The Content

Business is a long term, highly repetitious activity, frequently

requiring people to do the same thing today, tomorrow, the next day.
Many of todays well known businesses were started by one or two
people and the ownership of those businesses was very simple. It was during
the 19th century that businesses wanted to expand and increase the number
of owners. To do this they needed to sell shares. To encourage people to buy
shares, governments around the world passed laws which gave people
limited liability. During the 20th century many people bought shares in
sucessful businesses for the following reasons: to have a share in the profit
made by the business, the hope that a profitable business would attract more
and more people to buy shares and this will make the price rise so that shares
could be sold at a profit.
The simplest form of business ownership is the sole trader.
Here, one person owns the business, takes all the decisions and risks his own
money. People enjoy to be self employed and they are happy to have
complete control of their own business. But there is no one to share the
responsibilities involved in decision making and raising finance is a
problem. Sole traders finance their business through a bank loan and the
bank will charge a high rate of interest. A bank will ensure that it can get the
money back, if the loan is not repaid, by requiring security on the loan. Sole
traders are liable for any debts they have, even if they are not the traders
fault. A trader may do a job for a larger business; it may be worth 20 000$
but it will not be paid until the job is complete. The sole trader must spend 9
000 $ on equipment, but when the job is complete the larger business closes
down and the 20 000$ are not paid; still, the sole trader has to cover the 9
000 already spent as he has unlimited liability.
Sometimes, a pair of a small group of people will get together
to run a business. This is called a partnership. Partnerships face unlimited
liability as sole traders do.
Partners may put some money into the partnership in return for a
share of the profits but take no part in the running of the partnership, do not
work for it and have no say in any decisions.Under these circumstances, it
is only the money that has been invested that is liable to be used in order to
pay off any debts. This is a silent partner and he has only limited liability.
The technical name for both private and public limited companies is
joint stock company. It means that the stock in a company is owned jointly
by several people.

Some business activity is carried on by the government and this

forms the public sector.
Profit maximisation may not be the only aim of a busines; in public
companies there is a separation of ownership and control, so that directors
and managers may run a company in their own interests.
Business is the production,buying, and selling of goods and services.
A business, company or firm is an organization that sells goods or services.
A business may be referred to formally as a concern. Then, it may be
referred to approvingly as an enterprise in order to emphasize its
adventurous, risk taking qualities and business in general may be referred to
in the same way, in combinations such as free enterprise and private
enterprise.
A business requires tremendous effort to get it going and once going,
it requires minimum effort to keep it going. The role of business is to stay in
business, providing wages, goods and services into the community and
meeting the profit needs of the business and the key stakeholders in the
business. The source of funding and capital is considered to be the main
difference between the stakeholders and the shareholders. In the stakeholder
model, funding is being supplied through bank loans. This means that they
will ask for managerial consideration and response from those running the
company.
In the shareholder model, stockholders advance capital to managers
who act as their agents in pre-authorized ways. Shareholdes buy shares to
maximise the return on their investment; the responsibility of the manager in
a firm is to engage in activities designed to increase the profits, that is to
engage in open and free competition. To create shareholder wealth, the
management needs to outperform the expectations shareholders had when
they made their investment decisions. In the shareholder model of corporate
governance, the focus is on institutional agents monitoring corporate agents
in order to enhance the investment prospects of investors. In the stakeholder
model, the premise is that a company is more likely to perform well and the
shareholders are more likely to benefit, if opportunities are created for the
various groups holding an interest in the company to enter into binding
relationship. The emphasis in the stakeholder model is the way enterprises
are governed while in shareholder model the emphasis is on the way
enterprises are managed. The shareholder based entity is more responsive to
changes in market conditions.
Both approaches take account of the issues of board checks and
balances, abuse of authority and power, the role of boards, director rewards

and participation in setting standards for accounting, safety, employee

relations and risk management.
In todays business world we have to take into consideration the two
models. The shareholder model encourages a top down, command and
control leadership approach whereas in the stakeholder model a team based,
shared decision making, servant leadership approach is more likely.
Stakeholder based governance refers to how the organization makes
cost effective decisions in terms of wealth creation but with consideration of
stakeholders rights. Corporations have multiple responsibilities and need to
balance competing conditions, such as long and short term notion of gain,
profit and sustainability, cash and accounting concepts of value, democracy
and authority, power and accountability. This model is more common in
continental Europe and Japan.
The micro approach to corporate governance refers to shareholders.
This is concerned with maximizing wealth creation for shareholders. Control
is linked here to profitability, an Anglo American model.
Then business may be referred to as commerce, commercial
distinguishing the business sphere from other areas such as government or
arts or from non money making activities.
The social role of any business is linked to what we call as serving
the future: sufficient profits to satisfy the business and the stakeholders meet
todays profits needs. But as the expectations increase society has to invest
in ideas and technology that expands the economic base and the wealth of
the society. An essential requirement is that each and every business strives
to achieve profits over and above immediate business needs and the
stakeholders needs. Without this surplus profit there can be no venture
capital. Without venture capital, economic growth will struggle to match
population growth and the growth in social expectations.
Any business requires true professionalism- the courage to care
about people, clients, career.
True professionalism means the pursuit of excellence. If you value
something, then you must monitor your performance in that area, acept
nothing less than excellence and actively work to learn what to do differently
every time you fall short of excellence. Firms must provide help and counsel
to those who are encountering difficulties in living uo to their standards, in
order to help them get back on track. Once professionals have confirmed
their core values, they need to design systems which provide consequences
for noncompliance. By leaving each individual professional to decide for
himself what level to achieve in key value areas, firms say that the company
as a society has no standards that must be adhered to. Excellence in such

areas become a matter of personal professional choice. Professionals must

live by the slogan you are allowed to fail, you are not allowed to give up
trying.
The oposite of the word professional is not unprofessional, but rather
technician. These may be highly skilled, but they arent professionals until
they demonstrate characteristics such as:taking pride in their work, showing
a personal commitment to quality, reaching out for responsibility,getting
involved, looking for ways to make things easier for those they serve,
listening to the needs of those they serve, being team players, honest,
trustworthy, loyal, open to constructive critiques.
Professionalism is an attitude not a set of competences. A true
professional is a technician who cares. And if finding people with technical
skill is usually easy, finding people who are filled with energy, drive,
enthusiasm personal commitment to excellence is hard. Because real
professionalism has little to do with which business you are in, what role
within that business you perform, how many degrees you have. It implies a
pride in work, a commitment to quality, a dedication to the interests of the
client, a sincere desire to help.
Traditional definitions of professionalism are filled with references
to status, educational attainments, noble calling. Now, we refer to attitude
and character. So, firms should hire people for attitude and train for skill.
Being a professional asks for treating people as professionals that is invest in
them. Then professional success requires more than talent, it asks for
initiative, involvement, enthusiasm, commitment. Being good at business
development involves nothing more than a sincere interest in clients and
their problems and a willingness to go out and spend the time being helpful
to them.
Success in business life means not only good professionalism but
effective functioning of the firms, positive outlook.