Business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals in order to generate revenue. In general, business is all about profit and loss but there are various dimensions involved in any kind of business. These disciplines may be defined as economics, human resource management, accounting, finance and operations.
I ventured into a construction business three years ago. I formed a small scale construction company. The main objective of this company was to conduct its operations by providing valuable services to its clients in the field of residential area. I was well aware of the importance of the various dimensions of a well-grounded strategy. The company started its operation and soon yielded satisfactory income. However, I also made such strategic errors that somehow undermined the growth of the company. For example, I tried to keep the workforce at its bare minimum and this very step resulted in the loss. This taught me a lesson that in order for a business to flourish, there is always the workforce that determines its success or failure. When a single employee is overburdened with multi-tasks, his efforts are more likely to end as an exercise in futility. This experience instilled in the sense of having an organized and competent workforce which would further the objectives and aims of my business. The fact of the matter is, however small the business, the profits and set targets cannot be achieved alone or by a handful people. The bottom line is that the workforce is always the jewel of any business.
The business environment of my company was encouraging and welcoming to the deserving and hard-working employees. The ones who brought profit to the company were given extra incentives from time to time. With the recession at its full-blown state affecting the real estate and construction, I was compelled not to expand my business.
I always tried to manage cultural diversity of the company because due to the presence of people from different cultural backgrounds, there is a chance of cultural clashes between the people of different cultures. There is also a chance that majority group members may create obstacles for minority group member to take full participation. If such clashes cannot be handled and managed by the leaders then the organization may suffer ineffectiveness, less productivity and absenteeism of the employees (Adler, 1991).
I always encourage that there should be no communication gap in our company because if there is communication gap between a culturally diverse team then there is a chance that a homogenous group may outperform this culturally diverse group. For this purpose we have conducted extensive trainings which helped us to overcome the communication barrier between our employees and thus, the company performs up to its potential (Perkins, 1993).
Business activity is as old as human history. The book entitled “Introduction to Business” written by Jones has been extremely helpful to me in understanding the business and its key dimensions. My experience of reading the book has enhanced my understanding of the key issues involved in a business activity.
The book provided me with an overview of the nature, form, and functions of business and allowed me to unleash the many covert and intertwined meanings of various elements of business. Most of all, I got an opportunity to fully understand how crucial the activity of business is in the human lives and societies. The book is written in very simple and easily comprehensible language. The various concepts of business are supported and made easy through the incorporation of examples from daily lives. Previously, my ideas about the business and its integral elements were vague because the material I had was very difficult to read and understand.
The author has developed a three-pronged approach to understanding business as commerce, business as an occupation, and business as an organization making it easier for me understand the meaning of terms such as specialization and profit and told me why companies using key elements such as accounting, finance, human resource management, and accounting exist to provide goods and services to customers.
Now I can clearly state the significance of economics, accounting, human resource management, and operation management in business. As a matter of fact, I had always downplayed the importance of accounting in a business largely due to the fact that I always found it a boring subject. The book and my real-life experience in business compelled me to change my viewpoint. As opposed to my popular belief, accounting is indeed a dynamic, interesting, and creative subject. Any business cannot make headways towards profit-making without proper use of accounting. In today’s world, accounting has become much-sought-after commodity. Accounting is the backbone of any business and this is the reason why most of the companies are always in search for an employee who has a sound knowledge of accounting. The role and contribution of an accountant to the growth and development of any business organization cannot be stressed less.
My cousin who holds a professional degree in accounting has got a very coveted job in an established and very well-known company. The knowledge that I gained from reading the book enabled to find its validation in the professional workplace setting. Equally important is the role of other disciplines mentioned above in the formation and running of a business. All the valuable information and knowledge gleaned from the book enable me to better understand the multi-faceted dimensions of business and its disciplines.
Observation and Reflections
Understanding the basic and key concepts of economics helps us in understanding the world around us. Simply put, economics encompasses the study of efficient methods that teaches us how to cater to the demands of goods and services using scarce resources. It also allows us to understand the basic needs of people around us and devise ways to facilitate the people around us.
