Hvad hedder det, når et selskab køber rettighederne til noget for at forhindre dets produktion, for at øge overskuddet

Hvad hedder det, når et selskab køber rettighederne til noget for at forhindre dets produktion, for at øge overskuddet

Hvad hedder det, når en stor virksomhed eller virksomhed ser, at et produkt, en opfindelse eller medicin vil ødelægge eller reducere størrelsen af ​​deres marked eller forbrugerbase; og de enten køber rettighederne til det, eller betaler dem for ikke at gøre det; så de kan fortsætte forretningen eller forstørre deres overskud.

Jeg kan huske, at jeg hørte om sådan nogle ting, der sker flere gange, jeg kan ikke huske citaterne, og jeg kan heller ikke huske, om nogen rent faktisk gav et navn til dette fænomen.

Hvis du ikke kan finde et navn til det, accepterer jeg en liste med 2 eller flere forekomster som et svar.


Der er ikke noget specifikt ord for det, men du kan kalde det "at købe konkurrencen" eller "holde et kvælertag på markedet".


Vi kalder det "uvenlig erhvervelse".


Defekte produkter og forbrugerrettigheder

Farlige eller på anden måde defekte produkter forårsager skader på utallige forbrugere hvert år. Hvis du køber et produkt, der simpelthen ikke fungerer som annonceret og ikke forårsager nogen egentlig skade, kan du være dækket af en garanti eller i det mindste have mulighed for at returnere det for en refusion eller bytte. Se produktgarantier og returneringer for flere detaljer.

Du kan dog have et personskadekrav, hvis du har lidt en skade på grund af et defekt produkt. FindLaw's omfattende produktansvarsafdeling, inden for hovedcentret for ulykker og skader, indeholder en lang række artikler og ressourcer, der hjælper dig med bedre at forstå og reagere på en tilbagekaldelse eller skade fra et farligt produkt.

Denne artikel giver en generel oversigt over dine rettigheder som forbruger med hensyn til tilbagekaldte eller skadefremkaldende produkter. Se vores hovedforbrugerbeskyttelsesafdeling for flere emner.

Typer af produktfejlskrav

De tre hovedtyper af produktfejl er design fejl, fabrikant fejl og mangler i instruktioner eller advarsler. Det juridiske middel til skader påført et defekt forbrugerprodukt varierer fra sag til sag.

    - Eksempel: En cykelfabrikants design angiver bremsekabler, der har tendens til at gå fra hinanden, når rytteren aktiverer bremserne under normal brug. - Eksempel: En bil har en speeder, der er tilbøjelig til at klæbe på grund af en defekt fremstillingsproces, der skaber mulighed for en alvorlig ulykke og kvæstelser eller død. - Eksempel: En tilstrækkelig skriftlig advarsel er påkrævet for en rumvarmer, der er tilbøjelig til at blive overophedet og forårsage brandfare, hvis den efterlades i mere end 12 timer.

Juridiske retsmidler for defekte produkter

Loven giver adskillige midler mod virkningerne af farlige forbrugerprodukter afhængigt af situationen. De to vigtigste juridiske teorier for produktfejlssager er uagtsomhed og strengt ansvar:

Uagtsomhed:Sagsøgerne kan opkræve erstatning fra en ansvarlig sagsøgt (dvs. producenten og/eller forhandleren), hvis han eller hun kan bevise, at producenten har overtrådt en pligt, der påhviler en sagsøger, at dette brud har forårsaget en skade, og at sagsøgeren har lidt faktiske skader som en resultat. For eksempel ville en motorcykel, der ikke blev testet ordentligt og mister et hjul, hvilket forårsagede alvorlig skade på rytteren, sandsynligvis resultere i, at sagsøgeren modtog en pengepris for skader. Se & quotBevis fejl: Hvad er uagtsomhed? & Quot for flere oplysninger.

Andre juridiske veje omfatter påstanden om ens garantirettigheder (underforstået eller udtrykkeligt) og teorien om kronglet vildledning. Se "Lovligt grundlag for ansvar i produktsager" for en kortfattet oversigt over disse forskellige juridiske teorier.

Farlige produkter: Fra krybber til cigaretter

FindLaw giver målrettet information om forskellige forskellige kategorier af defekte eller farlige produkter, der er anført nedenfor:

Se den amerikanske regerings Recalls.gov -websted for oplysninger om nylige produktgenkaldelser og en søgbar database over tidligere tilbagekaldelser. Du kan også lære mere om forbrugerbeskyttelseslove efter stat på vores besvarelsesside for forbrugerbeskyttelsesadvokater.

Få juridisk hjælp til et defekt eller farligt produkt

Hvis du er blevet skadet af et defekt produkt, kan du overveje at kontakte en personskadesadvokat for at lære om de retsmidler, der kan være tilgængelige. Se "Produktansvar Juridisk hjælp" for at få flere oplysninger om ansættelse af en advokat til et produktkrav, plus links til forbrugerbeskyttelsesbureauer og gældende love.


Børsnedbrud Gnder Kritik

Efter 1. verdenskrig, i løbet af 20'erne, i 20'erne, ” var der et hidtil uset økonomisk boom, hvor velstand, forbrugerisme, overproduktion og gæld steg. I håb om at slå den rig, investerede folk i aktiemarkedet og købte ofte aktier på margen med stor risiko uden føderalt tilsyn.

