Functions Of A Modern Business

What is business?

Business is an economic activity. It relates to all those activities which are related to the production and distribution of goods and services for earning of profit. Business also includes those activities which indirectly help in production and exchange of goods such as transport, insurance, banking, warehousing etc.

Now-a-days, the values of the society t changed. People expect more from the business than merely earning of profits. The society expects now from the business that it should play on active role in reducing the ills of society such as environment pollution, unemployment’s, education backwardness, lack of medical facilities. Profit making, thus, should not be the sole objective of business. Its objective should also beta serve the society Functions of a modern business The modern business is subject to fast changes It is increasing in size, number and form with the passage of time. The main functions performed by a modern business! in brief, are as under (1) Production funclion The main function of a business is to produce goods and services that satisfy human wants and sell them at profit to the consumers the process of raising crops, removing materials from mines. Forests, manufacturing raw material into semi finished or finished goods to satisfy the requirements of consumers etc. fall under production. In the present age of mass production and specialization, only that business will survive which makes the best use of resources (in puts) produces quality goods and sells them at competitive prices in the market. (2) Financial function Another important function of a business is to secure finance to operate it a continuous supply of funds is required to run the business. Basically, there are two sources of rising funds (1) Owner’s capital (2) borrowed funds. A business can carry on its operations with its own resources or can avail of both the sources for meeting its working and fixed capita’ requirements Nowadays most of the big business is tamed on by joint stock companies and they raise their capita mostly through the issue of shares. (3) Management functions In modern business of today, human resource management is considered very essential. Management is the process of getting things done through others. Management is principally the task of planning, coordinating, motivating and controlling the efforts of others towards a specific objective. (4) Innovation functions In the modern days of competition, innovation is the life blood of business. The innovative function is based on two elements (1) Individual should be encouraged to create new idea and (ii) communicate free and criticize products and goods An organization needs new ideas to keep it healthy, stable and dynamic (5) Organizational function A modern business should have a sound organizational structure Sound organization help, in the elimination of duplicate activities in the business, efficient use of spec talent, economic use of equipments, economies in transportation and distribution, encourages product growth and profit of the business. (6) Controlling function The purpose of controlling function is to examine the past and present activities of business. l the manager finds, that the performance in his area of control is falling from è standard, he takes quic1 action to correct it. (7) Motivating function In order to improve the overall performance in a business, it is essential that the efficiency of the employees should be increased. Motivation is an important factor which encourages employees to give their best performance and help in reaching tile business goals. (8) Risk taking functions Every business faces risks and uncertainties. Risk is caused by some unfavorable and undesirable events. Some risks are such that they can be reduced but cannot all be avoided. However, some risks can be shared W others through insurance. A business manager, therefore, must determine the risks a business faces He should then find out the ways to guard against them. (9) Marketing functions Marketing is a very important business function of 20th century. Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers. Marketing functions include buying and selling of goods, transportation and storage, risk taking) research, product designing etc. (10) Social responsibility function In the late 1980’s it was discovered that the nations are running out of clean, air and water in urban areas due to industrial expansion. U is now increasingly realized that the business should share the social costs of pollution. The business should play an active role in reducing ills of the society. Forces inducing businessmen to be socially responsible The main forces which are inducing businessmen to be socially responsible are as follows: (a) The pressure of public opinion (b) Force of trade unions in industry. (c) The growing public opinion about maintenance of the quality of life and prevention of pollution. (d) The threat of public regulations and fear of nationalization of business.