Human beings have needs of varied nature; some are essential for existence (food, shelter, clothing, water, love and belonging), some are for comforts (fan, cooler, taxi) and some are for luxuries of life (air-conditioning, big bungalows, leisure activities, expensive cars).
The activities professionally and commercially organized and undertaken by various people in society to meet varied human needs are called economic activities or business activities. For businesses to thrive, they must be organised and run by competent people having solid business acumen.
What constitutes business acumen?
Business acumen is the ability to produce, create or supply goods and services in a cost effective and quality efficient manner. An astute businessman strives to fulfil varied human needs by professionally supplying quality goods and services to consumers while being able to make profits for itself.
Business acumen is a skill that is developed overtime and is based on a sound understanding of human nature and needs. It is, essentially, the ability to make good judgements and judicious decisions. And this can only be developed through hands on experience, theoretical as well as practical understanding of principles of business, sound understanding of human needs and human nature.
What Are the Qualities Required to Succeed in Business?
To be able to succeed in any business, keeping in mind the nature of consumers, there are a few criteria that a product or service needs to meet. Broadly speaking, these are:
It is in meeting these needs and building a profitable business that a person displays their business acumen. In other words, business acumen gives you the know-how and the intuition you need to be able to:
Business acumen also gives you a vision, mission, goals and objectives, foresightedness, discipline, ability to hire the right kind of field experts, ability to delegate work, having robust systems and ethical policies to ensure smooth functioning of the business, adaptability, systems of backward and forward integrations, following mandatory compliances keeping close check on inflow and outflow of cash, maintaining cash reserves, insuring machinery, goods and intellectual property, book keeping.
How Can Studying Economics Help Develop Business Acumen?
An economics student, as a result of their study of the subject, becomes increasingly observant to the facts and truths of any phenomenon. Therefore, the study of economics, which is based on logic, reason, problem solving, circumstantial awareness and evidence, equips individuals to not only comprehend human behaviour, decisions and reactions, but also equips them to recognize resources as scarce in relation to human needs. It also makes them better at resource allocation, resource management and at establishing resource self-sufficiency. Some specific areas where the study of economics helps to develop business acumen are:
The study and application of both economics and business go hand in hand and therefore it wouldn’t be wrong to say that the study and application of the principles of economics can be of immense value to the day-to-day workings of any business.
How can business acumen be developed?
To develop business acumen from a very young age, children and students should be assisted in understanding basic economic concepts such as limited resources, money, goods, services, transactions, labour time, leisure time, collaborative work, individual contributions, planning, savings, supply, demand, production, consumption.
These can be practically understood through:
For more senior aspirants, such as fresh graduates or undergraduates’, the go to strategy would be to secure internships in business organizations (in their area of interest) where they get an opportunity to understand the various aspects of the business, bottom up.
Kadambari Rana is an educator who practices, promotes and advocates the principles of child centric holistic education.
