create society.
Hence a network of social relationships created among individuals constitutes society.
(7) Society is Dynamic: The very nature of society is dynamic and changeable. No society is static.
Every society changes and changes continuously. Old customs, traditions, folkways, habits, values, and institutions can changed and new customs and values takes place.
Society changes from its traditional nature to modern nature. Hence it is one of the most important characteristics of society.
�8. Comprehensive Culture�
Culture is another important characteristic of society.
Each and every society has its own culture which distinguishes it from others.
Culture is the way of life of the members of a society and includes their values, beliefs, art, morals, etc.
Hence culture is comprehensive because it fulfills the necessities of social life and is culturally self-sufficient.
Besides, each and every society transmits its cultural pattern to the succeeding generations
Business Ethics and Corporate Social Responsibility
Many concepts such as Business Ethics, Corporate Philanthropy, and Corporate Social Responsibility, are sometimes used interchangeably to describe the relationship between business and society, although each has a different aim.
Business ethics are the principles and standards that guide acceptable behavior in business organizations,
but the extent of acceptability of business behavior is determined by a variety of individuals including customers, competitors, government regulators, interest groups, and the public,
thus it relates to society’s evaluation of action as right or wrong.
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Common business problems such as defective products, bribery, and accounting fraud exist due to the lack of or decline in business ethics.
Although the judgment on business actions is based on each individual’s moral principles and values this ethical perception of business stresses the fact that there has been a radical change in society's view of businesses.
SOCIAL RESPONSIBILITY OF BUSINESS
Social responsibility is the idea that businesses should balance profit-making activities with activities that benefit society; it involves developing businesses with a positive relationship with the society in which they operate.
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It is also increasingly being used as a measure of their overall performance.
The social responsibility of business means various obligations or responsibilities or duties that a business organization has towards the society within which it exists and operates from.
Generally, the social responsibility of business comprises certain duties towards entities, which are depicted and listed below.
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The social responsibility of business comprises the following obligations:
2. It must provide fair wages and salaries with good working conditions.
3. It must provide a regular supply of good quality goods and/or services to its consumers/customers at reasonable prices.
4. It must abide by all government rules and regulations, supports its business-related policies, and should pay fair taxes without keeping any delays or dues.
5. It must also contribute in the betterment of a local community by doing generous activities like building schools, colleges, hospitals, etc.
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6. It must take immense care to see that its activities neither directly nor indirectly create havoc on the vitality of its surrounding environment.
7. It should maintain a stringent policy to curb or control pollution in regard to contamination of air, water, land, sound, and radiation leakages.
Here, to do so, it must hire experienced professional individuals who are experts in their respective fields.
8. It should also offer social welfare services to the general public.
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