Difference between Traditional and Modern Concept of Business: Business is concerned with producing and distributing goods and services to make a profit. These are two Concepts: The traditional concept of business and the Modern concept of business. A regular process of exchange of goods and services that involves risk and uncertainty. Business is an economic activity aim at meeting needs through the supply of goods and services to customers and their satisfaction.
What is the Difference between Traditional and Modern Concepts in Business?
They are two types:
1] Traditional Concept:
The traditional concept states that the business aims to make a profit through the production and marketing of products. Products can be of various types. The traditional concept states that the objective of the business is to earn profit through the production and marketing of products. For example, the main objective of the business of material goods, services, ideas, and information, etc. is to get maximum profit according to the traditional concept.
Meaning of Traditional Concept:
Business is the production and distribution of products for personal gain. The profit-oriented concept also knows as the traditional concept of business. Any human activity directed towards the acquisition of wealth or earning profit through production or exchange of goods was treated to be a business.
2] Modern concept:
Consumer satisfaction is the focal point of the modern concept of business. The modern concept states that a business earns profit through customer satisfaction. Business without consumers is not business. It develops long term relations with customers. The business should earn profit with social responsibility. It should care about the welfare of society and consumers. it must work within the law. Profits can be made by maintaining social accountability. It attempts to incorporate every aspect of human civilization. It sees modern business as a socio-economic institution that is always responsible to society.
Meaning of Modern Concept:
The business organization should determine the needs of the customers and deliver them the desired products. The business organization began to think that businesses should earn profits through the service and satisfaction of the customers.