FYBCOM SEM I COMMERCE I UNIT 1 S M SHETTY COLLEGE.pdf

Introduction: The concept of Business, Functions, Scope and Significance, and Traditional and Modern Concepts. Challenges faced by Businesses in India.
Objectives of Business: Classification of Business Objectives, Reconciliation of Economic and Social Objectives.
Strategic Alternatives in Changing Scenarios: Restructuring and Turnaround.
Recent Trends in Business, VUCA World and its Impact on Business.

1. INTRODUCTION TO BUSINESS
FYBCOM
SEMI
COMMERCE I
DR VIJAY VISHWAKARMA 1

2. CONTENTS
•➢Introduction: The concept of Business, Functions, Scope and
Significance, and Traditional and Modern Concepts. Challenges faced
by Businesses in India.
•➢Objectives of Business: Classification of Business Objectives,
Reconciliation of Economic and Social Objectives.
•➢StrategicAlternatives in Changing Scenarios: Restructuring and
Turnaround.
•➢RecentTrends in Business, VUCA World and its Impact on Business.
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3. Concept of
Business
A business isan organization or entity that engages in
commercial, industrial, or professional activities to produce or
sell goods or services for profit.
The goal of a business is to satisfy customer needs while
generating profits.
Businesses can be for-profit or non-profit, and can range in
size from sole proprietorships to large international
corporations.
Business isan economic activity that involves the exchange,
purchase, sale or production of goods and services with a
motive to earn profits and satisfy customers' needs.
Businesses can be profit or non-profit organizations that
function to gain profits or achieve a social cause.
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4. Functions of Business
➢Strategy
➢Finance
➢Sales and marketing
➢Research and development
➢Information technology
➢Customer service
➢Human resources
➢Quality management
➢Production
➢Distribution
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5. Scope of Business
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6. Significance of Business
➢Economic Growth
➢Job Creation
➢Innovation and Progress
➢Wealth Generation
➢Competition and Consumer
Choice
➢Tax Revenue
➢Social Responsibility
➢Entrepreneurship
➢Global Trade and Connectivity
➢Social Mobility
➢Market Efficiency
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7. Documentaries
•Lay's Documentary
https://youtu.be/YV0b0nnCshs
•NikeDocumentary
https://youtu.be/Gi7Vy_2B_D8
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8. Traditional
Concepts of
Business
Profit Maximization:
Objective: The primary objective of traditional
business is to maximize profits for the owners
or shareholders.
Focus: Emphasis is on increasing sales,
reducing costs, and maximizing shareholder
value.
Operations: Business operations are centered
around cost control, revenue generation, and
financial performance metrics.
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9. Product-Centric Approach:
Production: Focus on producing goods or services efficiently and effectively.
Standardization: Products are standardized to achieve economies of scale and cost advantages.
Quality Control: Emphasis on maintaining high product quality and reliability.
Top-Down Management:
Hierarchy: Traditional businesses follow a hierarchical structure with clear lines of authority and
control.
Decision-Making: Decisions are made by top management and implemented by lower levels of the
organization.
Control: Strong emphasis on managerial control and supervision.
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10. Limited Stakeholder Engagement:
Stakeholders: Focus on satisfying shareholders and
investors primarily.
Customer Relations: Customer relationships are
transactional, with limited emphasis on building
long-term loyalty.
Employee Relations: Employees are seen as
resources to be utilized for business goals, with less
emphasis on their development and well-being.
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11. Modern Concepts of Business
Sustainability and Corporate Social Responsibility (CSR):
•Triple Bottom Line: Modern businesses consider the triple bottom line of people,
planet, and profit.
•Environmental Impact: Emphasis on sustainable practices and reducing
environmental impact.
•Social Responsibility: Commitment to ethical practices and contributing to the well-
being of society.
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12. Customer-Centric Approach:
•Customization: Focus on providing personalized products and services tailored to
individual customer needs.
•Customer Experience: Emphasis on creating exceptional customer experiences and
building long-term relationships.
•Feedback and Engagement: Actively seeking and incorporating customer feedback to
improve products and services.
•Agile and Flexible Management:
•Flat Organizational Structure: Adoption of flatter organizational structures to
promote flexibility and quick decision-making.
•Innovation and Adaptation: Encouraging innovation and adaptability to respond to
changing market conditions.
•Empowerment: Empowering employees to take initiative and make decisions.
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13. Broad Stakeholder Engagement:
•Inclusive Stakeholder Model: Engaging a broader range of stakeholders, including
customers, employees, suppliers, communities, and investors.
•Employee Engagement: Investing in employee development, well-being, and creating
a positive work culture.
