When you are studying a business, you can choose to study from various perspectives like marketing, technical, economic, political, social, etc. However, in order to get a complete understanding of the business, it is important to know about all these perspectives or facets of business. In this article, we will look at the facets of business, independently, to enhance our understanding of them.
Facets of Business
1. Technical Facet
When we technically view a business, we can liken it to a transformation process or a huge machine. In this machine, inputs go through an entire process to generate the required output.
Further, the inputs of a business are the various commodities which include industrial raw materials – minerals, metals, and agricultural commodities. Also, it is important for businesses to be aware of the terminologies pertaining to the commodities markets.
2. Commercial Facet
With a commercial perspective, a business is all about planning, organizing, managing and controlling the organization’s relationships with its markets and/or customers. In other words, it is all about marketing management. Further, marketing gurus have created the famous P’s for goods and services marketing as follows:
P’s for goods marketing
P’s for services marketing
- People – the way the business connects with the customers
- Physical Evidence – for example, hygiene in a restaurant
- Processes – for example, the time required to serve a customer, queue management, etc.
In this case, firms need awareness of the terminologies pertaining to the domestic and international consumer markets.
3. Financial Facet
If we look at a business from a financial perspective, then it is all about investment and the associated risks and returns. Therefore, the financial facet of business includes:
- Sources of business finance
- The state of the development of the financial markets
- Maintenance of accounts
- Preparation of the Profit and Loss account along with the balance sheet
In a nutshell, it involves estimating costs, revenue, and profits of the firm. It also involves the periodic reporting of the organization’s performance.
4. HR Facet
A business firm, from an HR perspective, is all about people. It includes the different job positions that people occupy and perform their respective roles, functions, and responsibilities. While most businesses consider employees as their greatest assets, ironically, these assets do not feature in their balance sheet.
However, people are important for a successful business. Their skills, character, motivation levels, and collective morale have a decisive effect on a firm’s performance. Therefore, the firm must be aware of all organizational processes and associated vocabulary of attracting and retaining energetic, enthusiastic, ethical, and talented human resources.
5. Administrative Facet
From an administrative perspective, a firm must possess knowledge about the various forms of business organization. Further, it must know about the regulations along with the approvals and clearances needed to start and continue running a business. It must also know the internal management and governance processes.
Solved Question on Facets of Business
Q1. What are facets of business? Name the 5 primary facets.
Answer: One can study business from various perspectives. These perspectives are like different windows in the same room. You can look through a specific window and understand the business with that particular perspective. However, for holistic awareness of a business, you must know about all facets of business.
The 5 primary facets of business are: