People form the core of business
People form the core of business

The human element is core of business. Business without people is like a book without the letter. Business needs people as owners, managers, employees and consumers. People need business for the production of goods and services as well as for job opportunities. Whether a business is operated in America, Canada, Japan or Brazil does not matter. Business may be operated differently and its goals and objectives may be different, but the core element of all business is people.

Owners: Owner is mighty in a business. An owner is a person who owns a business as well as those who invest money in a business. Most of giant corporations are owned by a large number of people for example Toyota Motor Corporation, Coca-Cola Enterprise, etc. Toyota Motor Corporations have over 613,646 Shareholders (Owners) as of August 23, 2014. There are three basicforms of business ownership:

  • Sole Proprietorship: Sole Proprietorship is the oldest and most common form of business. Sole Proprietors may operate the business alone or may take help from others, but there will be only one boss and final say will always rest with him. Typically, sole proprietor owns a small service, for example, roadside grocery store, fast food store, restaurant, etc. The capital is needed to start the business are generally provided through personal wealth or borrowed money. Sole proprietors have unlimited liability. If the proprietor fails in the business then he/she have to sell his/her personal wealth to satisfy the claims. All the profits proprietor made from the business belong to him/her as well as all the asset of the business for example inventory, real property, etc.
  • Partnership: A business start as a sole proprietorship, later expand into a partnership and finishes being a corporation. A partnership is a business that is owned by two or more people. A partnership business is a legal agreement between two or more parties to place their capital, labour, skills in business with understanding that there will be sharing of profit and loss between partners. Basically, there are two types of partnership:

    General Partnership:  A partnership in which at least one partner has unlimited 
    liability is called general partnership. General partner has authority to make a decision like an owner.

    Limited Partnership:
    A partnership in which at least one partner is general is known as limited partnership. Limited partners are only liable for their investment.
  • Corporation: A business that is a legal entity created by a specific law or an act and which is separated from its owners is called corporation. A corporation has legal rights of an individual; it can own property, purchase goods and services and sue another person or corporation. A corporation can be owned by the Government or can be owned by individuals. The owner (shareholders) of the corporation has limited liability.
Managers: Manger is a person who has the control or direction of a business or institution. Basically, there are two types of manager one is owner manager also called entrepreneur and another is professional manager employed by the owner. Both managers try to achieve basic objectives of business profit, growth, survival and social responsibility. The owner manger sets his/her own goals and objectives, he/she work according to his/her own wish. He/she does not need to say anything about the business to anyone. The owner of the business sets a professional manager goals and objectives. Owner of the business can judge the performance of the professional manager by how well objectives are achieved in a given time.

Employees: An employee is a person who provides his/her skills and abilities needed to produce goods or services in exchange for compensation. Most of the employees expect a fair wage or salary for his/her skills and abilities and gradually to increase in amount. To compete with other business, a business organization needs a committed and effective team of employees.

Consumers: A consumer is a person who purchases goods or services for personal or organizational use. Consumers of first world countries like Japan, America, and Germany, etc. want more and better product. They want better automobiles, better luxuries, and equipment. They want to pay a fair price for the goods and services they purchase and want it to be reliable. A business organization attempts to satisfy the needs and desire of a consumer while making profit.
"People form the core of business" - Explain
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