Men den 29. oktober 1929 styrtede aktiemarkedet sammen med offentlig tillid, da investorer og banker tabte milliarder af dollars på bare en dag. Aktiekursstyrtet fik næsten 5.000 banker til at lukke og førte til konkurser, voldsom arbejdsløshed, lønnedslag og hjemløshed, der udløste den store depression.

For at hjælpe med at fastslå årsagen til den store depression og forhindre et fremtidigt børsnedbrud afholdt det amerikanske senats bankudvalg høringer i 1932, kendt som Pecora -høringer, opkaldt efter udvalgets rådgiver, Ferdinand Pecora. Høringerne fastslog, at mange finansielle institutioner havde vildledt investorer, handlet uansvarligt og deltaget i udbredt insiderhandel.


Fordele og ulemper ved S -selskaber

Fordele ved arkivering under underkapitel S

Den store fordel ved at registrere sig som et S -selskab er skattefordelen: ikke at skulle betale føderale skatter på enhedsniveau. Det er en fordel at spare penge på selskabsskatter, især når en virksomhed er i sine første år.

S corp -status kan også sænke fanen for personlig indkomstskat for virksomhedsejerne. Ved at karakterisere penge, de modtager fra virksomheden som løn eller udbytte, sænker S-virksomhedsejere ofte deres ansvar for selvstændig beskatning. S corp -status genererer fradrag for forretningsomkostninger og lønninger, der også betales til deres ansatte.

S-aktionærer kan være virksomhedens ansatte, optjene lønninger og modtage selskabsudbytte, der er skattefrie, hvis fordelingen ikke overstiger deres lagergrundlag. Hvis udbyttet overstiger en aktionærs aktiegrundlag, beskattes overskuddet som kursgevinster - men disse beskattes med en lavere sats end almindelig indkomst.

Andre fordele omfatter at kunne overføre interesser eller justere ejendomsgrundlag uden at stå over for negative skattemæssige konsekvenser eller skulle overholde komplekse regnskabsregler.

Endelig kan S -selskabsstatus hjælpe med at skabe troværdighed hos potentielle kunder, medarbejdere, leverandører og investorer ved at vise ejerens formelle engagement i virksomheden.

Ulemper ved arkivering under underkapitel S

Fordi S -selskaber kan skjule lønninger som virksomhedsdistributioner for at undgå at betale lønsumsafgifter, undersøger IRS, hvordan S -selskaber betaler deres ansatte. Et S-selskab skal betale rimelige lønninger til aktionærmedarbejdere for ydede ydelser Før eventuelle fordelinger foretages.

Når det drejer sig om at foretage disse udlodninger til interessenter, skal S -korpset allokere overskud og tab baseret på nøjagtigt procentdelen af ​​ejerskab eller antal aktier, hver enkelt ejer.

Hvis et S -selskab ikke gør det - eller hvis det foretager andre skridt til manglende overholdelse, f.eks. Fejl ved et valg, samtykke, anmeldelse, aktieejerskab eller krav om registrering - kunne IRS afslutte sin underkapitel S -status. Dette sker dog sjældent. Normalt kan en hurtig afhjælpning af fejl med manglende overholdelse undgå eventuelle negative konsekvenser.

At indgive under underkapitel S kræver også tid og penge - eller mere præcist gør virksomheden med at oprette et selskab. Virksomhedsejeren skal indsende vedtægter med statssekretæren i den stat, hvor deres virksomhed er baseret. Selskabet skal skaffe en registreret agent for virksomheden, og det betaler andre gebyrer i forbindelse med at inkorporere sig selv.

I mange stater betaler ejere årsrapportgebyrer, franchiseafgifter og andre diverse gebyrer. Imidlertid er afgifterne typisk billige og kan fratrækkes som en omkostning ved at drive forretning. Alle investorer modtager også udbytte- og distributionsrettigheder, uanset om investorerne har stemmeret.

Endelig er der kvalifikationskravene. Grænserne for antallet og aktionærernes art kan vise sig at være byrdefulde for en virksomhed, der vokser hurtigt og ønsker at tiltrække venturekapital eller institutionelle investorer.

Skattefordele: ingen eller mindre virksomheds- og selvstændig beskatning for ejer, ingen dobbeltbeskatning for aktionærer

Stiftelsesbeskyttelse: begrænset ansvar, overførsel af interesser

Potentielt væksthæmmende kvalifikationer for at opretholde status


Multinational Corporation (MNC)

Et multinationalt selskab (MNC) er en virksomhed, der opererer i sit hjemland såvel som i andre lande rundt om i verden. Det opretholder et centralt kontor Virksomhedsstruktur Virksomhedsstruktur refererer til organisering af forskellige afdelinger eller forretningsenheder inden for en virksomhed. Afhængigt af en virksomheds mål og industrien i et land, der koordinerer ledelsen af ​​alle dets andre kontorer, f.eks. Administrative filialer eller fabrikker.

Det er ikke nok at kalde en virksomhed, der eksporterer sine produkter til mere end et land, en multinational virksomhed. De skal opretholde den faktiske forretningsdrift i andre lande og skal foretage en udenlandsk direkte investering Udenlandske direkte investeringer (FDI) Udenlandske direkte investeringer (FDI) er en investering fra en part i et land til en virksomhed eller et selskab i et andet land med det formål at etablere en varig interesse. Varig interesse adskiller FDI fra udenlandske porteføljeinvesteringer, hvor investorer passivt holder værdipapirer fra et fremmed land. der.

