A project report on Business. This report will help you to learn about:- 1. Meaning of Business 2. Earlier Objectives of Business 3. Changing Concept and Objectives 4. Professionalisation 5. Ethics 6. Social Responsibility.
Contents:
- Project Report on the Meaning of Business
- Project Report on the Earlier Objectives of Business
- Project Report on the Changing Concept and Objectives of Business
- Project Report on the Professionalisation of Business
- Project Report on the Ethics of Business
- Project Report on the Social Responsibility of Business
Project Report # 1. Meaning of Business:
Business may be defined as the organized efforts by certain persons, (entrepreneurs, firms or enterprises) to supply the consumers with goods and services.
Examples of goods:
T.V., Refrigerators, electric goods, cooking utensils, cloth etc.
Examples of services:
Repair shops for the goods sold, hospitals, etc.
Business, in fact, is a system created to satisfy the needs and desires of the people or society. Persons engaged in business either produce (manufacture) or distribute (trading) the goods or render services to the consumers of their goods.
Business, which is a complex field of commerce and industry:
(1) Creates employment opportunities,
(2) Contributes to the economic growth of the country,
(3) Improves standard of living.
To be prosperous, society needs business and businessmen.
Business involves the following activities:
(1) Manpower,
(2) Financing,
(3) Buying,
(4) Selling, and
(5) Earning profit etc.
Broadly, business embraces three terms namely — Industry, Commerce, Profit. Business is a commercial activity to make profit.
Project Report # 2. Earlier Objectives of Business:
In the past, economic theory made a fundamental assumption that profit maximisation was the basic objective of every firm or business enterprise. Profit is the excess of income over expense.
No doubt, profit is the:
(i) Main incentive,
(ii) Motivator,
(iii) Strong sustainer,
(iv) Judicious allocator of resources,
(v) Objective indicator of productivity, and
(vi) And hence a solid base for growth.
Profit enables Business to realise his other objectives too, such as:
(i) Expansion of business,
(ii) Buying modern machinery,
(iii) Making quality products,
(iv) Better service to society,
(v) Market leadership,
(vi) Employee satisfaction,
(vii) Better working conditions and above all, and
(viii) Joy of creation.
Project Report # 3. Changing Concept and Objectives of Business:
In the past profit maximization was the basic objective of any business. The modern out-look, however, is different. For many business organisations, now, profit maximization in the short run is not the primary objective. For them profit is only secondary. The old concept of business, confining it merely to commerce and private profit has undergone a radical change. Today the business is regarded as a social institution.
(1) It should actually work as a social institution, performing a social mission and having a broad influence on the way people live and work together.
(2) The direction of business should be towards public welfare. The public should get quality products and services at most reasonable economic prices. There is a growing recognition that the business should pay due attention to the long-term welfare of society.
(3) Modern thinking expects the business to take on to itself the responsibility for serving or safeguarding societal interests as one of its important objectives.
(4) Large companies, top executives and even major shareholders today have the opinion that:
(a) Profit is not the primary objective of a firm.
(b) The objective of a firm should not be profit maximization, but it should be sales maximization, subject to a minimum profit constraint.
(c) The business companies may strive to gain leadership in market share, sales volume, fixed assets, employment etc., even sacrificing profit maximization.
(5) With the general change in outlook of large business houses, the changed business objectives today are:
(a) The reduction in the prices to be charged from the customers.
(b) The extension, development and improvement of the company’s business and the building up of its financial independence.
(c) The payment of fair and regular dividends to the shareholders.
(d) The payment of fair wages under the best possible conditions to the workers.
(e) To enhance labour welfare.
(f) To enhance customer service and goodwill.
(g) To create safe and good working conditions in the factory.
(h) To help in developing the industry (i.e., automobile industry) of which a firm (i.e., Escorts Tractors) is a member.
(i) To contribute to national goals.
(6) Lastly, it is worth mentioning that a reasonable level of profit is not only compatible with the concept of a socially responsible business but also necessary for the discharge of social obligations and responsibility.
Profit can be primary but not the ultimate object of a responsible company. In a responsible company, profits will continue to be the criterion of financial health—as blood is the life of man, so are the profits for the life of an industry.
Just as a man must maintain life before he can pursue for the objectives of his life, similarly, profits are necessary for the life and health of any business organization.
Profit should work as seed money for:
(i) Exploring more products and markets.
(ii) More plants (diversification into new areas).
(iii) More dividends.
(iv) More tax payments.
(v) Creating more jobs.
(vi) More opportunities.
(vii) Cutting down production costs and increasing productivity.
(viii) Promoting well-being of all—rich and poor, privileged and less privileged, consumers and producers, investors and non-investors etc.
Project Report # 4. Professionalisation of Business:
A Professional is One:
(1) Who possesses systematic knowledge and skill to perform certain responsible functions with authority, and
(2) Who is bound by certain ethics in the use of his knowledge and skill.
A professional has to have autonomy. He cannot be controlled, supervised or directed by the client and he is not subject to political or ideological control. But he sees himself as affected with the public interest. He is public in the sense that the welfare of his client sets limits to his deeds and words.