It goes without saying that economics has become an integral of our lives. In an age of highly globalized world, the onset of technological revolution has made the economic issues all the more important. Being a student of business, I cannot make my little contribution to the my would-be organization or my own business without having a grasp over basic economic issues such as creation and distribution of wealth, labor disputes, inflation, high taxes, rising oil prices, and international trade.
Finance refers to the management of money. It is equally an important discipline in the study of business. The point is when I have to manage my limited pocket money to cater to my monthly needs, how a large company or an organization can be spared. In short, the truth is that managing money is an activity in which everybody is involved directly or indirectly.
In my view, the management of money determines the success or failure of any individual or organization. Upon studying the structure of various, I came across the fact the almost all the successful companies place huge emphasis on their financial aspects.
Similarly, the role of human resource management is no less important in the work-place setting. Organizations can be defined as a cluster or group of people who work together in order to arrive at a commonly-shared goal and achievement. Therefore the human resource management is equally important in determining the success of any organization. All participants in the organization such as managers, employees, and other stakeholders must be aware of the processes of the human resource management and the concepts that guide these activities.
The entire discipline of human resource management focuses on the issues of leadership, interpersonal communication, organizational behavior, industrial relations, diversity in the workplace, administrative and employment law, and organizational development. The role of HR management has now become an integral part of companies and organizations. The strategy for modernizing human resource management, whose ultimate goal is to make the operations of the company more efficient, less costly and responsive to the needs of organization and employees and other concerned staff demand a set of well-structured procedures.
The aim of human resource management is driven by key strategies for the establishment of governance systems, improving conditions and professionalism of employees, the development of information technologies and communication and the systematic monitoring of progress. For managers and, realistically, all employees, this knowledge helps predict, understand and control organizational events as they relate to the human component as well as the processes, regulations, and controls that are essential to the effective utilization of human capital in a workplace setting.
Formation of Abstract Concepts and Generalizations
First, it is important to remember that accounting, finance, human resources, economics are the basic ingredients of any business activity. In this sense, comparisons from one year to another, from one company to another or securities in respect of a budget are possible (although a detailed analysis is necessary because the funding or the use of outside labor such influence certain aggregates and ratios.)
The Human Resource manager has to play a very important role in the organization. He often has to play the role of a consultant in the organization. The human resource manager can provide the advice to the other executives of the organization to tackle the persons who are working under their supervision. This is where the Human Resource manager performs the duties of a consultant. As an executive he has to make sure that the routine activities of his area are running smoothly.
In this sense, we believe that accounting and finance can be a binding force between different instruments for measuring, managing and creating value. Any business that does not make the most of accounting and financial aspects of the business is most likely to suffer from losses.
Adjusting entries are journal general adjusted entries that made at the end of the accounting period to assign expenses and revenue to that specific time period in which they actually belong. Adjusting entries are inevitable because usual journal entries are recorded on actual transactions, and the date on which these transactions occur not necessarily the date that required fulfilling the matching principle of double entry accounting system.
Application of Concepts
It is important to remember that accounting, finance, human resources, economics are the basic ingredients of any business activity. In this sense, comparisons from one year to another, from one company to another or securities in respect of a budget are possible (although a detailed analysis is necessary because the funding or the use of outside labor such influence certain aggregates and ratios.)
The business concepts that I have hitherto discussed have their practical implications and can be applied to any kind of workplace setting. Being a businessman at a small level though, it was necessary for me not to overlook the importance of accounting and finance for the growth of my company. Being a entrepreneur at a small level, I have discovered that the role of accounting and its application cannot be stressed less in any manner. The slight knowledge of accounting helped me in maintaining and making the budgets out of my resources quite prudently and sensibly.
Furthermore, there is lot of readymade software available in the market such as Quick book and Peach tree etc. with the customized one, therefore it also depends upon the software functionalities but before changing in any data proper approval is inevitable.
