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Features of a Business System

The features of business system are as follows:

(i)    Goal Oriented: A business system is directed towards the achievement of certain objectives. The important objective of a business is earning profits for survival and growth in the environment by supplying the goods and services required by the society. The business has other objectives also like providing good working conditions to workers, providing high quality goods to the society and contributing towards the achievement of national goals.

(ii)    Input-output: A business system imports inputs form the external environment and exports its outputs to the external environment. Its inputs include raw materials, capital, technology, labour and information whereas its outputs include the goods and services produced by it.

(iii)    Transformation Process: A business system is creative in nature as it transforms various inputs into outputs or goods and services desired by the customers.

(iv)    Open and Adaptive: A business is an open system in the sense that it influences and is influenced by the environment. It can continuously adjust itself to the changing environment on the basis of feedback form the external environment. The structure and sub-systems of the business change due to changes in the environment of the business.

(v)    Feedback: Then term ‘feedback’ means that which is fed back to the giver of information or goods. A business provides goods and services to the society which in turn provides feedback to the business about the acceptability of its goods and services. On the basis of this information, the business can take corrective measures, whenever required.

(vi)    Sub-system: A business is composed of various sub-systems like production sub-system, marketing sub-system, finance sub-system, personnel sub-system and managerial sub- system. These sub-systems are dependent upon one another. As a result, the is a continuous interaction among the sub-systems.

(vii)    Synergy: There is proper integration of various sub-systems of the business. As a result the contribution of the whole system is greater than the sum of the contribution f all sub-systems. This is called the law of synergy which implies that whole is greater than the sum of its parts.

(viii)    System Boundary: Each system has a boundary which separates it from other systems. A closed system has a fixed boundary whereas, the boundary of an open system is flexible and invisible.

(ix)    Environment: A business organization function under two sets of environment, namely, internal and external. As the internal environment includes production sub-system, marketing sub-system, finances sub-system, human resource sub-system etc. These sub-systems operate under the influence of external environment which is known as ‘Supra system’. The external environment includes all those factors which lie outside the system such as economic, politico-legal, socio-cultural, investors, customers, suppliers competitors, international factors, etc. A business system gets various inputs form the external environment and gives, in turn, its output to it.

(x)    Control Mechanism: There are many control systems within a business system. The control systems are designed by the management. Management is an important force with a business which takes all important decisions and activities to convert inputs into outputs and to respond to environmental opportunities and constraints.

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