Karakteristika for et multinationalt selskab

Følgende er de fælles kendetegn ved multinationale selskaber:

1. Meget høje aktiver og omsætning

For at blive et multinationalt selskab skal virksomheden være stor og skal eje en enorm mængde aktiver, både fysiske og økonomiske. Virksomhedens & rsquos -mål er høje, og de er i stand til at generere betydelige overskud.

2. Filialnetværk

Multinationale virksomheder opretholder produktions- og marketingaktiviteter i forskellige lande. I hvert land kan virksomheden føre tilsyn med flere kontorer, der fungerer gennem flere filialer og datterselskaber Datterselskab Et datterselskab (sub) er en forretningsenhed eller virksomhed, der er fuldt ejet eller delvist kontrolleret af et andet selskab, betegnet som moderselskab eller holdingselskab. Ejerskab bestemmes af procentdelen af ​​aktier i moderselskabet, og denne ejerandel skal være mindst 51%. .

3. Kontrol

I forhold til det foregående punkt kontrolleres forvaltningen af ​​kontorer i andre lande af et hovedkontor i hjemlandet. Derfor findes kommandokilden i hjemlandet.

4. Fortsat vækst

Multinationale selskaber bliver ved med at vokse. Selvom de opererer i andre lande, stræber de efter at vokse deres økonomiske størrelse ved konstant at opgradere og gennemføre fusioner og opkøb Fusioner Anskaffelser M & ampA -proces Denne vejledning tager dig igennem alle trin i M & ampA -processen. Lær, hvordan fusioner og opkøb og handler gennemføres. I denne vejledning skitserer vi erhvervelsesprocessen fra start til slut, de forskellige typer af overtagere (strategiske kontra finansielle køb), betydningen af ​​synergier og transaktionsomkostninger.

5. Sofistikeret teknologi

Når en virksomhed bliver global, skal de sikre sig, at deres investering vokser betydeligt. For at opnå en betydelig vækst skal de bruge kapitalintensiv teknologi, især i deres produktions- og marketingaktiviteter.

6. De rigtige færdigheder

Multinationale virksomheder sigter mod kun at ansætte de bedste ledere, dem, der er i stand til at håndtere store beløb, bruge avanceret teknologi, styre arbejdere og drive en enorm forretningsenhed.

7. Kraftfuld marketing og reklame

En af multinationale virksomheders mest effektive overlevelsesstrategier er at bruge mange penge på marketing og reklame. Sådan kan de sælge hvert produkt eller mærke, de laver.

8. Produkter af god kvalitet

Fordi de bruger kapitalintensiv teknologi, er de i stand til at producere top-of-the-line produkter.

Årsager til at være et multinationalt selskab

Der er forskellige grunde til, at virksomheder ønsker at blive multinationale selskaber. Her er nogle af de mest almindelige motiver:

1. Adgang til lavere produktionsomkostninger

Opsætning af produktion i andre lande, især i udviklingsøkonomier, betyder normalt, at man bruger betydeligt mindre på produktionsomkostninger. Selvom outsourcing er en måde at nå målet på, kan oprettelse af produktionsanlæg i andre lande være endnu mere omkostningseffektiv.

På grund af deres store størrelse kan MNC'er drage fordel af stordriftsfordele og vokse deres globale brand. Væksten sker gennem strategisk fremstilling/service placering, som gør det muligt for virksomheden at drage fordel af undervurderede tjenester over hele kloden, mere effektive og billige forsyningskæder og avanceret teknologisk/FoU -kapacitet.

2. Nærhed til mål internationale markeder

Det er fordelagtigt at oprette forretninger i lande, hvor et virksomheds målforbrugermarked er placeret. Det hjælper med at reducere transportomkostninger og giver multinationale virksomheder lettere adgang til forbrugerfeedback og information samt forbrugerinformation.

International mærkegenkendelse gør overgangen fra forskellige lande og deres respektive markeder lettere og reducerer marketingomkostninger pr. Indbygger, da det samme mærkesyn kan anvendes over hele verden.

3. Adgang til en større talentmasse

Multinationale virksomheder er også kendt for kun at ansætte de bedste talenter fra hele verden, hvilket gør det muligt for ledelsen at levere den bedste tekniske viden og innovative tænkning til deres produkt eller service.

4. Undgåelse af takster

Når en virksomhed producerer eller fremstiller sine produkter i et andet land, hvor de også sælger deres produkter, er de fritaget for importkvoter og told.

Modeller af MNC'er

Følgende er de forskellige modeller af multinationale selskaber:

1. Centraliseret

I den centraliserede model etablerede virksomheder et hovedkvarter i deres hjemland og bygger derefter forskellige produktionsanlæg og produktionsfaciliteter i andre lande. Dens vigtigste fordel er at kunne undgå told og importkvoter og drage fordel af lavere produktionsomkostninger.

2. Regional

Den regionaliserede model siger, at en virksomhed holder sit hovedkvarter i et land, der fører tilsyn med en samling af kontorer, der er placeret i andre lande. I modsætning til den centraliserede model omfatter den regionaliserede model datterselskaber og associerede virksomheder, der alle rapporterer til hovedkvarteret.

3. Multinationale

I den multinationale model opererer et moderselskab i hjemlandet og etablerer datterselskaber i forskellige lande. Forskellen er, at datterselskaberne og datterselskaberne er mere uafhængige i deres drift.

