Quality and Utility

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Essentially all socially desired (legal) economic activities pursued for the purpose of earning profit could be defined as business. Thus economic activities directed to wards creation of utility for the satisfaction of wants may be termed as business. Eventually creation of utility leads to creation of surplus and this is the crux of all business activities.


Peter Drucker (1974) enumerates 8 key areas in which objectives of performance and results are to be set. They are marketing, innovation, human organization, financial resources, physical resources, productivity, social responsibility and profit requirements. Every business organization like everyone, lives in the midst of laws of the land, government regulations, economic conditions, changing consumer preferences, technological changes, culture, values system and business ethics of the society. All these factors constitute the business environment. A business organization and its environment are mutually interdependent, interacting with each other continuously. Environment is the supra-system of which the firm is only a small subunit. It can survive and thrive only when the environment desires its output of goods and services and is prepared to approve of an endorse its activities. Business organization had grown from the time immemorial, with the advent of industrial revolution, business organization, controlled by few thrive towards profit maximization. Industrial revolution changed the whole concept of business and capitalistic approach and individual profit making takes the prime objective. But during the 20th century it has changed. ...
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