business

Profitability meaning

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Meaning: An entrepreneur organizes various factors of production like land, labour, capital, machinery, etc. The product finally reaches consumers through various agencies. Business activities are divided into various functions, these functions are assigned to different individuals. Various individual efforts must lead to the achievement of common business goals. Organization is the structural framework of duties and responsibilities required of personnel in performing various functions with a view to achieve business goals through organization. Management tries to combine various business activities to accomplish predetermined goals. Present business system is very complex.

The unit must be run efficiently to stay in the competitive world of business. Various jobs are to be performed by persons most suitable for them. First of all various activities should be grouped into different functions. The authority and responsibility is fixed at various levels.

Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. In the words of Allen, organization is an instrument for achieving organizational goals. In Wheeler’s view, organization is a process of fixing duties and responsibilities of persons in an enterprise so that business goals are achieved. The establishment of authority relationships with provision for co-ordination between them, both vertically and horizontally in the enterprise structure.

These authors view organization as a coordinating point among various persons in the business. Organization helps in efficient utilization of resources by dividing the duties of various persons. In its broadest sense organisation refers to the relationship between the various factors present in a given endeavor. Factory organisation concerns itself primarily with the internal relationships within the factory such as responsibilities of personnel, arrangement and grouping of machines and material control. Spriegel has given a wide definition of the organization. He has described it as the relationship among persons, factors in the enterprise. All factors of production are coordinated in order to achieve organisational objectives.

According to Terry organisation is the creation of relationship among persons and work so that it may be carried on in a better and efficient way. According to Northcott the purpose of organisation is to co-ordinate the activities of various individuals working in the organisation for the attainment of enterprise goals. Organisation is the adjustment of various activities for the attainment of common goals. In this sense, organisation is a group of people bound together in a formal relationship to achieve common objectives. It lays emphasis on position and not on individuals. In this sense, organisation is a process of organising work, people and the systems.

It is concerned with the process of determining activities which may be necessary for achieving an objective and arranging them in suitable groups so as to be assigned to individuals. It considers organisation as an open adoptive system and not as a closed system. One thing which is common in all the viewpoints is that organisation is the establishment of authority relationship among persons so that it helps in the achievement of organisational objectives. The total work of the enterprise is divided into activities and functions. Various activities are assigned to different persons for their efficient accomplishment. This brings in division of labour.