9. kanes =nelyNo usiness can afford to f ion_do not g5 expand pre (tile businesses that i Bs ei nd’ Brow ang themselves out of the oy 1 eg., Metal Box, Standard Mane fing etc., which were once fi i companiedoday oe oo because of their inefficient management, failure to satisfy danas ulted in their inability to expand or diversifyOnite such as Reliance, Infosys, Bharti Enterp ises (Aint were’ started with a small capital base today ar important players in their respective industries because of their focus i growth and expansion. TELCO is a good example of diversification, commenced its business as a supplier of locomotives to the Railways, by: now is a major automobile manufacturer (Trucks , buses, cars) and has been rechristened as TATA MOTORS. °,/ '4, OBJECTIVES OF BUSINESS Objectives of business means, the purposes for which business is established and carried on. Proper selection of objectives is essential for the success of 2 business. Objectives serve as the guidelines for the future direction and management of business. According to Urwick, "Profit can no more be the objective of a business than eating is the objective of living". From the above definition we can understand that profits are not the sole aim of business. Though profit-making is an essential objective of business, an enterprise cannot blindly pursue profits without regard to other objectives. If profit maximization is regarded as the sole objective of business, it is likely 0 result in unfair practices such as hoarding, black marketing, etc. The profit-making and social service objectives are not contradictory to each other. They go hand in hand. As stated by Henry Ford, "business is not mere money chasing but is also should aim at servicing the community". Objectives of business may be classified into four broad categories. They are given below :& oF Lo Business Organisation Human Objectives > Business isnot ust a collection of material resources such as land, buildings, plant, machinery and capital It is a community of human beings. Tn fact, the efficiency and success of the business firm depends on the motivation and ability of its employees. The human objectives of a firm are given below. : a) Fair S ts {A business concern must pay its employees ‘ » a ee ene ‘be commensurate with education, skill, experience afd effort and enable employees to enjoy a decent quality of life. Wages should be competitive in comparison to the wages offered ies in the industry. Jt should also provide them benefits such as housing, transport, medical aid, etc,’All these benefits give them a sense of belonging to the business. “ ~ ns / Apart from the statutory requirements as business organisation must ensure safer and healthier ing environment for its employees. Adequate space, lighting, ventilation, provision of safety gear such as helmets, protective clothing, safety goggles etc., in case of hazardous ‘occupations increase employee satisfaction and improves performance, (c) Workers‘ welfare : The business concerns should provide their workers adequate and satisfactory provision for medical aid, educational and other facilities. )The provision of welfare facilities enhances the productivity and profits further. Tata's are pioneers in promoting employee welfare in India, They introduced various labour welfare measures much before government legislation. (d) Development of employees:/Among all the assets, itis the human asset “that has appreciation value/Miany businesses are sponsoring employees higher education to ensure that employees have updated knowledge, E.g. TechMahindra, Cognizant Technology solutions, Patni Computers with BITS, Pilani and aré sponsoring their employees for higher education through e-learning. satisfaction:( Organisations should ensure that employees ate fied with their jobs,/If employces are dissatisfied it would result in lower productivity,/To ensure job satisfaction, businesses should make sure that the job is able to utilize the potential and interests the employee. National Objectives Business also plays an important role in development of a nation. It supplies goods and services required by consumers, provides employment opportunities contributes to the government exchequer by way of taxes to the government et¢- National objectives of a business include: (@) Exporting goods to foreign countries thereby earning valuable foreig® »” exchange. Fore.g: pharmaceutical companies ike Ranbaxy, Dr. Reddy Labs, Cipla, etc., export a major portion of their production, Car hm aes owNature and of BetrosndScopeofBurines 0 ae 4 ae different countries, Sate ate companies ike leg, Wier TTS. HAes like TCS, i- etc., export software sof vices and products and m a et Match <6) tae is carned through exports. (6) Indi Ladigenously Producing import substitution products thereby luable foreign exchange. ‘or 6g, Hepatitis B vaccine which “was aa Teed at a high cost earlier, is now produced by Indian pharmaceutical companies like Shanta Biotech and others. This has substantially reduced the cost of the medicine and many people are able to afford its usage, (©4Providing support to the government in case of national emergencies. During the earthquake in Gujarat, many companies like L&T, Reliance @tc., provided men and material to aid in the reconstruction activities. “Daring the recent tsunami tragedy, many corporates provided _ 5 Support to the government for carrying relief activities by donatin, : } , nile licated affair. Customers ‘demand the ‘at the cheapest prices.) eit ne fashions keep changing and businesses ave adept products and services accordingly. Competition is on a global scale and businesses have to be aware of competitor's actions and stay one step ahead of the competition, They have to be alert in framing strategies to overcome competition and adapt themselves to the changing environment. (Businesses have to_be innovative and adapt themselves to the new technological changes, Those businesses which have adapted to the changing customer needs, new technologies and intense competition have survived and “rownl» Businesses which have not been able to do so have failed. Once famous “brands such as Dyanora, Solidaire, Weston, EC, Bush, TeleVijay ete, in the levision industry are no longer in existence, because ley were not able to products and introduce new products according to the changing needs of the market. The same is the case with Ambassador and Premier Padmini in the Indian Car industry, BPL in Consumer Electronics, Binny, OCM, S.Kumar’s in Textiles and the list goes on. Therefore succeeding in modern business is not (a) “Clear. ‘ormulation of ‘Objectives:(Every usiness must first eta ite its objectives, Cl tification of objecti tives would help the bus to plan is activities in the right manner. The business should decide the products or services it plans to offer, the customer segments to be targeted etc., For example a ¢ a cat manufacturer should decide what type of car it plans to ‘manufacture : (small cars, mid Segment cars or, luxuryNature and Scope of Business : Be The decision with regard to size has to be taken considering the ilable for investment as well as demand for the product or Fore.g., manufacture of small and mid segment cars such as