Question

What is the purpose of a firm? Express your response in terms of owner’s perspective.

Answer 1

Firm is defined as an business entity that buy or sale goods/ services with the sole purpose of making profit. Firms do have their own strategy and goals . They achieve their objectives with the help of the goals set by them.

Firm can be in the form of :

1. Corporations

2. Partnership firm

3. Sole propreitorship

Al the 3 types of firm has their own advantages and disadvantages.

But the common purpose for all the types of Firms are :

1. To maximize their profit and create wealth by

a . Setting goals and acheiving them.

b. having a vision for acheiving long term goals.

c. Adapting oneself according to the changing envirment

d. Training an dmotivating employees for acheiving goals as per the strategy made

2. To create values to the customers by providing them better quality products/services at affordable rates.

3. To deal ethically with the suppliers and creditors as well as maintain trade relationship with them.

4.To create and provide healthy working conditions for employees so that employee turnover can be minimizedand their job satisfaction can be maximized

5. To make the optimal utilization of the resources

6. To adhere to the goverment rules and regulations with respect to envirmental laws , income tax law and any other law as may be applicable.

7. To participate is Corporate social responsibility.