A professional has enormous responsibilities. He shall not use his knowledge, skill and authority unscrupulously. He shall not knowingly do harm to his customers. He is socially bound by the ethics of his profession.
The growth of management education and training has contributed to the growing professionalisation of management.
Professionalisation of Business implies that the business should be managed by persons:
(1) Who have formally acquired the specialised knowledge and skill for management.
(2) Who have authority and freedom to take the right decision.
(3) Who have no ideological bias in the discharge of the functions.
(4) Whose decisions and actions are guided by certain ethical considerations.
Professionalisation:
(1) Contributes to the growing social orientations of business.
(2) Makes business more efficient, dynamic and socially responsible.
Project Report # 5. Ethics of Business:
Business ethics imply a system of moral principles and rules of conduct applied to business so that the business should be conducted according to certain self-recognised moral standards.
This is with a view that the interests of society and of the business sector itself should not suffer. The ethics of business are the same as those which every individual in society and society as a whole should abide by.
Individuals do not acquire exemption from ordinary rules of personal behaviour because of their work or job. Nor, do they cease to be human beings when appointed General Manager or President of a business organization etc. An individual learns moral values from his family and moral education from his school.
However, certain norms and principles of conduct have been commonly advocated as constituting business ethics:
(1) Do not cheat customers by selling them defective, substandard and poor quality products.
(2) Avoid hoarding, black-marketing or profiteering.
(3) Have a healthy competition with other firms producing or distributing the same products.
(4) Your product advertising should not be false. Labeling and packaging should be accurate (as regards its weight, composition etc.)
(5) The business records should be accurate, kept current and made available to all authorised persons.
(6) Taxes and other obligations should be discharged promptly.
(7) Ensure payment of fair wages and fair treatment to employees.
(8) Avoid giving bribe to administrators, politicians, purchase personnel’s or engineers (of the firm intending to buy your products) etc.
Project Report # 6. Social Responsibility of Business:
The social responsibility of business means the responsibility of business (firms) towards customers, workers, shareholders, Government and the community.
Business Depends on Society for:
(1) Its inputs like, money, men and skills,
(2) Markets where products can be sold to customers (buyers).
A Business concern is so much dependent on society that if people loose interest in its product, the business fails. Thus business depends on society for its existence, sustenance and encouragement. Every decision the businessman takes and every action he does, has social implications.
Be it deciding on diversification, expansion, opening of a new branch, recruitment of new employees, or replacing men by machines (robots) society is always affected in one way or the other. Whether the issue is significant or not, the businessman should keep his social obligation in mind before contemplating any action. Being so much dependent on society, the business has definite responsibility towards society.
(i) Responsibility towards Shareholders:
The responsibility of a business company to its shareholders, who are the owners of the concern, is indeed a primary one. The fact that the shareholders have taken great risk in making investment in the business should be adequately recognised. The business should be able to safeguard the capital of the shareholders and to provide a reasonable dividend to them.
Shareholders Also Expect That:
(i) The business should be managed profitably.
(ii) Fair and regular return on capital employed should be ensured.
(iii) Capital appreciation should be guaranteed.
(iv) The financial position of the business should be consolidated so that it can withstand fluctuating fortunes (so common) in business.
(v) The Company should build its image and reputation in the market.
In return, the shareholders should not only extend their whole-hearted co-operation and support in the positive efforts of the company, but also guide and control properly its policies and activities.
At the same time, they should appreciate the responsibility of the business to other sections of society i.e.—consumers, employees, and the community.
(ii) Responsibility towards Consumers/Customers:
If any business cannot create customers, it fails. The customer is the foundation of a business. He keeps the business in existence. Therefore, the business has highest responsibility towards the consumers of its products.
Consumer satisfaction should be the foremost goal of any business enterprise. Unluckily it is not so in India. Here, the consumer is only a vehicle conveniently used by businessmen for driving towards the goal of profit maximization.
Today, you buy a product, tomorrow it stops working completely or at-least stops functioning as efficiently as claimed in its advertisement. Now, government has started interfering to protect the interests of consumers.
Consumer Grievance Cells have been formulated for the said purposes. Moreover, Consumers, themselves, are also forming into a movement popularly called consumerism to protect their interests against business malpractices.
In General, the Responsibility of Business Towards Consumers Includes the Following Aspects:
(i) To supply goods at reasonable price.
(ii) To provide prompt after-sales service.
(iii) To avoid creation of artificial scarcities.
(iv) Not to give a false advertisement about the product to enhance its sales.
(v) Producing and distributing only quality goods worth the price charged from the customers.
(vi) Providing the same weight, composition etc. of the product as marked on the (product) package (or label).
(vii) Provide full information to the customer as regards the care and handling/use of the product.
(viii) To improve the product distribution system to avoid black marketing or profiteering by unwanted middlemen.
(ix) To hear and redress genuine grievances of the customers.
(x) To understand customers needs and to satisfy them by either improving upon the product or by other means.