Fordele ved at være et multinationalt selskab

Der er mange fordele ved at være et multinationalt selskab, herunder:

1. Effektivitet

Med hensyn til effektivitet er multinationale virksomheder lettere i stand til at nå deres målmarkeder, fordi de fremstiller i de lande, hvor målmarkederne er. De kan også nemt få adgang til råvarer og billigere arbejdsomkostninger.

2. Udvikling

Med hensyn til udvikling betaler multinationale virksomheder bedre end indenlandske virksomheder, hvilket gør dem mere attraktive for den lokale arbejdsstyrke. De foretrækkes normalt af den lokale regering på grund af den betydelige mængde lokale skatter, de betaler, hvilket hjælper med at øge landets og økonomiens økonomi.

3. Beskæftigelse

Med hensyn til beskæftigelse ansætter multinationale virksomheder lokale arbejdere, der kender kulturen på deres sted og dermed er i stand til at give nyttig insider -feedback om, hvad lokalbefolkningen ønsker.

4. Innovation

Da multinationale virksomheder ansætter både lokale og udenlandske arbejdere, kan de finde på produkter, der er mere kreative og innovative.

Udenlandske direkte investeringer

Udenlandske direkte investeringer er udbredt i multinationale selskaber. Investeringerne sker, når en investor eller virksomhed fra et land foretager en investering uden for driftslandet.

Udenlandske investeringer opstår oftest, når en udenlandsk virksomhed etableres eller købes direkte. Det kan skelnes fra køb af en international portefølje, der kun indeholder aktier i virksomheden, frem for at købe mere direkte kontrol.

Yderligere ressourcer

CFI er den officielle udbyder af den globale Financial Modeling & amp Valuation Analyst (FMVA) & handel Bliv et Certified Financial Modeling & amp Valuation Analyst (FMVA) & reg certificeringsprogram, designet til at hjælpe alle med at blive en finansanalytiker i verdensklasse. For at blive ved med at lære og fremme din karriere vil de ekstra CFI -ressourcer herunder være nyttige:

  • Vedtægter vedtægter vedtægter vedtægter er et sæt formelle dokumenter, der fastslår eksistensen af ​​et selskab i USA og Canada. For en virksomhed at være
  • Bestyrelse Bestyrelse En bestyrelse er et panel af personer, der vælges til at repræsentere aktionærer. Enhver offentlig virksomhed er forpligtet til at installere en bestyrelse.
  • Stordriftsfordele Stordriftsfordele Stordriftsfordele refererer til den omkostningsfordel, en virksomhed oplever, når den øger sit outputniveau. Fordelen opstår pga.
  • Spin-off Spin-Off En corporate spin-off er en operationel strategi, der bruges af et selskab til at oprette et nyt datterselskab fra sit moderselskab.

CFI's Corporate & Business Strategy Course

Lær at udføre strategisk analyse i CFI & rsquos online Business Strategy Course! Det omfattende kursus dækker alle de vigtigste emner i virksomhedsstrategi!


Typer af fusioner

Der findes forskellige former for fusioner, afhængigt af målsætningen for de involverede virksomheder. Nedenfor er nogle af de mest almindelige fusionstyper.

Konglomerat

Dette er en fusion mellem to eller flere virksomheder, der driver uafhængige forretningsaktiviteter. Virksomhederne kan operere i forskellige brancher eller i forskellige geografiske regioner. Et rent konglomerat involverer to virksomheder, der ikke har noget tilfælles. Et blandet konglomerat finder derimod sted mellem organisationer, der, mens de opererer i uafhængige forretningsaktiviteter, faktisk forsøger at få produkt- eller markedsudvidelser gennem fusionen.

Virksomheder uden overlappende faktorer vil kun fusionere, hvis det giver mening ud fra et aktionærformueperspektiv, det vil sige, hvis virksomhederne kan skabe synergi, hvilket inkluderer forbedring af værdi, ydeevne og omkostningsbesparelser. En konglomeratfusion blev dannet, da The Walt Disney Company fusionerede med American Broadcasting Company (ABC) i 1995.

Medfødt

En kongenerisk fusion er også kendt som en produktudvidelsesfusion. I denne type er det en kombination af to eller flere virksomheder, der opererer på samme marked eller sektor med overlappende faktorer, såsom teknologi, marketing, produktionsprocesser og forskning og udvikling (R & ampD). En produktudvidelsesfusion opnås, når en ny produktlinje fra det ene selskab føjes til en eksisterende produktlinje i det andet selskab. Når to virksomheder bliver en under en produktudvidelse, kan de få adgang til en større gruppe af forbrugere og dermed en større markedsandel. Et eksempel på en kongenerisk fusion er Citigroups fagforening fra 1998 med Travellers Insurance, to virksomheder med supplerende produkter.

Markedsudvidelse

Denne type fusion opstår mellem virksomheder, der sælger de samme produkter, men konkurrerer på forskellige markeder. Virksomheder, der deltager i en markedsudvidelsesfusion, søger at få adgang til et større marked og dermed et større kundegrundlag. For at udvide deres markeder fusionerede Eagle Bancshares og RBC Centura i 2002.

En fusion er frivillig fusion af to virksomheder på stort set lige vilkår til en ny juridisk enhed.

