BBA Business Organization Social Economic Notes
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BBA Business Organization Social Economic Notes
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Business Organization Social Economic
The Primary objectives is to earn profit. But any business activity has its own ramifications not only in the economic field but also in the social and human aspects of the civilisation.
According to Henry Ford, “Business in not mere money chasing but it also should aim at serving the community.” Urwick states that, “Profit can no more be the objectives of a business than eating is the objective of living.
Thus, we see that a is not only an instrument of profit earning but also an harbinger of social contentment and promoter of harmony, justice, fair-play and stability in human relationships. The objectives of business can be broadly classified under the following three headings :
- Earning Adequate Profits : Earning of profits is essential for the survival of any business organisation. ‘No profit no loss’ basis of business cannot be accepted by anyone except a philanthropist. It is not the profit but the profiteering which is bad. In the words of Drucker, whether it is the motive of the businessman to maximize profits is debatable. But it is an absolute necessity for the business enterprise to produce at least the profit required to cover its own future risks, the profit required to enable it to stay business and to maintain intact the wealth producing capacity of the resources.
It follows from the above observations that business should aim at profit. It ensures continuous flow of capital for future replacements, extensions, modernization of business apparatus, etc. Thus, profit acts as the life blood for business.
- Exploring New Markets : Another economic objective of a business is the exploration of new markets and the creation of more customers. The prosperity and continuity of an industry largely depends upon its growth and expansion. In Drucker’s view, “It is to supply the consumer that society entrusts the wealth-producing resources to the business enterprise.”
Thus, a business can sustain itself and grow further only if it is capable of creating a demand for its goods and services. Every business requires to assess its working in relation to the existing environment and re-position itself in the market to meet the changing demands and preferences of the customers. This way, the key to any successful business lies in introducing the products and services to the potential cutomer.
Both business and society co-exist. Neither of these has an existence in isolation. In fact, business and society are the two sides of the same coin. Thus, every business has some obligations towards the society also. Undesirable activities should neither be undertaken, non should adulterated goods is always against the interest of society.
According to Haward Bowever, “Social responsibility of business includes high level of employment high standard of living, swift economic progress, economic stability and national security”
Let us now discuss some of the major social objectives in detail :
- Generation of Employment : One of the social objective of every business is to provide employment to the members of the society. Provision of adequate and full employment opportunities is a very important service of business to the society specially in a developing economy like India. Besides, a handicapped and poor people should be given special consideration at the time of recruitments. To make them useful in work, training must be imparted where necessary. Thus, helping the poor families to increase their earnings and making the handicapped more useful for the society, increase the public images of the business firm.
- Production of Standard Quality Goods : Another social responsibility of every business is production of standard quality goods for the well being of the people. Quality here refers to durability, as in the case of camera, radio etc., or purity as in the case of petrol, medicines and other eatables or safety as in the case of gas stove, water heater, scientific instrument etc. ensuring goods quality of the goods to the society is an improvement responsibility of business.
- Providing Goods at Reasonable Prices : Business must provide high quality of supplies and services to the customers at the reasonable prices which cover costs of production and leave a fair margin of profit will be acceptable to the society. Anti social practices like hoarding, black marketing and over charging buyers are highly undesirable activities. Any business adopting such anti-social or unethical trade practices earn a bad name for itself. Excessive prices with a view to grab unreasonable profits are sure to bring a closure of business soon.
- Fair Return to Investors : Now-a days, the size of business has expended so much that instead of a few persons owing it, thousand people owing it. Many people purchase the shares of sompanies. The business is operated by the money invested by the shareholders business should be to fulfill this expection of shareholders.
- Contribution to Community Development : Business should contribute some thing to the society where it is established and operated. Library dispensary, educational institutions to the society where it is established and operated. Library dispensary, educational institutions etc., are certain contribution which a business can make and help in development community.
Till sometime back if a businessman was asked as to what was his most precious asset, he would have pointed towards his building, plant, goodwill or brand. But the time have changed and now the workers are considered as the most valuable asset. Labour is a precious human element in business. Hence, fair treatment to the workers is regarded as the moral obligation of business.