Maruti 800, Swift, Alto, Zen, Tata Indica, ete has to be on a large scale because of the huge market whereas manufacture of luxury cars such as BMW. or. iuse of the limited. ‘Mercedes Benz. has to be on a limited scale because o} oO “fcien marketing ose resins should understand the needs of Consumers and produce products accordingly) It should set up an efficient distribution system which would enstife that goods reach the ‘consumer hands at the right time without any in br iy - reasons for the success of Hindustan Lever*Eimited (HLL) se ~.videspread distribution system which covers both the urban as wel ‘the rural areas ; Focus on Innovation {peter Drucker, the renowned management expert has said, "The business has two basic functions; marketing and ‘innovation Marketing and innovation produce results, all the rests are costs." Businesses have to focus on research.and development and come 01 new products, new services, new uses for existing products, new markets etc if they want to grow. Customers are interested to try out new products and Services and are not interested in buying ime product for a number of years. st © 02 G-pod). In Indi ‘ See a ey EN tanpanec ae caamped a proeuc developmen flex Because of itS focus on Fesearch and innovation has developed a” banking software product called Flexcube which has customers in more than 85 countries across the globe. Recognising its potential, Oracle Corporation, US has acquired 40 per cent stake in the company and is planning to acquire majority stake. Development of human potential { Sica cy organization depends oa great extent on the quality ofits Workforce, As we live in.a knowledge economy, businesses are becoming knowledge intensive.) Therefore ~ developing skills and imparting of knowledge to the workforce through. regular training and development is essential, /That is why many companies have made training mandatory for their employees.\For e.g. “Infosys, lias Set up a Leadership Institute where exceptional performers {are trained on leadership skills to become future leaders, a Naeiee monitoring of environment: Since we are living in an age of rapid change, businesses should continuously monitor the environment to understand changing customer needs, emerging competition, technological developments, changes in government rules|, €ams profits by selling the output to the society. ‘Business and society "enjoy a symbiotic relationship. Business has to protect and promots society's welfare if it wishes to survive and prosper. A prosperous _ Society is a necessary condition for profitable business. (c) Availability of resources: Modern businesses have huge amount of resources at their disposal. The profits earned by some of the multinational companies are more than the national income of certain countries, With such large resources, businesses are in a better position to further society's interests. (@) Reputation: Businesses spend huge amount of resources in brand building and strengthening their image. A socially responsible company enjoys a good reputation in the society. It results in increased sales, _ Profitability, attraction of talent and sustained growth. (e) Society's expectations: Society's expectations from business firms have ‘undergone a sea change over the years. In the early days, businesses were viewed only as provider of goods and services. Bi today, society ‘expects business to be a responsible citizen and ibute towards social welfare. ’ oO To ensure business growth: A healthy and prosperous society enjoys | higher purchasing power. The higher purchasing power translates into higher demand for products and services. This increased demand translates to higher sales and profit growth for businesses. (g) To avoid government regulation : If businesses are exploitative and do not take society's interests into account, the government has to step in. eared lay down restrictive rules and regulations. Such restrictive ‘would hinder freedom and growth of businesses. In order to avoid government regulation, businesses have to be socially responsive. (h) To solve problems created: Problems such as environmental pollutios, contamination of water reso i by been caused by busi uurces, depletion of the ozone layer havé Som il inesses. These have resulted in poor health of t Therefore busi Placed a question mark on the survival of human species a have been their creation, lake cares tr onive tha roblens Wid ; not led to such poblong ey bee o ensure that their activities & Arguments against social :SS ORGANISATION 15 P Ry re Ricco Pere ata here in a broader sense. It 's em| i fe@ernmelits, and finaly the society atlarpes are ‘What is Ethical for a Businessman? It is simply stated that a businessman should strictly adhe ; wre to the coe at ueness ethics. But there is no PRES list to specify those which are ethical and which are unethical? This question poses a serious problem to the businessman acting in a particular business situation. When there are specific legal principles, no complication arise. He should strictly follow the laws though it is unethical in his opinion. He should not try to violate the legal provisions. If he feels that the law is unfair or unjust, he should seek to change them by employing democratic devices. He should gather public opinion against such unfair legislation and persuade the Government to change or amend it. But in the absence of well-defined law, the businessman should face a problem in deciding what is ethical or unethical because of contradictory moral values. His act may be ethical and justifiable in a given situation But it may do harm to a few. Those affected by his acts will consider them as unethical. Thus, drawing a line between right and wrong, black and white ie. ethical and unethical practices is not an easy matter. Due to this ambiguity, decisions with ethical overturns have become more complex. Arriving at a ‘compromising solution suitable to all conflicting interests is not so easy to a practical manager. Hence, there isa tendency to over simplify the matters of ethical problems in business organisations. Why Business Ethics? Though it cannot be clearly decided as to what is ethical and unethical that businessman need not follow the ethical standards. Ethical considerations in business are highly important to the managers as individuals. The need for ethics in business had been a matter of great concern even in the ancient times. The businessmen must render justice to various parties - the suppliers and the customers. They should be just and honest. Truthfulness should be the basic theme of their life. They maintain a long chain of honest tradition. This being the case the relevance of ethical code and its importance in business world is all the more greater today in the context of growing industrialisation and influence of the business on the society. Today business has come to stay as dominant socio-economic political institution next only to Government. Hence, ethical questions have become a primary concern of business managers. Besides, there are also a large number of factors, which necessitate the strict adherence of ethical behaviour by the business community. 1 Gs san india society and its values tend to become those