Vandret

En horisontal fusion opstår mellem virksomheder, der opererer i den samme branche. Fusionen er typisk en del af konsolideringen mellem to eller flere konkurrenter, der tilbyder de samme produkter eller tjenester. Sådanne fusioner er almindelige i brancher med færre virksomheder, og målet er at skabe en større virksomhed med større markedsandele og stordriftsfordele, da konkurrencen mellem færre virksomheder har en tendens til at være større. 1998-fusionen af ​​Daimler-Benz og Chrysler betragtes som en horisontal fusion.

Lodret

Når to virksomheder, der producerer dele eller tjenester til en produktfusion, omtales fagforeningen som en lodret fusion. En lodret fusion opstår, når to virksomheder, der opererer på forskellige niveauer inden for samme branches forsyningskæde, kombinerer deres aktiviteter. Sådanne fusioner gøres for at øge synergier opnået gennem omkostningsreduktionen, som skyldes fusion med et eller flere forsyningsselskaber. Et af de mest kendte eksempler på en lodret fusion fandt sted i 2000, da internetudbyderen America Online (AOL) kombineret med mediekonglomeratet Time Warner.


Særlige overvejelser

Der kan være muligheder for producenterne, hvis produktionsomkostningerne overstiger et produkts salgspris. Det første, de kan overveje at gøre, er at sænke deres produktionsomkostninger. Hvis dette ikke er muligt, skal de muligvis genoverveje deres prisstruktur og marketingstrategi for at afgøre, om de kan begrunde en prisstigning, eller om de kan markedsføre det til en ny demografisk. Hvis ingen af ​​disse muligheder virker, skal producenterne muligvis indstille deres drift eller lukke ned permanent.

Her er et hypotetisk eksempel for at vise, hvordan dette fungerer ved hjælp af olieprisen. Lad os sige, at oliepriserne faldt til $ 45 pr. Tønde. Hvis produktionsomkostningerne varierede mellem $ 20 og $ 50 pr. Tønde, ville der opstå en kontantnegativ situation for producenter med stejle produktionsomkostninger. Disse virksomheder kunne vælge at stoppe produktionen, indtil salgspriserne vendte tilbage til rentable niveauer.


Produktion: Betydning, definition, typer og faktorer

Da det primære formål med økonomisk aktivitet er at producere nytte til enkeltpersoner, regner vi som produktion i løbet af en tidsperiode al aktivitet, som enten skaber nytte i perioden, eller som øger samfundets evne til at skabe nytte i fremtiden.

Erhvervsvirksomheder er vigtige komponenter (enheder) i det økonomiske system.

De er kunstige enheder skabt af enkeltpersoner med det formål at organisere og lette produktionen. Virksomhedens væsentlige kendetegn er, at det køber produktionsfaktorer som jord, arbejdskraft, kapital, mellemprodukter og råvarer fra husholdninger og andre forretningsvirksomheder og omdanner disse ressourcer til forskellige varer eller tjenester, som det sælger til sine kunder, andre forretningsvirksomheder og forskellige regeringsenheder som også til udlandet.

Definition af produktion:

Ifølge Bates og Parkinson:

“Produktion er den organiserede aktivitet med at omdanne ressourcer til færdige produkter i form af varer og tjenester formålet med produktionen er at tilfredsstille efterspørgslen efter sådanne transformerede ressourcer ”.

Ifølge J.R. Hicks:

Produktion er enhver aktivitet rettet til tilfredshed for andre mennesker ’ ønsker gennem udveksling ”. Denne definition gør det klart, at vi inden for økonomi ikke behandler den blotte fremstilling af ting som produktion. Det, der laves, skal være designet til at tilfredsstille ønsker.

Hvad er ikke produktion?

At lave eller gøre ting, der ikke er ønsket eller er lavet bare for sjov, kvalificerer ikke som produktion. På den anden side er alle job, der har til formål at tilfredsstille ønsker, en del af produktionen.

Dem, der leverer tjenester såsom frisører, advokater, buschauffører, postbud og ekspedienter er lige så meget en del af processen med at tilfredsstille ønsker som landmænd, minearbejdere, fabriksarbejdere og bagere. Testen af, om en aktivitet er produktiv eller ej, er, om nogen vil købe sit slutprodukt eller ej. Hvis vi vil købe noget, skal vi have det, hvis vi ikke er villige til at købe det, så økonomisk set ønsker vi det ikke.

Betydningen af ​​Exchange:

Så fra vores ovenstående definition er det klart, at mange værdifulde aktiviteter, såsom arbejde udført af mennesker i deres egne huse og haver (den såkaldte gør det selv-øvelse) og alt frivilligt arbejde (såsom gratis coaching, gratis sygepleje, indsamling abonnement på en social årsag som oversvømmelse eller jordskælvshjælp) øger livskvaliteten enormt, men der er ingen praktisk måde at måle deres økonomiske værdi (værdi).

Dette er sådan, og fordi det inden for økonomi er en vigtig opgave at måle ændringer i produktionsmængden, er det nødvendigt at tilføje kvalifikationsklausulen ‘gennem udveksling ’, dvs. til gengæld for penge, til definitionen af ​​produktion.

Tre produktionsformer:

Til generelle formål er det nødvendigt at klassificere produktionen i tre hovedgrupper:

1. Primær produktion:

Primærproduktion udføres af ‘extractive ’ industrier som landbrug, skovbrug, fiskeri, minedrift og olieudvinding. Disse industrier er involveret i sådanne aktiviteter som at udtrække naturens gaver fra jordens overflade, fra under jordens overflade og fra havene.