•Community Involvement: Actively participating in community development and
addressing social issues.
Technology Integration:
•Digital Transformation: Leveraging digital technologies to improve efficiency, enhance
customer experiences, and create new business models.
•Data-Driven Decision Making: Using data analytics to make informed decisions and
gain insights into customer behavior and market trends.
•Automation and AI: Implementing automation and artificial intelligence to streamline
operations and enhance productivity.
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14. Challenges
faced by
Businesses in
India.
Competition
Poor
infrastructure
Infrastructure Finance
Skill
shortages
Technology
Cash flow
management
Intellectual
property
challenges
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15. Objectives of Business: Classification of
Business Objectives
•The Objectives of Business are its drivingforce. These are the factors that keep the business
running.
•Business needs objectives, without objectives the business is like a car without headlights driving
blind.
•Objectives of business are the purpose for which the business is established and performed. We
can call objectives the cornerstone of every business.
•The objectives of a business can be classified into two main categories, which are
1.Economic objectives
2.Social objectives
https://www.toppr.com/guides/business-studies/nature-and-purpose-of-
business/objectives-of-business/
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16. Economic Objectives of Business
•Profit Earning
•Market Share
•Creation of Customers
•Innovation & Utilization of Resources
•Increasing Productivity
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17. Social Objectives of Business
•AccordingtoDaytonHudson“Thebusinessofbusinessisservingsociety,notjust
makingmoney.”
•Businessisoneofthepillarsonwhichthesocietystands.Therefore,itisapartof
thesociety.
•ProvidingGoods&ServicesatReasonablePrices
•EmploymentGeneration
•FairRemunerationtoEmployees
•CommunityService
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18. Reconciliation of Economic and Social Objectives.
•Reconciliationmeansre-establishmentortoresolveconflictthrough
mechanismssuchasnegotiation,mediation,andarbitration.Thisapproach
iscalled‘reconciliation’.
•Businessobjectivesaresomething,whichabusinessorganizationwantsto
achieveoraccomplishoveraspecifiedperiodoftime.
•Asbusinessisconsideredasasocio-economicactivitythereisaneedto
reconcileeconomicandsocialobjectivesofbusiness.
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19. •Creationofemploymentandinnovation:
•Businesscreatesemploymentopportunitiesinvarioussectorslikebanking,
insurance,communicationetc.
•Ontheotherhandinnovationleadstointroductionofnewtechnology
resultinginto-increaseinproductionofgoodsandservices.
•Thisintroductionofnewtechnologymaydecreaseemployment
opportunities.Onthecontrarytechnologycanimproveproductivity,quality
andevensafety.
•Traininganddevelopmentprogrammesshouldbeintroducedtoupgrade
theskillofemployees.
•Combinationofcomputersandtelecommunicationshasmadeitpossibleto
providemanyservicesatlongrange.
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20. •Profitandqualityproductsatreasonableprice:
•Profitisthemainobjectiveofeverybusiness.
•Thefirmcanincreaseprofitbycharginghigherpricefor
commodities.
•Butthecompanycanformulatestrategiessuchasintroducing
innovation,increasingproductivity,minimizingwastagethrough
optimumutilisationofresourcesetc.
•Suchstrategiescanhelpthefirmtoreducepricesoncommodity
therebyincreasingdemandandearningprofitandbringing
harmonybetweeneconomicandsocialobjectives.
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21. •Creationofwealthandcustomersatisfaction:
•Businessrequireswealthforsurvival,growthandexpansion.
Wealthisgeneratedbyearningmoreandmoreprofit.
•Toearnprofitthefirmcanexploitconsumers.
•Butonthecontrarythebusinessshoulddiverttheirwealthfor
achievingsocialobjectivesandprovidingqualityproductsand
reasonablepriceleadingtocustomersatisfaction,thereby
harmonizingeconomicandsocialobjectives.
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22. Reconciling Economic and Social Objectives as a
Businessman
1.Sustainable Practices: Implement eco-friendly and sustainable business practices.
2.Corporate Social Responsibility (CSR): Engage in CSR activities to support community welfare.
3.Employee Welfare: Ensure fair wages, good working conditions, and career development
opportunities.
4.Ethical Sourcing: Source materials and products ethically to avoid exploitation.
5.Community Engagement : Participate in community development and support local businesses.
6.Inclusive Policies: Implement policies that promote diversity and inclusion in the workplace.
7.Transparency: Maintain transparency in business operations and financial reporting.
8.Environmental Initiatives: Invest in green technologies and reduce the environmental footprint.
9.Health and Safety: Prioritize the health and safety of employees and customers.
10.Stakeholder Involvement: Involve stakeholders in decision-making processes for better alignment of
economic and social goals.