Because of growing population, at the national level quickly growing numbers of relatively unskilled workers decrease the wage rates and savings both, because of the surplus in available worker against the labor/worker demand. On the other hand, this growing population (notice: worker is the part of the population) require more money/spending on health care, education and other services to satisfy their needs that further reduce savings and investment both. (Simon, 1981)
Here it should be remembered that, the investment is the catalyst for economic growth while the saving is the catalyst for investment. Therefore, if population is increased rapidly than to economic growth (as most of the development countries are facing this situation), this population growth adversely affects the savings because of the increasing demand of foods and other services by the population that requires more spending.
This decreasing trend in savings and increasing tendency in demands stimulate the inflation that cause to decrease in investment activities, the overall result will be the slow or negative economic growth. This negative situation could be encountered, if particular economy successfully attracts the external resources to invest in different sectors like education and development etc and able to explore new dimension of savings.
Furthermore, it is necessary for the business organizations to recognize that the effect of PEST factors does not always remain constant. They keep on changing from time to time and context to context. Government policies and laws represent social attitudes whereas technological factors determines rise or fall in costs and productivity of a company. Along with the interaction of these factors, we must be aware of the fact that business environment is constantly changing. Some changes are gradual while others are revolutionary. (Sloman, 2006) Thus, the companies should plan their strategies keeping in view all the above mentioned factors to ensure success and maximum productivity.
Precisely put, the awareness about the effects of all the aforementioned environmental factors is instrumental in the smooth running, growth, and development of the organization. My organization can benefit a lot from this crucial knowledge. Needless to say, this allows for my organization to make the most of each environment and to fend off all the negative effects that come with it.
Being a manager of my own small business, the discourse of human resource helped me in making mature decision regarding the recruitment of employees. It helped me in outlining and formulating policies that helps in the uplifting in the local standing of the organization. I managed to outline the objectives and responsibilities of employees at my organization which I anticipated from each and every employee and what the employee could expect as an outcome from the enterprise.
This helps in fostering a healthy relationship and bondage between the different teams and stakeholders of the organization and caters an environment in which healthy competition and determination can take place. It is also the responsibility of the human resource department of the organization that it is completely aware and acquainted with the needs and requirements of the employee and the different complications that they are encountering from organizational ends.
All these are some of the core responsibilities that the contemporary human resource department needs to look forward to. When considering the contemporary organizational set up the responsibilities that the human resource needs to fulfill can be summarized to two of the key jobs. In this the first job is to ensure the retainment of old employees through their low turnover rate by attracting new people to work for the company and secondly an important responsibility that it shares today is to attract new employees. In order to fulfill this purpose the human resource department of companies intends to create environment which are highly interactive and communication friendly atmosphere where there is least number of barriers and communication hurdles between the management and the employee.
In addition to this human resource also intends to pressurize the management of the organization to increase the level of motivation among employees as there have been a number of cases registered in some of the most prominent organizations where employees have decided to leave the organization primarily because of the fact that they never felt that they were motivated for the work that they were performing in the organization.
Therefore in modern setting it is the job of the responsibility of the HR department to push the management in order to prevent such events from occurring in the organization.
Quality management is a very pivotal dimension of operations management in every organization. Quality management is crucial to successful operations management, mainly continuous progress to go with the consumers taste and preference at all times. More recent advancements in quality, such as benchmarking and total quality management, outsourcing and reengineering are always likely to result in advancements in operations management.
The company must involve itself in benchmarking activities if it is willing to be recognized as a leader in the market. Benchmarking ensures first-hand internal auditing process allowing the company to spot its weak areas and to devise ways to turn them into strengths. It is also extremely helpful in enhancing the customer base in the market place.
All in all, I can say that the exposure to independent business gave me an opportunity to have knowledge of different ingredients that makes a business venture complete. The knowledge that I had gleaned from the book prompted me to take all the right steps in my business venture.
Slomon (2004) Economics for Business, Pearson Education
Accountingcoach (2010). Adjusting Entries. Retrieved on 9 May 2010 from
Doyle, Alison. Equal Employment Opportunity Commission. Retrieved on 9 May 2011 from:
Allen Kelley C and Robert M Schmidt (2008). Economic demography, The New Palgrave
Dictionary of Economics, 2nd Edition.
Simon, J. (1981).The Ultimate Resource. Princeton, New Jersey: Princeton University Press.
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