Business has been beneficial for human society, as it has allowed people to trade processes between countries and between humans. Business is the root of cutting-edge technologies and latest progress. But, it is also a world filled with various terms and jargons. To understand these terms, read on. Here are some of the common jargons used in business and their meanings. Hopefully, they will help you to understand the terms used in business better.
Business of World in the Jargon
People work with each other
Coworkers are people who are part of the same company. These individuals may have different ranks or job specializations, but they share the same goal: the success of the organization. Examples of coworkers include a department manager, sales representative, social media expert, janitor, and a few others. These people have many similarities, and each has their own unique skills and perspectives. But what makes them unique?
Free markets have been a positive social force
There are some downsides to the free market, however. One of the biggest downsides is the ‘race to the bottom’, where companies compete by reducing quality to increase profits. As a result, the market forces that drive free trade often produce a more efficient system, but the overall result is the same: lower quality products. This means that society pays the price for the pollution caused by businesses.
The free market forces people to create products that consumers want. It also forces businesses to innovate and improve their efficiencies, leaving only those who are able to keep up with demand. Because firms that produce products and services that consumers want tend to thrive, a free market forces them to improve their production efficiency. This results in lower costs for consumers, which is good for economic growth. There are also fewer regulations that hinder the flow of new companies.
In the 1970s, Milton Friedman argued that a free market would eliminate many social ills by increasing efficiency. He suggested cutting taxes, offering more school choices, and increasing consumer choice. These arguments remained popular and were soon followed by a number of examples of unethical business behavior. The Deepwater Horizon oil spill, for example, was the result of companies cutting costs.
One of the countries that came closest to a truly free market was Singapore. The country’s tariff rate is just 0.1 percent, and most imports are duty-free. Furthermore, its personal and corporate tax rates are very low, making the country one of the most economically free nations in the world. These are the main advantages of free markets. This means that the government has no influence on the economy.
Manufacturing operations belong to the knowledge world
The manufacturing process is an integral part of a company’s success. Whether it is making a car or a food item, manufacturing operations are interdependent and must operate as a unified, standardized system. In the knowledge world of business, operations are governed by the principles of quality control, consistency, and accountability. The criteria for evaluating the effectiveness of operations is no longer cost control, but global performance measures, such as product quality, operational flexibility, and customer service. Product performance is essential to operations flexibility, as is technological knowledge.
Processing operations struggle to stay afloat
Processing operations are a major part of the economy. These businesses rely on repetitive day-to-day operations to produce products. In most cases, their demand is regional and the products are not branded, so there is less opportunity for differentiation. Moreover, the cost structure in this field makes them difficult to corner. This is where they struggle in the world of business. Listed below are some of the challenges that processing operations face in the world of business.
Increased returns cause businesses to work differently
The increasing returns in a market turn many conventional notions about how businesses work on their heads. Increasing returns tend to magnify the advantage of companies, technologies, and products that are already ahead of the competition. These forces reinforce success and exacerbate failure and generate instability in the market. As such, increasing returns have significant implications for all industries, particularly those that depend on new technologies. Hence, understanding and predicting this phenomenon can be crucial in guiding business decisions.
One common example of increasing returns in business is retail franchises. The more McDonald’s or Motel 6 franchises there are in a given geography, the better known they become. This spreads the costs of their fixed costs like real estate, computer operations, and headquarters staff. By making themselves more recognizable to a larger segment of the population, the companies increase their chances of survival. In addition, they are more likely to survive when they have more franchises in a given region.
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