Business System

A system may be described as a set of interrelated parts. It is a whole entity consisting of parts, each of which may be called a Sub-System. To understand the functioning of system, one has to analyses and identify the sub-system, understand their inter-relationship and mark how they are integrated. This approach to the study of phenomena is called systems analysis. In studying any system, we have to study it internally by identifying its subsystem and also externally as a part of some larger system. This is the approach of modern science and it is this that we propose to adopt in our study of business organization and management.

Business as a System
System is an entity functioning in social, economic, political and cultural environment of a country or even of the world. The structure of the business system consists of sub-system of industry and commerce. These sub-systems are made up of various forms of enterprises which are engaged in the production and supply of goods & services to the community. Each firm or enterprises is itself a system comprising subsystems like production, marketing, financing, personnel, etc. and of course, each of the functions or systems has its own sub-systems. The behavior of the business system as a whole depends on the functioning of and interrelationship among these sub-systems. The environment of the business system consists of the natural resources, government and law, monetary system, consumers, workers; in short, the whole social, economic and political set-up in which the business system has to operate. Since the working of a firm is influenced by the environmental elements like its competitors, suppliers, government,

consumers, workers, financiers, owners, etc. the responsibilities of a business firm towards all these will also engage our attention.

The Feedback
To engage in any type of business activity, a business unit has to gather various resources from the society. The society, consisting of various sections agrees to provide the required resources on the understanding that the needs of various sections will be met by the business unit. If the needs of various sections of the society are satisfied, these sections continue to supply the desired support and resources. If these needs are not satisfied or partly satisfied, they react by cutting down the supply of resources required to a business unit. This process of increasing or reducing the support to a business unit is response to its performance is known as the process of feedback.

Essentials of a Successful Business

Modern economy is complicated, complex and much elaborated. There are many uncontrollable factors affecting the prospects of any business. The significant factors demanding special attention to make any business successful and flourishing:

1.Objectives
Every business enterprise must have a set of objectives or goals to be achieved, primary or main objectives as well as secondary or subsidiary goals. These objectives points out where we have to go and what is our destination or target. Objectives should be the first consideration in organization planning. They determine the plan of action or the work done.

2.Planning
Modern business activity is based on predetermine plans, policies and programs formulated on the basis of intelligent forecasts about the future events. Planning assures reasonable success in any business. It reduces risk of loss or uncertainty. Of course, plans must be based on reliable adequate and up-to-date information reflecting the past, present, and future conditions.

3.Location, Layout and Size

Favourable location, proper plant layout and appropriate size of the business can assure minimization of costs and maximization of profits in a competitive or free market economy.

4.Financial Resources
Finance is the life-blood of modern business. Adequate short-term funds assure solvency as well as normal growth or expansion. Liberal and cheaper finance must be made available for any business.

5.Efficient Organisation
An organisation is a medium for effective conduct and management of any business. It is defined as the division of work among people whose efforts must be co-ordinated to achieve desired specific objectives. It ensures team work. Mere collection of people at one place or mere going together in one direction is not an organisation. The three essentials of an organisation are: 1. People competent and willing to work together. 2. Common purpose or goal to be achieved through joint efforts of people. 3. Physical facilities and equipment necessary for doing the work.

6.Good Management
Management plays a very important role as a central organizing, planning, controlling and co-ordinating agency or authority for directing effectively any business. Management is

responsible for judicious and conscious as well as orderly arrangement of various resources such as men, money, machines, materials for production and distribution of goods in the home or even in foreign markets.

7.Employee Morale
Modern business demands collective enterprise. If employees are well-treated and offered all the amenities to ensure job satisfaction, and if they develop a sense of belonging to the organisation they will put their heart and soul in there and employee morale will be high.

8.Best Marketing System

Mass production is done scientifically. We also need a scientific or systematic distribution system to sell our goods at a profit in mass markets. All marketing plans and policies today are customer-centered and not productcentered. Consumer frustration and dissatisfaction will indicate failure of our marketing system.

9.Innovation
Fundamental research and applied product development provide innovation. Innovation or changes is the essence of progress. Unprecedented development of science and technology demands continuous business research to keep ourselves up-to-date. Research and development alone can help a business to face successfully keen competition in the market. Creativity is now recognised an important managerial function.

10. Equipment and Machinery

Business is a unique combination of technical, human and managerial resources. Technical resources include machinery, equipment, materials and finance. Human resources include men and women working in enterprise. Managerial resources include executive leadership at all levels to co-ordinate and control all other resources effectively.