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Business and Banks:Wild thoughts


In India business is driven by money rather than a brand and customer. Drucker defines business as creating a customer. Money is important for business just as breathing for life. That is not in question. But, when a person starts a business, the objective must be creating value, not making money, just as the purpose of life must be doing something that is worthwhile that will lead to happiness rather than happiness per se. I am going against the commonly held belief that happiness is the goal of life and making money is the aim of business. I am challenging both.
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From The Practice of Management
"Marketing is the distinguishing, the unique function of the business. The second function of a business is innovation i.e. the provision of better and more economic goods and services.
Profit is a feedback, the self-reg
ulation of a process by its own product. Its second function is economic activity.
A business cannot be defined or explained in terms of profit. The purpose of business is to create a customer."

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Money is not a panacea for the ills of industry and business. Firms in distress want money to tide over, but the money is sucked in like parched sand, and you can’t expect any shoots out of it. To nudge banks to lend as if money is the solution is a recipe for disaster. One must see what the problem is and mend the defective part. Giving money mindlessly is like giving pain killers to a cancer patient. A business can be kept going by continuous infusion of money from outside as the govt. is doing for ailing public sector, just as hospitals keep a man technically alive by massive life support system. The difference is hospitals make money while the govt. loses the money collected from the public in one way or another. Banks must keep to professional banking. Hope they remember!
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