ACC412 Business Strategy and Policy
A Study Material and Note in the Department of Accounting Afe Babalola University
BUSINESS
Various definitions of business are as follows:
“A business is nothing more than a person or group of persons properly organizes to produce or
distribute goods or services. The study of business is the activities of the activities involved in
the production or distribution of goods and services-buying, selling, financing personnel and the
like. In a theoretical sense, this definition of business is incorrect. Before an activity can be
considered a business, there must exist both the goal of profit and the risk of loss”. – Keith &
Gul Bellin
“Business is that complex field of commerce and industry in which goods and services are
created and distributed in the hope of profit with in a framework of laws and regulations”. -
Arthur M. Weimer
“Business comprises all profit seeking activities and enterprises that provided goods and services
necessary to an economic system. It is the economic pulse to a nation striving to increase
society’s standard of living. Profits are a mechanism for motivating these activities”. – Boono &
Krutz
“Business may be defined as human activity directed towards producing or acquiring wealth
through buying and selling goods”. – Lewis H.Haney
“Business is the sum total of those processes which are engaged in the removal of hindrances of
persons (trade), place (transport and insurance) and time (warehousing) in the exchange
(banking) of commodities”. – James Stephenson
“Business is a system created to satisfy society in needs and desires”. – Buskirik Green &
Robgers
“Business represents the organised efforts of enterprises to supply consumer with goods and
services”. – Musselman & Hughes
“Business may be defined as an activity in which different persons exchange something of value
whether goods or services for mutual gain or profit”. – Peterson and Plowman
,“Business means the whole complex field of commerce and industry, the basic industries,
processing and manufacturing industries and the network of ancillary services, distribution,
banking, insurance, transport and so on, which serve the world of business as a whole”. -
F.C.Hooper
“Business is all those activities involved in providing the goods and services needed or desired
by people”. It means a business activity called that activities, which provide goods or services
required and desired by persons of our society.
BUSINESS ENVIRONMENT
Definition of Business Environment is sum or collection of all internal and external factors such as
employees, customers needs and expectations, supply and demand, management, clients, suppliers,
owners, activities by government, innovation in technology, social trends, market trends, economic
changes, etc. These factors affect the function of the company and how a company works directly or
indirectly. Sum of these factors influences the companies or business organisations environment and
situation.
BUSINESS OBJECTIVES
Successful businesses are based on both goals and objectives, as they clarify the purpose of the
business and help identify necessary actions Goals are general statements of desired
achievement, while objectives are the specific steps or actions you take to reach your goal. Both
goals and objectives should be specific and measurable. Goals can involve areas such as
profitability, growth and customer service, with a range of objectives that can be used to meet
those goals.
Your business objectives are the results you hope to achieve as you run and grow your business.
As an entrepreneur, you are concerned with every aspect of your business and need to have clear
goals in mind for your company if you are to stay on track. Having a comprehensive list of
business objectives creates the guidelines that become the foundation for your business planning.
Examples of business objectives
1. Getting and Staying Profitable
,Maintaining profitability means making sure that revenue stays ahead of the costs of doing
business. Focus on controlling costs in both production and operations while maintaining the
profit margin on products sold.
2. Productivity of People and Resources
Employee training, equipment maintenance and new equipment purchases all go into company
productivity. Your objective should be to provide all of the resources your employees need to
remain as productive as possible.
3. Excellent Customer Service
Good customer service helps you retain clients and generate repeat revenue. Keeping your
customers happy should be a primary objective of your organization.
4. Employee Attraction and Retention
Employee turnover costs you money in lost productivity and the costs associated with recruiting,
which include employment advertising and paying placement agencies. Maintaining a productive
and positive employee environment improves retention.
5. Mission-driven Core Values
Your company mission statement is a description of the core values of your company. It is a
summary of the beliefs your company holds in regard to customer interaction, responsibility to
the community and employee satisfaction. The company's core values become the objectives
necessary to create a positive corporate culture.
6. Sustainable Growth
Growth is planned based on historical data and future projections. Growth requires the careful
use of company resources such as finances and personnel.
7. Maintaining a Healthy Cash Flow
Even a company with good cash flow needs financing contacts in the event that capital is needed
to expand the organization. Maintaining your ability to finance operations means that you can
prepare for long-term projects and address short-term needs such as payroll and accounts
payable.
8. Dealing with Change
, Change management is the process of preparing your organization for growth and creating
processes that effectively deal with a developing marketplace. The objective of change
management is to create a dynamic organization that is prepared to meet the challenges of your
industry.
9. Reaching the Right Customers
Marketing is more than creating advertising and getting customer input on product changes. It is
understanding consumer buying trends, being able to anticipate product distribution needs and
developing business partnerships that help your organization to improve market share.
10. Staying Ahead of the Competition
A comprehensive analysis of the activities of the competition should be an ongoing business
objective for your organization. Understanding where your products rank in the marketplace
helps you to better determine how to improve your standing among consumers and improve your
revenue.
