Importance and Function of business
Importance of Business
Business is one of the most important human activity. It has been playing an important role in the economic development of the nation and for the upliftment of living standard of the people. All the developed European countries, such as USA and Japan are developed today due to the development of the business. The important functions of business are as follows:
- Economic development of a country
Business is playing a vital role in the economic development of the country. It is highly defined by the development of industry and commerce. Industries utilize the various natural and other resources available in the country. Similarly, the development of commercial activities contributes to the exchange of goods and services at national and international levels. It fulfills the needs of the people of the country and contributes to earning foreign currency by exporting the products to the foreign countries.
- Utilization of natural resources
Natural resources are the free gift of nature. For the utilization of natural resources business has been playing an important role. Some countries are rich in natural resources, some in mineral resources, others in human and science and technology. The business utilizes such a manner that the whole kind of humankind is benefited.
- Improvement of quality of life
The quality of life means a level of enjoyment, comfort, and health in one's life. Business improves the quality of life in two ways. Firstly, it provides high-quality goods and service to the people required for their enjoyment, comfort, and health. Secondly, a business offers employment opportunities to the people by which they can generate income and improve the quality of life.
- Fulfillment of human wants
Human wants and desires are boundless and unlimited it keeps on changing. The business provides high-quality goods and services to the people for the satisfaction of their wants and desires at reasonable prices. In the absence of business activities, human wants may remain unfulfilled.
- Employment generation
Business is the source of employment. It creates employment opportunities for a large number of people in any country. Various types of employees are required both in management and technical jobs of business. The development of industry and commerce is helping to solve the employment problems of the nation.
- Earning of foreign currency
Business is an important source of earning foreign currency. Foreign currency can be earned by exporting goods to foreign countries. The development of industry and commerce is helpful for the production of goods and services. The development of export trade brings favorable balance in payment and surplus. Foreign currency can be used to import machinery equipment for developmental works.
- Increase in government revenue
Business is an important source of government revenue so the business activities contribute to the government revenue in the form of taxes such as excise duty, sales tax, income tax, proper tax, entertainment tax and so on. It also helps to develop our country.
The development of industry and commerce is helping to fulfill the needs of society. The development of business in the country ensures self-reliance, self-dependence, and self -respect. A self-sufficient country has distinct prestige and status in international level.
- Fostering International relation
Business is the most important medium for the development of international relation. The development of business in a country attracts a foreign capital, labor, technology, and other goods and services. It is also helpful to exchange culture and tradition among the citizens of friendly nations.
Function of Business
Business is an economic activity, which is concerned with production, distribution, and exchange of goods and services with an objective of earning the profit by satisfying the unlimited wants of human beings. The major important function of business are as follows:
- Employment function
The creation of employment opportunity is the main objective of business. Business concerns are involved in various economic activities like production, management services, trade and auxiliaries of trade. People can get employment opportunities based on their academic qualification, skill, and experience in different organizations. They create employment opportunities for the members of society. So, they are helping to solve the unemployment problems of the nation.
- Distribution function
The distribution function is another important function of the business. Supply of goods through different channels from the place of production to the hands of final consumption is known as the distribution function of management. It involves various functions like buying, selling, storing, risk bearing etc. All the functions should be done to distribute the goods in the right place at the right time.
- Organizing function
The organizing function is concerned with management and planning different activities. It is accumulation and coordination of required resources such as men, material, money, machine etc. To produce the goods and services, the business organization must coordinate and control all these factors of production.
- Production function
Production of goods and services is one of the important function of business which is concerned with inputs like men, machine etc. Manufacturing concerns are involved in the production of goods. The production function involves various activities like the product, planning, procurement of raw materials, storage of raw materials and proper layout of plant and machinery, the delegation of authority and responsibility to employees, quality control etc.
- Financing function
Finance means capital which is the lifeblood of the organization. It is the task of providing money for a business. A business needs adequate capital to acquire different factors of production. It includes an estimate of required budget, finding out the appropriate source of capital, allocating fixed and working capital etc.
- Marketing function
One of the important function of business is the marketing function. This function is done to satisfy the consumers. Marketing function includes distribution of goods and determination of the reasonable price, advertising, transportation, warehousing, insurance and obtaining market information.
- Research and development function
Research and development are necessary for every business organization to make itself up to the date with the changing environment of the market and society. It facilitates to develop the new design, model, size of the product to satisfy the customers. Research work is required to conduct a study about the expectation of customers.
Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.
Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.