Small Business Definition - Business Environment, Ideology, Features, Characteristics

Business [Small Business Definition] refers to those activities which are done by man to get profit. These activities may be related to production, construction, mining and buying and selling of goods. With the passage of time the purpose and meaning of business is changing. So the following are the two business ideologies.

Small Business Definition

1. Old Business Ideology

2. Modern Business Ideology

Old Idea of ​​Business - According to this ideology, business refers to those organized efforts of enterprises in which arrangements are made to supply goods to the customers with the aim of earning profit. Making profit was the main objective of the business. Due to lack of competition, no attention was paid to the accountability of employees, society and customers. Various scholars have given the following definitions in this regard.

Business definition, small business definition, business environment
Small Business Definition

  • According to Thomas, “Business is a profession whose main objective is to earn profit and in which money loss is the main risk.
  • Business is the human process of converting the means of production into goods and services, in order to make deals that benefit the organization - Boofa and Plech
  • The process of collecting and appropriating the means of production by proper control in order to obtain profit is included under ‘business’.” - Renecki and Shawl
  • We use the word business for those social organizations whose economic functions are organized, these social organizations conduct production, marketing and financial activities to provide us with goods and services.”-Dalton E. geckfarled
  • Businesses are those economic and commercial activities conducted on profit, which provide the goods and services necessary for the standard of living of the nation” – Boone and Kuze
  • Business is such a corporate body which satisfies the needs of the consumers, so that it can earn profit, get dividend on the amount appropriated, pay taxes, provide employment to persons Sign and increase the social and economic development of the nation - Julian Scott

Conclusion- On the basis of the definitions given by various scholars, it is clear that all the human activities related to production, distribution and exchange of goods and services to meet the needs of consumers and society are called 'business'. In other words, business is a social organization that derives profit from the production and exchange of valuable goods and services and whose main objective is to satisfy the needs of the society.

2. Modern Ideology of Business - According to the modern ideology, “In business, not only the interests of the businessman, but also the interests of the employees, country, nation and consumers etc. are kept in mind. Therefore, according to the modern ideology, the economic function of business is to create market and find future consumers. That's why consumers are said to be the foundation of business.

In the words of Peter F. Drakkar, “The purpose of business is to entertain the consumers and expand the market share.

F.C. Hooper, “Business refers to the whole complex sphere of commerce and industry. It includes basic, ancillary industries, banking, insurance, distribution and transport etc.

In short, the modern concept of business takes into account all the sections of the society, employees, consumers and suppliers etc.

Modern Features of Business: The Modern features of business are as follows:-

  1. Business is an instrument of social change - Business deeply influences social behavior, progress and goals. It is possible to bring revolution and change in social life through business. Creative changes can be brought about by business in various aspects like education, cultural and physical development, standard of living, ideology, way of life, livelihood earning, expectations and aspirations etc. Thus, business is an important means of establishing a new economic order in the society.
  2. Customer Creation and Satisfaction - In the modern era, the same business establishment can be successful, which provides maximum satisfaction to the consumers with its manufactured goods or services. Truly, today's entire business is customer-centric and the customer is the king of business. The customer determines the products, varieties, etc. of the business. Modern management thinker Peter Zarker writes that the customer is the cornerstone of business and it keeps it alive. A customer can be created only by providing satisfaction to the customer. In true sense, a customer buys not only the commodity but also the satisfaction.
  3. Knowledge is a special resource of business - Economics has considered five means of production - land, labour, capital, organization and courage, but according to Ikar, the most important tool of modern business is - 'human'. In the modern era, all types of knowledge – technical, managerial, economic, social, legal, psychological etc. are necessary for the efficient operation of business. It is through knowledge that the businessman creates economic values ​​and utilities of the society. It has also been said that only knowledge performs the business, so the acquisition and development of this knowledge resource has become necessary for the business.
  4. 'Marketing' and 'Innovation' are the adventures of modern business (Marketing and Innovation are Entrepreneurial Functions of Modern Business). 'Marketing' and 'Innovation'. According to Ikar, these are the basic functions of business. Through marketing, the business provides the customer with the goods that the customer wants. Business can be separated from other human organizations like church, army, school, state only because of marketing function. Peter Rooker writes that marketing is not only a wider function than sales, it is not even a specific function of business, but it includes the whole business itself. It looks at the business from the point of view of its end result i.e. the customer.
  5. Creation of Utility - Business units are born to create utility, they create utility in material resources through human efforts. These raw materials and semi-finished goods, such as mineral substances, trees, plants, water, chemical substances, etc., with the help of human resources, manufacture useful goods for the society. They give form, space, ownership and time utility to physical resources.
  6. Dynamic Process - Business unit is a dynamic process as economic, social, political, cultural and organizational changes affect the activities of business organizations.
  7. Different from other organizations - Business units are different from other organizations, because business organizations are established to achieve business objectives while other organizations are established to achieve non-business objectives.
  8. Rising trend of combinations - There is an increasing trend of combinations in modern business units. Many small business enterprises are joining together to form a big organization or amalgamating into a big organization. This is happening due to increased competition and technical reasons. Small organizations cannot survive in the face of increasing competition and rapid technological changes.
  9. Social Responsibility - In the present era, the concept of social responsibility of business is being widely publicized. The ideology of social responsibility is expecting business organizations to socially evaluate all their business actions and decisions. Therefore, before each of their decisions and actions, they have to see the effects of them on the society.