As prof. Elton Mayo puts, it humanistic attitude makes life more fun for the workers and their job more meaningful. business firms provide for good working conditions for employees and pay them satisfactory wages and salaries.
The efficiency and success of the business enterprise depends mainly on the motivation and ability of its employees. Large business firms generally provide for housing and medical facilities for the employees and their family members. Some of the major human objectives are :
- Fair Deal with Employees : The first human objective is to pay fair wages, salaries and incentives, proper working and living conditions. Employees welfare is no less important than customer satisfaction.
- Participation of Management : Workers will put for their best efforts only when they are given an opportunity to participate in making decisions which affect them. Workers participation in management facilities redressal of employee grievances quickly and at the lowest possible level. Recognition of worker’s representatives and their legitimate activities help to maintain healthy trade union practices and sound industrial relations.
- Job Satisfaction : It is the obligation of business enterprise to make the jobs interesting and challenging. So that employees may get job satisfaction while performing their job section of right man for the job and reducing unpleasantness of jobs help to offer job employees should be treated as human beings rather as working tools. A business enterprise fulfill its human objectives when it recognize the dignity.
In today scenario the business is expected to serve as instrument for the fulfillment of national needs as aspirations as implemation of national plans and policies in accordance with the accepted priorities. Keeping in view the overall national objectives of establishing a democratic, secular and socialist society and foresting growth stability and social justice business have to serve the national objectives which are as follows :
- Production According to National Priorities : In keeping with national plan objectives, business enterprise should manufacture and supply goods necessary for country development. It is also the national objective of the business to manufacture the cheaper varieties of essential commodities like soap, cloth, edible oil, etc.
- Regular Payment of Taxes : The biggest sources of income for government is money received through tax collection. Hence business should pay their taxes duly calculated and on time. Evasion of tax is violation of trust of motion. By elimination the ovil of tax evasion, business should fulfill the objective.
Proper use of National Resources : Business is the result of use of national resources. Hence, it is expected from business that it will utilize the national resources optinally. By the optimal utilization of resources here means that first of all the necesstities of people are fulfilled and then remaning resources and used in a manner to manufacture comfort and luxary goods.
Business Organisation Mail Order Internet Tele Shopping
Mail order Business
If you want to buy some durable items it is not always necessary that you go to a fixed shop and get the goods from the seller. An advertisement in the newspaper attracts the attention of a person to certain goods. He fills up the coupon and sends it to the seller. The seller receives the goods from the postman by paying the required amount. The seller later collects the money from the post office.
This is a system of sale by post and is know as mail order business. It is also called shopping by cost. It is a method of selling goods by producers or traders directly to the customers through post office.
The seller advertises the products through newspapers, magazines, television, booklets, catalogues etc., to make the customer aware about the product. The advertisement contains detailed particulars about the goods and is designed in an attractive way to create an interest in the mind of the customers to buy it.
The advertisement may contain an order form or coupon, which the customer has to fill up and send at the address of the mail order house. After receiving the order the mail order house packs the goods properly and sends them through the post office under value payable post (VPP).
The post office delivers the goods at the buyer’s place and collects the money from the buyer. Then it remits the money to the seller or sender of the goods.
Feature of Mail Order Business (BBA Notes)
- The entre process is carried out through the postal system.
2. Buying and selling takes place without any face-to-face contact between the buyer and the sellers.
3. Seller advertises the products giving detailed description of goods, mode of payment, terms of sales, etc., in the newspapers, magazines, letters, catalogues, etc.
4. Seller receives order from the buyer by post.
5. Seller sends the properly packed goods to the buyer through value payable post.
6. The seller receives payment through post office.
7. No middleman is involved in the process.
Advantages of Mail Order Business
- The customers can easily purchase the goods while sitting at their place. It saves time and effort of the customers.
2. Mail order business can be started with small amount of capital, as the business man does not required to hold large stock of goods.
3. Generally it assures the customers that they can get back their money if they are not satisfied with the product. This creats confidence in the minds of the customers.
4. Mail order business is done on cash basis. There is practically no risk of bad debts.
5. It serves as wide market with a large number of customer.
Today telephone has become an indispensable means of communication in business. You must have observed that the businessman near your locality gives order for purchase of goods and also receives orders from the customers to send the goods to their home. This may happen in case of fixed shop near your locality.