2. Sekundær produktion:

Dette omfatter produktion i fremstillingsindustrien, nemlig at vise halvfabrikata og færdigvarer fra råvarer og mellemvarer-omdannelse af mel til brød eller jernmalm til færdigt stål. De beskrives generelt som fremstillings- og byggeindustrier, såsom fremstilling af biler, møbler, tøj og kemikalier, som også teknik og bygning.

3. Tertiær produktion:

Industrier i tertiærsektoren producerer alle de tjenester, der gør det muligt at lægge de færdige varer i forbrugernes hænder. Faktisk leveres disse tjenester til virksomhederne i alle former for industri og direkte til forbrugerne. Eksempler dækker distributive forhandlere, bank, forsikring, transport og kommunikation. Offentlige tjenester, såsom lov, administration, uddannelse, sundhed og forsvar, er også inkluderet.

Produktion:

Enhver aktivitet i forbindelse med indtjening og pengeforbrug kaldes en økonomisk aktivitet. Produktion er en vigtig økonomisk aktivitet. Det resulterer i output (oprettelse) af et enormt udvalg af økonomiske varer og tjenester.

Produktionsfaktorer:

Produktion af en vare eller service kræver brug af visse ressourcer eller produktionsfaktorer. Da de fleste ressourcer, der er nødvendige for at fortsætte produktionen, er knappe i forhold til efterspørgslen efter dem, kaldes de økonomiske ressourcer.

Ressourcer, som vi kalder produktionsfaktorer, kombineres på forskellige måder af virksomheder eller virksomheder for at producere en årlig strøm af varer og tjenester.

Tabel 5.1: En klassificering af produktionsfaktorer:

Hver faktor får en belønning på grundlag af sit bidrag til produktionsprocessen, som vist i tabellen.

Faktisk kan ethvert samfunds ressourcer, der omtales som dets produktionsfaktorer, klassificeres på en række måder, men det er almindeligt at gruppere dem efter visse egenskaber, de besidder. Hvis vi husker på, at produktionen af ​​varer og tjenester er et resultat af mennesker, der arbejder med naturressourcer og med udstyr såsom værktøjer, maskiner og bygninger, kan der let udledes en generelt acceptabel klassifikation. Den traditionelle opdeling af produktionsfaktorer adskiller arbejdskraft, jord og kapital, med en fjerde faktor, virksomhed, nogle gange adskilt fra resten.

De mennesker, der er involveret i produktionen, bruger deres færdigheder og bestræbelser på at lave ting og gøre ting, der ønskes. Denne menneskelige indsats er kendt som arbejde. Med andre ord repræsenterer arbejdskraft alle menneskelige ressourcer. De naturressourcer, folk bruger, kaldes jord. Og det udstyr, de bruger, kaldes kapital, som refererer til alle menneskeskabte ressourcer.

De tre første faktorer - landarbejde og kapital fungerer ikke uafhængigt eller isoleret. Der er behov for at kombinere disse faktorer og koordinere deres aktiviteter. Denne dobbelte funktion udføres af arrangøren eller iværksætteren.

Men dette er ikke iværksætterens eneste funktion. Faktisk kan produktion aldrig finde sted uden en vis risiko, at beslutningen om at producere noget skal tages i påvente af efterspørgsel, og der skal være et element af usikkerhed om, at den efterspørgsel bliver til noget.

Risikotagning eller virksomhed kan således betragtes som en fjerde produktionsfaktor, og de ansvarlige for at tage disse risici kaldes normalt iværksættere (se boksen herunder, der er selvforklarende). Vi kan nu undersøge karakteren og egenskaberne ved fire faktorer på baggrund af denne baggrund. Men før vi går videre, kan vi muligvis henvise til faktormobilitet.

(1) Jord og naturressourcer:

I økonomien bruges udtrykket jord i bred forstand til at henvise til alle naturressourcer eller naturgaver. Som Penguin Dictionary of Economics har udtrykt det: Land inden for økonomi forstås ikke blot at betyde den del af jordoverfladen, der ikke er dækket af vand, men også alle naturens gratis gaver såsom mineraler, jordens frugtbarhed og også havets ressourcer. Land giver både plads og specifikke ressourcer ”.

Fra ovenstående definition er det helt klart, at jord omfatter landbrug og bygningsarealer, skove og mineralforekomster. Fiskeri, floder, søer osv. Alle de naturressourcer (eller naturgaver), der hjælper os (samfundets medlemmer) med at producere nyttige varer og tjenester. Med andre ord omfatter land ikke kun landoverfladen, men også fisken i havet, solens varme, der hjælper med at tørre druer og omdanne dem til harpikser, regnen, der hjælper landmændene med at dyrke afgrøder, mineralrigdommen under jordens overflade og så videre.

Egenskaber:

Jord har visse vigtige egenskaber:

Det samlede jordareal (i betydningen af ​​det overfladeareal, der er tilgængeligt for mænd) er fast. Derfor er udbuddet af arealer strengt begrænset. Det er uden tvivl muligt at øge udbuddet af jord i en bestemt region til en vis grad ved genvinding af land fra havområder eller skovrydning. Men dette opvejes ofte af forskellige former for jorderosion. Slutresultatet er, at ændringer i det samlede areal virkelig er ubetydelige. Selvfølgelig kan den effektive forsyning af landbrugsjord (landbrug) øges ved dræning, kunstvanding og brug af gødning.