Managerial Characteristics - Following are some of the main characteristics from managerial point of view in modern business units.

  • (i) Adventurers, owners and managers play an important role in the establishment and operation of modern business units.
  • (ii) In modern business units, young people with managerial and technical knowledge, non-resident Indians etc. are coming forward.
  • (iii) Managers are being replaced by professional managers in modern business units.
  • (iv) Skilled and normal employees are appointed in all the business units as per the requirement. Some functional departments are created in all the business units to conduct the functions efficiently. These usually have major departments like production, marketing, accounting, research and development etc.

Business Environment Definition

  • What do you understand by Business environment'? Clearly explain the nature of Business Environment - Question 1
  • What is meant by Business Environment'? Discuss the nature of relationship between business and environment?
  • Define Business Environment. Discuss its main characteristics?

Meaning and Definitions of Business Environment:- 

Before explaining the meaning of business environment it is necessary to understand the meaning of the word environment.

In general, the environment is a widespread phenomenon. It is a set of components that exist outside a business entity and over which that entity has no control. Some scholars have defined the environment are as follows:-

According to William Guttuck and Inquiry, “The environment includes those factors outside the firm that create opportunities and aspirations for the firm. Among these, socio-economic, pre-industrial and political conditions are prominent.

According to Rawins, “The environment is made up of those institutions or forces which affect the performance of an organization but have little control over them.

In conclusion, it can be said that “Environment is those forces, conditions and factors outside an organization which affect the efficiency and success of that organization and over which any of the organization’s. There was no control.' Business environment is a specific part of the overall environment, which affects the success and efficiency of a business organization.

Some of the major definitions of business environment can be given as follows:

According to Reinecki and Schuel, “The environment of a business includes all external factors or things around which it is surrounded and by which it can be directly or indirectly affected”.

According to Keeler, “Business environment is the sum total of all those outside business firms and industries that affect their organization and operations.

According to Arthur M. Weimar, “Business environment includes the environment or set of economic, social, political and institutional conditions under which business activities are conducted.

In conclusion, it can be said that business environment is the external dynamic conditions, conditions and factors of any business organization, which affect the efficiency and success of that organization and over which that organization has no control. As a result, that organization has to mold itself according to that environment and by finding suitable opportunities in it, it has to fulfill its goals.

Business Environment Characteristics

Characteristics of business environment:- Nature of interactions between business environment.

A special relationship is found between business and environment. The nature of the interrelationship between them can be explained as follows:

1. Dynamic Environment and Dynamic Components- At present every business organization has a dynamic environment. That organization has to work in its own environment. This dynamic environment of the organization is made up of many components. These components are economic, social, political, geographical, religious, cultural, technological, etc. in nature. These components are also constantly changing or dynamic.