But there are certain big business house where all transactions take place through telephone. They contact the prospective buyer through telephone and persuade them to buy their products. In some cases they advertise their or other media. They clearly explain the feature and also make live demonstration of the products.
The price and code number (if any) of the products and the telephone number of the sellers are displayed on the screen. As a customer, you are supposed to dial the telephone number and give your order.
They will deliver the goods at the desired place on receipt of the payment. This is tele shopping. Asian sky shop and tele-brands are the examples of those doing tele-shopping business in our country. Let us see what are the advantages of this system.
Advantages of Tele Shopping BBA Study material
- It saves time money and effort in placing a written order to buy the goods.
2. It is a convenient method of shopping for people who are busy and do not have much time for shopping.
3. It eliminates the role of middlemen in the process of distribution.
4. Buyers can inquire about the terms and conditions of sale, mode of payment packaging etc., from the sellers without visiting the seller’s place.
Internet Shopping (BBA Notes)
Shopping through internet or internet shopping is a system of retailing of goods through the internet. The sellers or manufacture provides all information regarding the product, its specification, user, etc., through its website. As a customer you have to access the website and view different products according to your need.
Then you can compare the price of similar products available and also give special instructions to the seller regarding the supplier or seller delivers the goods at your credit card.
Or receiving your order the visit a world market, make best choice of goods and buy the goods of your need just by sitting at you can also give order from the cyber cafes. This type of retailing is also called ‘on-line shopping’. This is suitable for selling books, magazine, journals, software, health and beauty care items, etc.
Advantages of Internet Shopping
- Goods from international market can be purchased sitting at home.
2. It saves time and effort of the customers.
3. It is the quickest mode of retailing.
4. The sellers find it economical because there is no need to keep large stocks of goods their stores.
5. This system is very useful in foreign trade.
Tools of Sales Promotion (BBA Notes)
Mail Order Internet Tele Shopping
To increase the sale of any product manufacturer or producer adopt different measures like sample, gift, bonus and many more. These are know as tools or techniques or methods of sales promotion. Let us know more about some of the commonly used tools of sales promotion.
- Free Samples : You might have received free samples of shampoo, washing powder, coffee powder, etc., while purchasing various items from the market. Sometimes these free samples are also distributed by the shopkeeper even without purchasing any item from his shop. This are distributed to attract consumers to try out a new product and thereby create new customers. Some businessmen distribute samples among selection persons in order to popularize the product. For example, in the case of medicine free samples are distributed among physicians, in the case of textbooks, specimen copies are distributed among teachers.
2. Premium or Bonus Offer : A milk shaker along with Nescafe, mug with Bournvita, toothbrush with 500 grams of toothpaste 30% extra in a pack of one kg, are the examples of premium or bonus given free with the purchase of a product. They are effective in inducing consumers to buy a particular product. This is also useful for encouraging and rewarding existing customers.
3. Exchange Schemes : It refers to offering exchange of old product for a new product at a price less then the original price of the product. This is useful for drawing attention to product improvement. ‘Bring your old mixer-cum-juicer and exchange it for a new one just by paying ₹15 off on a pack of 250 grams of Taj Mahal tea, ₹ 1000 off an cooler, etc., are same of the common schemes. This type of scheme is designed to boost up sales in off-season and sometimes while introducing a new product in the market.
4. Coupons : Sometimes, coupons are issued by manufacturers either in the packet of a product or through an advertisement printed in the newspaper or magazine or through mail. These coupons can be presented to the retailer while buying the product. The holder of the coupon gets the product at a discount. For example, you might have come across coupons like, ‘show this and get ₹ 15 off on purchase of 5 kg. of Annapurna Atta’. The reduced price under this scheme attracts the attention of the prospective customers towards new or improved products.
5. Fairs and Exhibitions : Fairs and Exhibitions may be organized at local, regional national or international level to introduce new products, demonstrate the products and to explain special features and usefulness of the products. Goods are displayed and demonstrated at Pragati Maidan, which is held from 4th to 27th November every year, is a well known example of Fairs and Exhibitions as a tool of sales promotion.