It is crucial to have a vivid understanding the concept of business, a business owner when he invests his capital in business ventures. When we look into the market, there are several businesses opened and closed in few months and years. Some businesses become successful and some fails. Therefore, It is vital to pay special attention to comprehend the concept of business in detail before enter into this venture.
Once one started his business after investing his valuable money, which he saved, has to be protected and cannot be lost. As a result, one should think deeply before investing. Once invested, He has to maintain without closing his business. because, business is a long-time activity. The meanwhile, the business owner has to be more patient and work hard in managing his business venture until he gets back the amount of money he invested in his fixed assets which is called break-even point. Before technically delve the concept of business, Let’s understand the what is business about.
What is business?
Indeed, Business is an economic activity, where buying and selling occurs. Because of the business, there are numerous things around us. Customers are waiting for their products and services. The business is creating values to the customer for their money when they pay in business.
Customers needs, wants are fulfilled and their problems are sold and satisfied while the business owners enjoy their profitability and increase their wealth because of these economic activities. When the business owners invest their money in setting up their business, they are also happy and satisfied as they become profitable in their business ventures.
Moreover, It is specially to be understood that business is a risk taking activity. As there are uncertainties in business ventures owing to the environmental changes occurring, business owner has to be vigilant about the external environmental changes which is called PESTEL environment (Political, Economic, Social, Technological, Ecological and Legal Environments) that is dynamic in nature and changes dramatically every day.
As a result, a business owner when he invests his money, he has to be precautioned and vigilant on PESTEL environment ever. This business environmental analysis would be discussed in another article that would be much beneficial for business owner when he continues to develop his business process.
Considering the above, It is essential to define about business. According to Peter Ducker, who is called father of business in this contemporary world and his understanding on concept of business to be shed light here to have a comprehensive understanding about the concept of business.
Peter Drucker believes that the primary purpose of business is to create a customer and also emphasizes the importance of satisfying the customers by fulfilling their needs and wants by creating values for them which should be the central focus of any business when created.
These are the following understanding to be paid special attention by every business owner in their business ventures.
1. Customer-Centric Approach: The main objective of a business is to serve its customers. The business should take heed in the needs of customer when tailoring its products or services accordingly. Therefore, each business owner should identify his target customer first for whom the value is to be created for the money paid in business.
2. Innovation and Marketing: He emphasized the crucial role of innovation and marketing in creating and maintaining customers in business which would lead to the victory of any business. As a result, every business owner has to be innovated and differentiated his business venture according to their target market which would be essentially focused in business.
3.Management by Objectives: Setting clear goals and objectives for business activities to be defined which would allow for effective management and measurement of performance in business. In this respect, a business owner has to define his business long term direction where the business to be taken forward. He has to have a vivid end in mind at the initial point before starting his business process.
4.Human Resource Development: Employees are the most important asset in an organization who should be provided for continuous training and development opportunities in the workplace. Business should always bring the right human resources and retain them by making them competent via training and development programme so that the organization achieve its competitive edge.
5. Social Responsibility: Businesses should always focus on profits. However, it also considers the social and ethical responsibilities in managing the business process that should contribute positively to society through the business ventures. On this basis, Business owner should focus on triple bottom line concept (Profit, People & Planet) which would establish corporate social responsibility (CSR) which is one of the most valued indicators of contemporary business in evaluating business organizations.
6. Management as a Discipline: Management as a discipline has to be considered that would foundational principle process in modern business management. Hence, Business owners should always set up their business system and principles as a discipline when they operate in their process of value creation to satisfy the customers’ needs and wants.
Overall, Peter Ducker’s perspective on business should be focused when a business owners create values for customer with the intention of satisfying their customer needs, and They should think of innovating their business process and marketing them to the target market. The meanwhile, Peter Ducker emphasized that business owners should establish sound management practices that consider the well-being of employees and the larger society in the process of business venture and carry forward considering profitability and customer satisfaction.
Reference:
1. Drucker, P. F. (1954). The Practice of Management. Harper & Row.
2. Drucker, P. F. (1959). The Landmarks of Tomorrow. Harper & Brothers.
3. Drucker, P. F. (1967). The Effective Executive. Harper & Row.
4. Drucker, P. F. (1973). Management: Tasks, Responsibilities, Practices. Harper & Row.
5. Drucker, P. F. (1993). Post-Capitalist Society. Harper Business.
6. Drucker, P. F. (2001). The Essential Drucker. Harper Business.