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| Functions Of Business |
Functions of Business
FUNCTIONS OF A
BUSINESSMAN
Functions
performed by a businessman are briefly explained in the following lines. A
businessman is not required to perform each and every aspect of these functions
personally. He may delegate authority to his employees and make them
responsible to perform as much of these functions as he thinks fit.
1. Financing and Risk
Taking
Without finances
no business can be done. It is primary responsibility of an entrepreneur to
provide necessary finances to his business. At the same time an entrepreneur
assumes the risk that if the business turns out to be unsuccessful he will bear
the loss. In other words, a businessman undertakes responsibility to pay all
business expenses even if the business funds are insufficient and he is
required to pay out of his personal assets or to borrow additional funds.
2. Magnagin
Managing means
getting things done through others. A businessman employs a team of workers and
he is responsible for creating an environment in which the workers work
efficiently. Even if a business is too small to employ any worker and the
businessman performs everything himself, still he is required to perform some
of the managerial functions. As a manager, a businessman performs following
functions:
(i) Planning
A plan is a
course of action to be taken in future. Businessman sets. objective of his
business and of various departments of the business and identifies practical
steps to be taken to achieve them.
(ii) Organizing
Organizing means creating and defining roles
of members of an organization. Businessman creates positions or jobs in his
organization, determines responsibilities of each of the positions and by means
of authority responsibility relationship he connects these positions with one
another.
(iii) Staffing
Process of
filling and keeping filled by suitable personnel the positions created in an
organization is called staffing. For this purpose a businessman takes such
steps as human resource planning, recruitment, selection, orientation, training
and development, performance evaluation, rewards, etc.
(iv) Directing
Directing is
telling members of an organization what to do and ensuring that they do it to
the best of their abilities. This function of a businessman is concerned with
guiding, influencing, supervising and inspiring personnel by means of
communication, motivation and leadership to accomplish desired objectives.
(v) Controlling
Controlling
means ensuring that everything is working in the organization as it should. It
involves setting standards of performance, measuring actual performance, and
making corrections and adjustments where the deviations occur. 3. Marketing.
3. Marketing
is a process of determining needs and wants of
target market and delivering the desired satisfactions more effectively and
efficiently than competitors2. Marketing is regarded as the most challenging
function of a businessman because in a business it is only marketing that
generates revenues³. Marketing function of a businessman revolves around
following points:
(i) Product
A product is anything that can be offered to a
market for attention, acquisition, use, or consumption that satisfies a want or
need. It includes physical objects, services, places, organizations and ideas.
With reference to product a businessman decides and executes strategies
regarding product mix, branding, packaging, new product development etc.
(ii) Price
Price is value
of a product expressed in monetary terms. Pricing is considered as a key
activity because price is one of the most important determinants of a company's
market share and profitability. Pricing involves such decisions as setting the
prices, initiating and responding to changes in the prices, policies regarding
discounts and allowances etc.
(iii) Distribution
This aspect of marketing is concerned with
moving products and their ownership from producers to consumers. It involves
such activities as selecting and operating channel of distribution and managing
physical distribution of products.
(iv) Promotion
Promotion means
communication with target market to create and stimulate the demand i.e.
communication with present and potential customers to inform and persuade them.
It includes such tools as advertising, personal selling, sales promotion,
publicity, public relations etc.
4. Purchasing
Sales and
profitability of business concerns largely depend upon effective purchasing.
While performing purchasing function a businessman is concerned with such
factors as quantity, quality, price, terms of payment, packing, terms and time
of delivery of goods etc.
5. Inventory Management
Inventory
management means maintaining a balanced inventory. In other words, inventory
management means keeping as much inventory that neither it is too low that
results in stock out nor it is too high that denote inefficient use of capital.
Inventory of a business may consist of thousands of items; therefore, inventory
management requires careful attention of the businessman. This function also
includes provision of suitable storage facilities i.e. warehousing.
6. Production/Operations
Management
Production is
creation of goods and services. Production activities that go on in the
organization are often referred to as operations. Operations management is the
term used to denote management of any aspect of the production system. Apart
from day to day management of production system, while performing this
function, the businessman is required to devote his attention to such factors
that increase quality of products and efficiency of production process.
7. Accounting
Managing a
business is a matter of making decisions. In order to make sound decisions, the
decisions should be based on accurate, pertinent and timely information. Accounting
is an information system that provides businessman with a information necessary
to manage his business. It enables the businessman to records in a systematic
manner the transaction taking place in his business, to know the results of its
operations, to ascertain its financial position, to exercise control over its
operations, to make estimates and forecast, to prepare plans, to evaluate
alternative courses of action, etc.
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