Why is business multi-dimensional? In understanding this question it would be relevant to discuss the issue in a broader context. Business is multi-dimensional because the number of products, their markets, their cost of production are rapidly changing.
The changes in market demand and various elements of cost of products are very much influenced by the international environment, national environment and the environment of those countries with which international transactions are increasing.
Business has been perceived as a profit oriented work, which requires both the physical effort as well as mental conception that are explained through theoretical analysis.
Business is thus the result of perception by five senses, which have an impact on the intellectual thinking leading to formulation of certain concepts that clarifies certain ideas. In a number of cases this is explained through the development of theories of various kinds of inter-relationships, which are conceived for elaborating various kinds of phenomenon required in conducting business.
International trade by its very nature is challenging not only in terms of exports but also in terms of imports. The exporters must have sufficient knowledge of the changing markets of their products in other countries.
Another important factor is that exports are possible to all countries if the exporter knows about the market demand of various kinds of products in which the exporter is interested. In export business industrially advanced countries with high GNP are the leaders, like UK, USA, Japan, China, Germany, France, Canada and the Netherlands.
These countries have been exporting their products for a century or more to most of those countries, which were also their colonies in a number of cases. The number of products which are sold, the number of products which have had been exported are changing their export orientation, including greater importance to packaging and branding.
Improved technology, better means of transport and communication owned by the leading exporters of the world are the main factors for continuous increase in the international trade, which provides the big international markets.
While discussing the international characteristics of business we must be able to analyze the number of factors, which affect the manufacturers as well as distributors. Better methods of production where the quality of the product can be improved and maintained require more and more information about the kind of raw material which are used in production and the changing technology by competitors continuously enhances the number of factors which are important for the maintenance of quality including that of packaging.
Today when we think of successful manufacturers we may come to the conclusion that information of various kinds have been collected and that there are firms whose business may be to supply information. Changing market demand requires more and more research, which is making business multi -dimensional in nature. Cultural changes, especially the attitude of consumers for buying products and services is also changing.
With greater facilities provided by retailers for buying on credit, return privilege, warranty and guarantee, in my opinion, has, brought a revolution amongst consumers of middle class who want to avail all the facilities provided by retailers.
The younger generation of today enjoys buying on credit. If we compare the consumers of thirties, forties and fifties, they were more interested in buying on cash basis and they tried to save as much money as possible. In the current changing situation the banks are willing to give loans for the purchase of every thing like TVs, fridges, cars or even a house on ownership basis.
Why business is multi-dimensional is the fact that various products can be produced in different ways. The role of distributors i.e. wholesalers and retailers reflect the multidimensional nature of business. In this context we must emphasize that cost of production, communication, transportation, promoting, packaging and specially the cost of increasing the market-share.
Today the analysis of cost of various categories of activities is becoming important because, one important aspect of business success is in continuous reduction in cost. The analysis of cost is important for understanding the productivity of workers, their skills, education, experience, motivation for work and their own future, which they want to have for their children.
In addition to cost of workers and raw material, another important aspect is importance of supervisors in getting the work done by workers and the proper use of machines, which may affect the quality and quantity of production. The supervisors can play an important role in effecting the cost of production.
In developing countries supervisors are not generally well trained. They learn by experience and cost of supervision may be low in developing countries in terms of payment made to them. However, this must be pointed out that supervisors have great impact on quantity as well as on quality of products. The cost of supervisors not only in the shape of their salary but also in training and re-training programmes of those supervisors, who may prove of great value in maintaining and improving the quality and workers' output.
Managers: The cost of managers generally increased because of specialization in production, marketing and other promotional activities. In most of the business organizations the number of managers have increased during the last fifty years of the last century. As a result in a number of cases business firms have reshuffled their organization charts and the responsibilities of their managers have been redefined.
The introduction of computers provided quick information to managers. The cost of obtaining information may be increasing in some cases and decreasing in other cases depending upon the effectiveness and efficiency of senior executives.
Cost analysis is a challenging job. With the availability of highly educated cost accountants, overhead costs are continuously analyzed. Cost accounting and management accounting have proved extremely useful in calculating the cost of various factors very accurately.
The cost analysis is now an important tool in business. As a result of cost analysis and market analysis have increased the number of managers. Mergers are important for cost reduction, competition, possibility of increasing the overall efficiency of business organizations which may lead to greater consumer satisfaction of the society.
If we include various kinds of marketing methods, which are now being used in the form of marketing strategies, then the multi-dimensional nature in business has contributed in increased production of various kinds, improvement of quality and the availability of these products in various parts of the world. We may also equate multi-dimensional aspect with business development. We may also say that the business system in agriculture has been changing and those who are involved in farming business are going through new kinds of risks besides the traditional risks of rains, storms and floods, but also risks in competition, in introducing new and better quality products, and that too at lower prices.
The theory of business would emerge from the historical business like the establishment of retail markets, wholesale markets, industrial areas and continuous improvement in farming technology. Melas and fairs were increasing in 131h through 151h centuries and after the industrial revolution trade fairs for the national products as.