Business Performance
Business performance indicators can be financial or non-financial. Financial performance
indicators are quantitative and measurable in monetary terms while non-financial performance
indicators are qualitative and not measurable in monetary terms. Examples are as follows:
Examples of Financial performance
1. Growth % in profit
2. Growth in Stock price,
3. Growth % in Sales,
4. . Growth % in revenue,
5. Cash in Hand
6. Debts (Lower the debts is more better)..
7. Market share.
A Study Material and Note in the Department of Accounting Afe Babalola University
BUSINESS
Various definitions of business are as follows:
“A business is nothing more than a person or group of persons properly organizes to produce or
distribute goods or services. The study of business is the activities of the activities involved in
the production or distribution of goods and services-buying, selling, financing personnel and the
like. In a theoretical sense, this definition of business is incorrect. Before an activity can be
considered a business, there must exist both the goal of profit and the risk of loss”. – Keith &
Gul Bellin
“Business is that complex field of commerce and industry in which goods and services are
created and distributed in the hope of profit with in a framework of laws and regulations”. -
Arthur M. Weimer
“Business comprises all profit seeking activities and enterprises that provided goods and services
necessary to an economic system. It is the economic pulse to a nation striving to increase
society’s standard of living. Profits are a mechanism for motivating these activities”. – Boono &
Krutz
“Business may be defined as human activity directed towards producing or acquiring wealth
through buying and selling goods”. – Lewis H.Haney
“Business is the sum total of those processes which are engaged in the removal of hindrances of
persons (trade), place (transport and insurance) and time (warehousing) in the exchange
(banking) of commodities”. – James Stephenson
“Business is a system created to satisfy society in needs and desires”. – Buskirik Green &
Robgers
“Business represents the organised efforts of enterprises to supply consumer with goods and
services”. – Musselman & Hughes
“Business may be defined as an activity in which different persons exchange something of value
whether goods or services for mutual gain or profit”. – Peterson and Plowman
,“Business means the whole complex field of commerce and industry, the basic industries,
processing and manufacturing industries and the network of ancillary services, distribution,
banking, insurance, transport and so on, which serve the world of business as a whole”. -
F.C.Hooper
“Business is all those activities involved in providing the goods and services needed or desired
by people”. It means a business activity called that activities, which provide goods or services
required and desired by persons of our society.
BUSINESS ENVIRONMENT
Definition of Business Environment is sum or collection of all internal and external factors such as
employees, customers needs and expectations, supply and demand, management, clients, suppliers,
owners, activities by government, innovation in technology, social trends, market trends, economic
changes, etc. These factors affect the function of the company and how a company works directly or
indirectly. Sum of these factors influences the companies or business organisations environment and
situation.
BUSINESS OBJECTIVES
Successful businesses are based on both goals and objectives, as they clarify the purpose of the
business and help identify necessary actions Goals are general statements of desired
achievement, while objectives are the specific steps or actions you take to reach your goal. Both
goals and objectives should be specific and measurable. Goals can involve areas such as
profitability, growth and customer service, with a range of objectives that can be used to meet
those goals.
Your business objectives are the results you hope to achieve as you run and grow your business.
As an entrepreneur, you are concerned with every aspect of your business and need to have clear
goals in mind for your company if you are to stay on track. Having a comprehensive list of
business objectives creates the guidelines that become the foundation for your business planning.
Examples of business objectives
1. Getting and Staying Profitable
,Maintaining profitability means making sure that revenue stays ahead of the costs of doing
business. Focus on controlling costs in both production and operations while maintaining the
profit margin on products sold.
2. Productivity of People and Resources
Employee training, equipment maintenance and new equipment purchases all go into company
productivity. Your objective should be to provide all of the resources your employees need to
remain as productive as possible.
3. Excellent Customer Service
Good customer service helps you retain clients and generate repeat revenue. Keeping your
customers happy should be a primary objective of your organization.
4. Employee Attraction and Retention
Employee turnover costs you money in lost productivity and the costs associated with recruiting,
which include employment advertising and paying placement agencies. Maintaining a productive
and positive employee environment improves retention.
5. Mission-driven Core Values
Your company mission statement is a description of the core values of your company. It is a
summary of the beliefs your company holds in regard to customer interaction, responsibility to
the community and employee satisfaction. The company's core values become the objectives
necessary to create a positive corporate culture.
6. Sustainable Growth
Growth is planned based on historical data and future projections. Growth requires the careful
use of company resources such as finances and personnel.
7. Maintaining a Healthy Cash Flow
Even a company with good cash flow needs financing contacts in the event that capital is needed
to expand the organization. Maintaining your ability to finance operations means that you can
prepare for long-term projects and address short-term needs such as payroll and accounts
payable.
8. Dealing with Change
, Change management is the process of preparing your organization for growth and creating
processes that effectively deal with a developing marketplace. The objective of change
management is to create a dynamic organization that is prepared to meet the challenges of your
industry.
9. Reaching the Right Customers
Marketing is more than creating advertising and getting customer input on product changes. It is
understanding consumer buying trends, being able to anticipate product distribution needs and
developing business partnerships that help your organization to improve market share.
10. Staying Ahead of the Competition
A comprehensive analysis of the activities of the competition should be an ongoing business
objective for your organization. Understanding where your products rank in the marketplace
helps you to better determine how to improve your standing among consumers and improve your
revenue.
Business Performance
Business performance indicators can be financial or non-financial. Financial performance
indicators are quantitative and measurable in monetary terms while non-financial performance
indicators are qualitative and not measurable in monetary terms. Examples are as follows:
Examples of Financial performance
1. Growth % in profit
2. Growth in Stock price,
3. Growth % in Sales,
4. . Growth % in revenue,
5. Cash in Hand
6. Debts (Lower the debts is more better)..
7. Market share.