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23. Strategic Alternatives in Changing Scenarios:
Restructuring and Turnaround.
•Intoday'sdynamicandever-changingbusinessenvironment,organizationsoftenfacecomplex
challengesthatrequirestrategicalternativestostaycompetitiveandachievelong-termsuccess.
•KeyConsiderationsforRestructuringandTurnaround:
•1.Cleargoalsandobjectives:Establishspecific,measurablegoalsfortherestructuringor
turnaroundeffort.
•2.Communication:Communicatethechangesclearlyandtransparentlytostakeholders,including
employees,customers,suppliers,andinvestors.
•3.Stakeholderengagement:Engagewithstakeholderstounderstandtheirconcernsandbuild
supportforthechanges.
•4.Culturaltransformation:Fosteracultureofcollaboration,innovation,andcontinuous
improvementtodrivelong-termsuccess.
•5.Monitoringandevaluation:Continuouslymonitorprogressandevaluatetheeffectivenessof
therestructuringorturnaroundeffort.
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24. Restructuring:
•Restructuringinvolvestransforminganorganization'soperations,organizational
design,orbusinessmodeltoimproveefficiency,reducecosts,andincrease
competitiveness.Thiscaninvolve:
•1.Costreduction:Eliminatingunnecessaryexpenses,streamliningprocesses,and
reducingheadcounttoimproveprofitability.
•2.Organizationalredesign:Realigningroles,responsibilities,andreportingstructures
tobetteralignwiththecompany'sgoalsandobjectives.
•3.Businessmodeltransformation:Shiftingthecompany'sbusinessmodeltofocuson
newmarkets,products,orservicesthataremoreprofitableorsustainable.
•4.Mergersandacquisitions:Combiningwithothercompaniestogaineconomiesof
scale,expandintonewmarkets,oracquirenewcapabilities.
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25. Turnaround:
•Aturnaroundisastrategicalternativethatinvolvesreversingacompany'sdeclining
performanceorfinancialsituationbyimplementingcorrectiveactionstorestore
profitabilityandstability.Thiscaninvolve:
•1.Financialrestructuring:Reducingdebt,refinancingobligations,andimprovingcash
flowtostabilizethecompany'sfinancialposition.
•2.Operationalimprovements:Implementingcost-savinginitiatives,improvingsupply
chainmanagement,andenhancingoperationalefficiency.
•3.Leadershipchanges:Bringinginnewleadershiporreassigningexistingleadersto
drivechangeandimproveperformance.
•4.Strategicrefocusing:Identifyingandpursuingnewbusinessopportunitiesor
marketsthataremoreprofitableorsustainable.
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26. Key Considerations for Restructuring and
Turnaround:
•1.Cleargoalsandobjectives:Establishspecific,measurablegoalsfortherestructuring
orturnaroundeffort.
•2.Communication:Communicatethechangesclearlyandtransparentlyto
stakeholders,includingemployees,customers,suppliers,andinvestors.
•3.Stakeholderengagement:Engagewithstakeholderstounderstandtheirconcerns
andbuildsupportforthechanges.
•4.Culturaltransformation:Fosteracultureofcollaboration,innovation,andcontinuous
improvementtodrivelong-termsuccess.
•5.Monitoringandevaluation:Continuouslymonitorprogressandevaluatethe
effectivenessoftherestructuringorturnaroundeffort.
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27. Recent Trends in Business
•Growth in e-commerce
•Environmental issues to the fore
•Big data growing in prominence
•Rise in entrepreneurship
•Growing influence of millennials
•Growing organisationalagility
•Emphasis on authenticity
•Balance between employees and artificial intelligence
•Changing employee experience
•Alternative funding sources
https://uk.indeed.com/career-advice/career-development/business-trends
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28. VUCA World and its Impact on Business.
•VUCA is an acronym that stands for Volatility, Uncertainty, Complexity, and Ambiguity.
•It's a concept that originated in the U.S. military to describe the chaotic, rapidly changing
environment of warfare but has since been adopted by businesses and organizations to
represent the unpredictable and dynamic nature of today's global business environment.
•In this context, "Volatility" refers to the speed and magnitude of change, "Uncertainty" to
the lack of predictability in issues and events, "Complexity" to the multitude of forces and
factors that need to be considered, and "Ambiguity" to the lack of clarity about the meaning
of events.
•Navigating through a VUCA environment requires agility, resilience, and strong leadership
skills.
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29. •Many people predict that volatility, uncertainty, complexity, and ambiguity are going to
become more and more prevalent in the business world. To manage teams in the VUCA
age, you should be aware of the changes that this kind of environment can cause.
A VUCA environment can:
➢Destabilize people and make them anxious.