Som følge heraf har priserne på jord og naturressourcer en tendens til at være ekstremt følsomme over for ændringer i forbrugernes efterspørgsel og stige kraftigt, hvis de bliver mere ønskelige. I denne sammenhæng kan vi henvise til den kraftige stigning i prisen på byggegrunde i Bombay i de sidste fem årtier. However, new discoveries are often stimulated by high prices (as in the case of Calcutta’s Salt Lake area), and like that of oil in the U.K.’s North Sea, which tend to moderate price increases.

Although the total supply of land is fixed, land has alternative uses. The same plot of land can be used to set up factories or to grow wheat or sugarcane or even to build a stadium. This means that the supply of land to a particular use is fairly (if not completely) elastic. For example, the amount of land used for growing tomato can be increased by growing less of some other crop (e.g., cauliflower). The supply of building land can be increased by reducing the area under agricultural operation.

3. No cost of production:

Since land is a gift of nature, it has no cost of production. Since land is already in existence, no costs are to be incurred in creating it. In this sense, land differs from both labour (which has to be reared, educated and trained) and capital (which has to be created by using labour and other scarce resources or by spending money).

So, it logically follows that the entire return from land—called rent—is a surplus income (at least from society’s point of view). As Stanlake has rightly put it, “any increase in the value of natural resources due to rising populations and rising incomes accrues to the owners of these resources as a windfall gain—it does not arise from any efforts on their part”.

However, the above argument is not valid today. In fact, much of the services of land required expenditure of resources to obtain or maintain them and hence they are often called capital (i.e. produced means of production). So is land, as a factor of production, ‘really distinct’ from capital.

4. Differences in fertility:

Another important feature of land is that it is not homogeneous. All grades (plots) of land are not equally productive or fertile. Some grades of land are more productive than others. And Ricardo argued that rent arises not only due to scarcity of land as a factor but also due to differences in the fertility of the soil.

5. Operation of the law of diminishing return:

Finally, we may refer to a special feature of land, not shared by other factors. In fact, production on land is subject to the operation of the law of diminishing return. As Alfred Marshall has put it “while the part which nature plays in production shows a tendency to diminishing return, the part which man plays shows a tendency to increasing return”.

This simply means that as more and more workers are employed on the same plot of land, output per worker will gradually fall (because each additional worker will make less and less contribution to total product). The law of diminishing return refers to diminishing marginal product of the variable factor.

Land is not geographically mobile. But, it is occupationally mobile. In most parts of India, for example, land has many alternative uses. It might be used for farmland, roads, rail­ways, airlines, public parks, playgrounds, resi­dential housing, office buildings, shopping complex, and so on. Some of the land, for example, in hill area, of say, Shillong, or Darjeeling, has an extremely limited degree of occupational mobility, being useful perhaps for sheep grazing, golf course or as a centre of tourism.

The income received by the owner of land is known as rent. It may be noted that rent is usually paid for something more than the use of land or another natural resource, but includes also an element of payment for another factor which is involved in making the resource available in a usable form.

An example of this is the labour which assists in the process of bringing minerals to the surface. Iron ore is of no use while it is still under the ground. Productivity and value of land can be increased if it is improved with fertilisers, irrigation and the erection of fences and buildings. So rent paid for this kind of fertile land is rather a mixed type of factor income.

(2) Labour:

Like land, labour is also a primary factor of production. The distinctive feature of the factor of production, called labour, is that it provides a human service. It refers to human effect of any kind—physical and mental— which is directed to the production of goods and services. ‘Labour’ is the collective name given to the productive services embodied in human physical effort, skill, intellectual powers, etc.

As such, there are different types of labour input, varying in effort and skill content, and in particular types of skill content. Thus, like ‘land’, labour is not homogeneous. The term covers clerical, managerial and administrative functions as well as skilled and unskilled manual work.

Labour differs from land in an important way. While land is a stock, labour is a flow. The term ‘labour’ is used to refer to the flow of labour service per unit of time. So labour is perishable. If we do not make use of today’s labour power, a correspondingly large amount is not made available tomorrow (and in future).

A related, but important point should be noted in this context. The worker sells his services in the market, but retains his capital (working ability). In other words, what is bought and sold is the service of labour, not labour itself. A firm cannot buy and sell labour in the same way that it can buy land and capital.

Another important point to note is that labour is not only a factor of production. The supplier of labour—the worker—is also a consumer. Thus, labour plays a dual role in a modern economy. Labour is both the subject and the object of production.

This means two things:

(1) That the production of anything requires the use of labour as a factor, and

(2) That almost everything is produced to satisfy the needs of the workers, who are the main consumers. In fact, any economic activity takes place to satisfy the consumers. And, consumption demand provides the business people with the incentive to undertake production.

Peculiarities of Labour as a Factor:

In examining labour markets, it is important to recognise that labour has a number of special characteristics which distinguish it from ordinary commodities.

1. First, labour market transactions are particularly significant for:

First, labour market transactions are particularly significant for the individual worker. Much of a person’s life style and relations with other people depend on the job he or she does. Furthermore, the employment of labour involves a continuing personal relation­ship between employers and employees, whereas transactions in market for goods are often brief and impersonal.

