Posted on: Monday, September 18, 2017
Business activity has been conceptualized by many business persons, business managers and academicians in the field of business management ever since business emerged as an organized activity. Therefore the concept of business has changed over the years of history of business. So far the following concept of business has emerged :-
(i) Profit Oriented Concept of Business
(ii) Customer Oriented Concept of Business
(iii)Social or Modern Eclectic Concept of Business
Profit Oriented Concept of Business : In the early age of the business, it was conceived to be a wealthy producing or profit making economic activity. Any human activity directed towards the acquisition of wealth or earning profit through production or exchange of goods was treated to be a business. The profit oriented concept is also known as traditional concept of business. When people started doing business by forming organization, than business used to be conceived as an organization organised and operated to produce and provide goods and services to society under the incentive of private gain or profit.
Assumptions : (i) The sole objective of the business is to earn profits by production and/or distribution of goods. (ii) Customers will buy the products that are available in the market at the most competitive rates. (iii) There is hardly any need to think for customer service and satisfaction for running a business.
Customer Oriented Concept of Business : This concept has came into existence around 1950’s and gained momentum during the 1960’s and 1970’s. The business organization began to think that business should earn profits through service and satisfaction of the customers Organization were forced to regard customer as the king of the market.
(i) Business organizations should produce and provide the goods/ services that are needed by the customers.
(ii) The products and services provided by the business should satisfy the needs of the customers.
(iii) The business should earn the profits through the service and satisfaction of the customer.