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Importance Of Business
IMPORTANCE OF BUSINESS
Importance of
business can be judged by the role it plays in our society. Following are the
points to describe importance of business:
1. Production
Except for a few
essential goods and services like water and sanitation provided by the
Government, all of the goods and services needed by a man living in today's
society are produced by business. Businessmen estimate and anticipate
consumers' needs and wants, probe into their preferences, and produce goods and
services which rightly fulfill desires of consumers.
2. Distribution
Whole of the
society depends on business that brings the goods from the place of production
to the place of consumption, stores and preserves the goods from the time they
are produced till the time they are consumed, affect change of ownership from
the producers to the consumers and provide goods to consumers in quantities
desired by them.
3. Employment
Major part of
our workforce is employed in business either as self-employed or as employees.
Government, the other big employer, cannot provide jobs to growing workforce.
It is business that grows and creates new job opportunities and accommodates
vast majority of jobseekers.
4. Efficient Utilization
of Resource
Businessmen, in
order to maximize their profits and in order to survive in competition, make
the most efficient utilization of scarce resources. They strive to produce best
quality of products demanded by consumers in the right quantities and at the
lowest possible cost.
5. Innovation
Innovation means
to make improvement or advancement. In order to grow in competitive
environment, business firms continuously focus on innovations in products, in
uses of products and in methods of production and distribution. As a result
society is provided with new and better products.
6. Economic Progress
Successful
business firms vigorously pursue their development programs. As a result more
and better products are produced with more efficient methods, employment level
raises and income increases, which results in more consumption, which in turn
stimulates business. In this way spending and higher business firms keep the
economy continue to grow.
7. Better Living Standard
Production and
distribution activities of business provide u goods and services we need
everyday. employment to workforce, business provides money to people to By
providing buy these goods and services. Continuously increasing efficiency of
business in utilization of resources and its innovative role contributes
towards raising standard of living.
8. Foreign Relations
Business also
plays an important role in determining status of a nation in international
affairs. Foreign trade creates mutual interdependence among nations and becomes
basis of cooperation among them. Foreign trade of a country creates friendly
relations of the country with other countries. Nations having greater volumes
of foreign trade enjoy better position in international affairs.
9. Collection of Indirect
Taxes
Government
depends upon business for collection of all indirect taxes like sales tax,
custom and excise duties etc. All indirect taxes are ultimately born by
consumers. Business organizations collect these taxes from consumers and
deposit in government treasury.
10. Formulation of
Government Policies
Trade
associations and Chambers of Commerce and Industry provide necessary feedback
and suggestions to government for designing appropriate economic policies. In
this way, business plays valuable role in formulation of economic policies of
government.
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