Well as for international products were organized to attract local as well as foreign merchants to place orders. The development of retailing started in small retail markets to bigger and bigger retail markets like Anarkali and Shahi Bazaar in Lahore and Hyderabad.
In the field of wholesaling, markets were established and specialization in wholesale markets was on the basis of product line. For example wholesale markets for vegetable, cloth etc. in the retail markets most recent development is that of Mall, the fully air-conditioned markets, selling highly expensive items.
Business as an activity, has emerged because of the inner desire of individuals as well as the kind of adjustment he is supposed to make because of environmental changes.
Persons need more and more goods of several kinds to make their life more comfortable and improve the efficiency of their work and in a number of cases individuals who have the spirit of enterprise also formulate certain goals that they want to achieve in their lives.
Because of these objectives business activities have emerged that are so important that a man cannot enjoy living without them. The end result of business activities historically is continuous increase in products and services. New products, better packaging has brought a good change in the living style of rich and middle class families to a very great extent and a small change in the case of poor.
The theory of business may be stated in terms of continuous business development through enhancing markets for old products as well new products by finding new techniques of getting more funds for increasing financial needs of business organizations/corporations. In addition to old and new products with better packaging a business is theorized as the effort of businessmen to discover new markets for their products and innovate new products for the expected changes in the market.
The development of various kinds of businesses would be meaningful if we develop a case study for Pakistan. Pakistan had an environment where business organizations were limited. Farming was the main factor contributing to the GNP.
Since 1950 things have been changing in Pakistan and environment was the major factor in business development and in shaping the business system of Pakistan. Environment may be classified as microenvironment and macro environment.
Good business organizations monitor the changing environment and continuously adapt their business firms and the opportunities which are created by the changing environment.
At the macro level business firms have been making their strategy on the basis of greater profit possibility which may be perceived because of the relationship between government regulations and policy changes of government prevailing during the budget period. It may also be pointed out here that continuous increase in prices of most of the goods have been an important factor for greater business profits.
Government regulations are often resulting in bribe and corruption and businessmen take full advantage in getting their work done by bribing officers of the concerned departments. For example electricity charges are different for commercial and domestic consumers and for a number of businessmen who run small factories in their home they try to minimize bill amount by bribing inspectors of electric power suppliers.
Environmental changes which affect business may be identified in eight categories namely, economics, demographics, psychological, technological, political, legal, social and cultural. Each one of these factors is not within control of the business organizations and they have to adjust their business policies and practices on the basis of present changes or expected changes.
The policies of business firms at micro level are extremely important for such business organizations where educated supervisors, managers and executives actually organize and manage the firm.
Perception/conception: Theoretical perspectives are essential for continual thinking. To be more specific it should be stated that theory is a set of systematically related propositions specifying causal relationships among variables. Baunol has pointed out, "a theory is a structure which describes the working of inter-relationships of the various aspects of phenomenon" 1.
After a lot of discussion about a theory, it would be appropriate to lay down a few ideal characteristics for developing theoretical framework:
* a theory must be logically consistent. In other words, there would not be internal contradictions, which can be found in the propositions of a theory;
* to constitute a theory, statements about phenomenon must be interrelated;
* it is essential that all statements in the "theory" must be exhaustive as far as possible. It may be pointed out here that in the case of social and business theories, it is very difficult to point out "the nature of exhaustiveness";
* as is well known in any theory, the propositions should be mutually exclusive;
* the quality of a good theory is that there is least repetition in propositions, or in statements which are part of theory;
* in this age, research techniques are highly developed both in the field of social and business areas. Any theory in the field of business or social sciences, including management, must be substituted by empirical inquiry.
Business as a thought provoking action; by conducting such activities which may lead to exchange of product and services and are conducted with the objectives of long term profit, short term profit, venture profit, capital gain profit, price rise profit, government duty reduction profit and profit to environmental changes of various categories -socioeconomic, psychological changes of human beings, nature's windfalls or any other activities in the society at the national and international level.
In specific terms, business is conducted for earning profit; in some cases to reduce the possible losses. In conducting businesses of various kinds throughout the world business persons have developed a number of perceptions, conceptions and theories. Also theorists have written various kinds of explanations about business organizations that have developed in organizing and managing their firms.
In business literatures quite a large number of concepts have been given; for example the concepts of risk, profit, loss, capital, cost (production cost, administrative cost, transportation cost etc.) and revenue. A number of theories have also been developed like X and Y theories; business opportunities, product market, government regulations and its impact on business development.
A list of perception and conceptions can be prepared by reading the published literature in the field of business. For example the retailer, while buying products would perceive whether he can sell and earn profit However, in my opinion, theories of business have not been clearly elaborated which may explain the structure of business organizations and business as in institutions.
(The writer is a Life Research Professor and Dean of the Faculty of Management, Hamdard University.)