(iii) Responsibility towards Employees:
Dissatisfied employees means:
(i) Low production and productivity.
(ii) Poor quality of products or defective products.
(iii) Careless handling of production machinery.
(iv) Higher-labour turn-over rate.
(v) Loss of interest of sales personnel to sell the product.
(vi) Untimely payments to vendors, etc.
The result is the death of the business enterprise.
All those businessmen who want to see their business flourishing and progressing must be aware of their responsibilities towards the employees because the success of any business house depends to a large extent on the morale of the employees, their whole-hearted cooperation and the employer-employee relations.
(i) Fair selection, training and promotion of employees.
(ii) Fair wages and adequate incentives to them.
(iii) Safe and comfortable working conditions.
(iv) Worker’s participation in management.
(v) Labour welfare schemes.
(vi) Proper recognition, appreciation and encouragement of special skills and capabilities of the workers.
(vii) The installation of an efficient grievance handling system.
(iv) Responsibility towards Community:
Community means persons residing in and around that area where the factory is located and also the society at large.
The responsibilities of a business enterprise thus include:
(i) To prevent environmental pollution and to preserve the ecological balance.
(ii) Assisting in overall development of the locality.
(iii) Giving jobs to the local people.
(iv) Promotion of small-scale and ancillary industries.
(v) Contribute to causes such as promotion of education and literacy in that area.
(vi) To conserve scarce local resources and to develop alternatives.
(v) Responsibility towards Government:
It covers the following aspects:
(i) Complying with all government regulations and legal requirements.
(ii) Paying taxes honestly; deducting income-tax from the salaries of the employees and depositing the same with the government.
(iii) Executing government contracts.
(iv) Making services of executives available for government.
(v) Working as a willing partner with government in pursuit of public welfare.
The Indian Situation:
As far as the responsibility of business towards consumers, employees, government, community etc. is concerned, the Indian Business sector (both public and private sector) presents a mixed picture.
Whereas on the side of:
i. Production.
ii. Productivity.
iii. Efficiency.
iv. Growth,
The Indian industry (especially private sector) has on the whole, done well, however, its record has often been poor when judged by the size of the:
a. Black market.
b. Volume of black money.
c. General corruption in our economic life etc.
Hoarding and black marketing mercilessly gouge the unfortunate consumer. The producer firm should make sure that the product reaches in the hands of consumer at reasonable price and in time so that no shortage or scarcity of the same is felt by the public. The Indian producers have yet to go a long-way in bringing the quality of their products at par with foreign firms.
A foreign-made jacket, in winter, is more warmer and cheaper as compared to its Indian counterpart. A foreign-made refrigerator, washing machine, car, TV, VCR, camera is still a craze for Indian public, Why? Once a product fails working or does not function properly, the poor consumer has to move from door-to-door to get it replaced or repaired. Many times spare parts are not available or they are very costly, more costlier than the foreign-made spare parts.
Comparing the performance of public sector with private sector, the huge losses incurred by some Indian public sectors are not the result of any charity given to society; they are the inevitable outcome of inefficiency, irresponsibility and mismanagement at various levels. The failure of the public sector in discharging its primary duties has made the plight of the common man worse than it would have been, because it resulted in shortages, higher prices and more taxes.
Companies in the public sector which account for about 1% of the total investment in the corporate sector must reckon with the social costs and social benefits arising out of any given investment. This should be equally applicable to private sector.
The accountability of the public sector to the people through Parliament must find its parallel in the private sector in the form of social accountability, at least, to the extent of informing the public about the extent and manner in which the private sector has or has not been able to discharge its social obligations in the course of its own economic operations.
The Indian business houses have not been able to become fully responsible to society, otherwise:
(1) Why they are raided by Income-tax or other Government Authorities?
(2) Why there is unrest amongst the employees and their trade unions?
(3) Why the customers prefer to buy foreign products from clothes to cars?
(4) Why the industrial towns, rivers and lakes are getting polluted more and more?
It is not that the business houses have done nothing.
There is a brighter-side of the picture also, as explained here under:
(1) A number of leading companies in India have set up hundreds of institutions of public service like schools, engineering and medical colleges, management institutes, dispensaries, hospitals, research institutes, libraries, dharamshalas, institutes for deaf, dumb and blind, museums etc.
(2) Many other enterprises arrange health and medical facilities to the people of surrounding areas. Eye camps and blood donation camps are becoming very common.
(3) Many businessmen have helped the victims of floods, droughts, earthquakes, epidemics and other natural calamities by way of money, food, clothes and medicines.
It is worth-mentioning here that high standards of behaviour and the discharge of social obligations should not only be demanded from the business enterprises, but also from all economic groups in the country whose action have an impact on the public weal (welfare, prosperity etc.).
This applies in particular to trade unions, who in recent years have acquired enormous economic powers. If trade unions recognise their social obligations, the millions of man-days of production shall not be lost every year due to labour unrest and strikes. The participation of workers in management may prove to be a remedy for many a cause of industrial unrest.