➢Sap their motivation.(Weaken)
➢Thwart their career moves.(stopping)
➢Make constant retraining and reshaping a necessity.
➢Take huge amounts of time and effort to fight.
➢Increase the chances of people making bad decisions.
➢Paralyze decision-making processes.
➢Jeopardize long-term projects, developments and innovations.
➢Overwhelm individuals and organizations.
➢Take its toll on internal culture.
If your industry or organization is affected by this environment, you have to reconsider the
way you and your business operate.
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30. How to Manage in a VUCA World
•Counter Volatility With Vision
•Acceptandembracechangeasaconstant,unpredictablefeatureofyourworking
environment.Don'tresistit.
•Createastrong,compellingstatementofteamobjectivesandvalues,anddevelopa
clear,sharedvisionofthefuture.Makesurethatyousetyourteammembersflexible
goalsthatyoucanamendwhennecessary.Thisallowsthemtonavigateunsettled,
unfamiliarsituations,andreactquicklytochanges.
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31. •Meet Uncertainty With Understanding
•Pausetolistenandlookaround.Thiscanhelpyouunderstandanddevelopnewways
ofthinkingandactinginresponsetoVUCA'selements.
•Makeinvestingin,analyzingandinterpretingbusinessandcompetitiveintelligencea
priority,sothatyoudon'tfallbehind.Stayuptodatewithindustrynews,andlisten
carefullytoyourcustomerstofindoutwhattheywant.
•Reviewandevaluateyourperformance.Considerwhatyoudidwell,whatcameasa
surprise,andwhatyoucoulddodifferentlynexttime.
•Simulateandexperimentwithsituations,sothatyoucanexplorehowtheymightplay
out,andhowyoumightreacttotheminthefuture.Aimtoanticipatepossiblefuture
threatsanddeviselikelyresponses.Gaming,scenarioplanning,crisisplanning,androle
playingareusefultoolsforgeneratingforesightandpreparingyourresponses.
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32. •React to Complexity With Clarity
•Communicateclearlywithyourpeople.Incomplexsituations,clearlyexpressed
communicationshelpthemtounderstandyourteam'sororganization'sdirection.
•Developteamsandpromotecollaboration.VUCAsituationsareoftentoocomplicated
foronepersontohandle.So,buildteamsthatcanworkeffectivelyinafast-paced,
unpredictableenvironment.
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33. •Fight Ambiguity With Agility
•Promoteflexibility,adaptabilityandagility.Planahead,butbuildincontingencytimeandbeprepared
toalteryourplansaseventsunfold.
•Hire,developandpromotepeoplewhothriveinVUCAenvironments.Thesepeoplearelikely
collaborative,comfortablewithambiguityandchange,andhavecomplexthinkingskills.
•Encourageyourpeopletothinkandworkoutsideoftheirusualfunctionalareas,toincreasetheir
knowledgeandexperience.Jobrotationandcrosstrainingcanbeexcellentwaystoimproveteam
agility.
•Leadyourteammembersbutdon'tdictatetoorcontrolthem.Developacollaborativeenvironment,
andworkhardtobuildconsensus.Encouragedebate,dissentandparticipationfromeveryone.
•Embracean"ideasculture."KevinRoberts,ofadvertisingagencySaatchiandSaatchi,coinedthis
alternativeVUCAdefinition:"Vibrant,unreal,crazy,andastounding."Thisdescribesthekindof
energeticculturethatcangiveteamsandorganizationsacreative,agileedgeinuncertaintimes.
•Rewardteammemberswhodemonstratevision,understanding,clarity,andagility.Letyourpeoplesee
whatkindofbehavioryouvaluebyhighlightinginnovationsandcalculatedrisk-takingmoves.
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35. REFERENCES
•https://www.indeed.com/career-advice/career-development/functions-of-businesses
•https://www.linkedin.com/pulse/what-importance-business-seo-specialist-wordpress-developer-
kzskf#:~:text=Economic%20Growth%3A%20Business%20plays%20a,needs%20and%20desires%20
of%20consumers.
•https://www.theofficepass.com/toppings/common-problems-entrepreneurs-face-starting-startup-
india.html
•Kotler, P. (2011). Reinventing Marketing to Manage the Environmental Imperative. Journal of
Marketing, 75(4), 132-135.
•Drucker, P. F. (1954). The Practice of Management. Harper & Row.
•Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free
Press.
•Deloitte. (2021). The Future of Work. Retrieved from Deloitte
•McKinsey & Company. (2020). The Case for Stakeholder Capitalism. Retrieved from McKinsey
•https://www.mindtools.com/asnydwg/managing-in-a-vuca-world
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