2. Component interdependence – A key feature of the components of a dynamic business environment is that not all of these components are self-sustaining. In fact, all these components interact with each other and are also dependent. Economic component, social component, political component, technological component, religious component, social component, and so on, all other factors influence each other and are also interdependent.

3. Geographical Boundary- Every business entity has a geographical boundary. This limit can be wide or narrow according to the scope of each organization.

4. Responsible for all the components - Business has to be accountable to all the components of the environment such as employers, suppliers, competing organizations, consumers, citizens, government, professional organizations etc. The interests of all these sections have to be taken care of in business decisions and actions.

5. Boundaries- Environment defines the boundaries, controlling factors, pressures and restrictions of doing business within which the firm has to work.

6. Internal and external environment- Every organization has its own internal and external environment. Business organization usually controls its internal environment. Therefore, it does not affect him much, but the organization has no control over the external environment. So he has to mold himself according to the external environment.

7. Fulfillment of the requirements of the environment - Every business organization has to satisfy the needs and requirements of its environment (ie society and consumer). The organization which is not able to fulfill them, gradually the existence of such institution ceases to exist.

8. Creation of utility by transformation – Whatever resources the business receives from its environment, it returns them to the environment itself. In the process of doing so, he transforms those tools. As a result of this process utility is created in those resources. In this process, business returns to its environment by creating utility related to form, environment, place, ownership in resources.

9. Wide market - The business environment is also the market for the business. Each organization provides its own items to this environment. The firm gets its income from the environment itself.

10. Resources and sources of information- Every firm obtains necessary resources like raw material, labour, capital, technology, machines etc. from the environment. Data and information are also obtained from the environment. By using these resources and information etc., every organization fulfills its business functions by producing goods or services.

11. Constant Contact- Every organization has to maintain constant contact with its environment. For this, every organization has to make a two-way communication system. Through this, the organization gets information about the changes taking place in the environment and the organization is able to provide information about the latest products and services to the environment. The effectiveness and success of this contact thread can lead to longevity of the organization.

12. Challenges and Barriers - Every business organization has to face many challenges, dangers and pressures in functioning in its environment and meeting its requirements. The organization has to find opportunities for profit in the midst of these obstacles. The organization which is unable to take this risk, it perishes.

13. Exchange of information- Every organization also exchanges information with its external environment. First of all, it studies its external environment and creates information in relation to its economic, technological, political-cultural etc. On the basis of this information, some inferences are also made regarding these components. On the basis of these information, managers do planning, decision making, control of production, sales, finance etc. It is on the basis of this information that every organization solves the problem of uncertainty and complexity of its external environment.

Every organization creates information not only for itself, but it also makes it available to its external environment. Some of the information has to be provided by the business entity to the external environment due to legal requirement. Sometimes organizations also voluntarily provide information to the external environment.

14. Business organizations have to change according to the change - Every business organization is a product of its environment. Whatever form it emerges, it is the result of its environment. In fact, the atmosphere is the combined magnitude of the effects of many factors. These components themselves are variable and dynamic. Every business organization has to change its policies and activities according to the factors of the environment to maintain its stable existence. In general, there are changes in consumer interest, fashion, lifestyle, production and distribution techniques, government rules and policies, social values, competition situation, state of the economy, etc. As a result, every business organization has to make changes according to its policies and activities. In short, the business has to adapt to the changes.

15. Business also affects the environment- Many changes occur in the environment due to business practices, products, goals, plans, work philosophy and leadership styles. In the society, the business class affects employment, investment, sources of income, economic development, education, consumption level, creative thinking, courageous tendencies, entrepreneurship etc. But in general it is difficult to measure individually the impacts of each business organization on its environment. Although collectively the effects of business can be measured. Effects of business in the form of economic progress, new values, higher standard of living, prosperity, industrial culture, changed interests of customers, new fashions, new products, changed lifestyles, new social values ​​etc. in the whole economy and society. A clear impression can be seen. Thus it can be said that business and environment are the cause and result of each other i.e. both are the creators and creators of each other.

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