2. Labour is an end and means in itself:

A commodity is only a means of production and the object of production is its consumption by labour. Labour, therefore, becomes a means to its own end.

3. Thirdly, the individual sells his services but not himself:

The employer, however, must be able to exert some control or authority over the actions of employees. This is not a very simple matter, which can be covered unambiguously by a contract of employment. A great deal of energy has been devoted to planning systems for the direction of employees, and even a brief examination of the state of industrial relations in most countries shows that still much remains to be done.

4. Labour is inseparable from the labourer:

In other words, labour and the labourer go together. When the seller sells a commodity he does not necessarily go with the commo­dity. But the labour can supply his labour only when he goes with it. Moreover, when a seller sells a commodity he parts with it. But when a labourer sells his labour, he retains the quality with him. He may gain the satisfaction of his services, but he cannot be separated from the labour.

5. Fifthly, the individual must be present when the labour services are used and thus a fifth feature is that labour services are not transferable:

For example, a person who has agreed to carry out certain tasks cannot transfer his services to someone else to do the work, while he does something else. This contrasts with commodities which can be transferred among individuals.

One conse­quence of having to ‘deliver’ the services personally is that employees have strong views on how their services should be used. Working conditions are of central importance to workers. It also means that workers must live near their place of work. The location may significantly affect labour market decisions.

6. Sixthly, labour services cannot be stored:

Labour cannot be ‘saved’ or stored for future use (although rest may enhance performance to some extent).

7. Labour is perishable:

A commodity, if it is not disposed off today, can be disposed off the next day and it may not lose its value. Labour, however, is perishable in this that if the labourer is not able to sell his services for a day he cannot get the value for that day. It is lost forever it is because of this that labour has a weak bargaining power.

8. Labour is affected by surroundings:

A commodity is usually very much affected by its surrounding a labourer is very much affected by the surroundings because he is a living being. Therefore, any change in atmos­phere has an effect on his health feelings etc.

9. The supply of labour is independent of its demand:

In case of most commodities we see that supply usually varies with demand but in case of labour its supply is in no way related to demand. Both are determined by different factors.

10. Finally, labour services are enhanced by training:

Skill acquisition is often a lengthy and costly process. However, adjust­ments in the labour market, such as increasing the supply of a particular skill, often requires a long time. This also means that individuals do not usually train for more than one occupation as they only have a limited working life over which to justify the investment.

Mobility of Labour:

The mobility of labour has two aspects:

(a) The spatial or geographical mobility of labour, which relates to the rate at which workers move between geographical areas and regions in response to differences in wages and job availability (e.g., a worker from West Bengal moving to Mumbai) and

(b) The occupational mobility of labour which relates to the extent to which workers change occupations or skills in response to differences in wages or job availability (e.g., a jute mill worker joining a tea garden).

It may apparently seem that labour is the most mobile of all factors—both occupationally and geographically. Workers can move both freely from one industry to another and from one region to another.

The reward or price that is paid to labour in return for the services it performs is known as a wage or salary. A man’s wages are asso­ciated with his productivity or efficiency and this, in its turn, depends on a variety of factors including the education and job training he has received, his innate skill and the extent to which he is motivated to put his best effort in the work he is doing.

In general, the supply of labour varies directly with wages and compensation. Normally, when wages are relatively low, increases in wages will tend to lead to an increase in the supply of labour. However, as wages continue to rise a stage ultimately comes when higher wages (incomes) make leisure more attractive.

When incomes are relatively high, therefore, higher wage rates may actually lead to a fall in the number of hours worked (and, thus, in the amount of labour offered by an individual worker.) This is why the supply curve of labour bends back to the left and this is often cited as an important exception to the (empirical) law of supply.

(3) Capital:

Capital, the third agent or factor is the result of past labour and it is used to produce more goods. Capital has, therefore, been defined as ‘produced means of production.’ It is a man-made resource. In a board sense, any product of labour-and-land which is reserved for use in future production is capital.

To put it more clearly, capital is that part of wealth which is not used for the purpose of consumption but is utilised in the process of production. Tools and machinery, bullocks and ploughs, seeds and fertilizers, etc. are examples of capital. We have already identi­fied certain things described as capital in our discussion on producers’ goods.

Even in ancient times, capital was created for producing food, hunting animals and for the transportation of goods. At that stage capital goods consisted of simple tools and implements. Even in the least developed countries some capital is used. In such countries people make use of simple ploughs, axes, bows and arrows, and leather bags to carry water.

It may be pointed out in this context that the same article may, at one time, be a con­sumption good and, at another time, capital, depending on the use to which it is put. Thus, if a doctor goes out in his motor car to examine a patient he is using his car as capital. But if he goes out for a joy ride in his motor car, he is using it as a consumption good. Similarly, when coal is used in a factory, it is capital, but when coal is used as domestic fuel, it is a consumption good.

Economists use the term capital to mean goods used for further production. In the business world, however, capital is always expressed in terms of money. If a business­man is asked, “What is your capital?” he will always mention a sum of money. But money is not capital because money, by itself, cannot produce anything.

The business-person thinks of money as capital because he can easily convert money into real resources like tools, machines and raw materials, and use these resources for the production of goods. Also capital is measured in terms of money. So the amount of resources used or possessed by a business-person is conveniently expressed as a sum of money.

Classification of Capital:

Capital can be classified in two broad categories that which is used up in the course of production and that which is not.

Fixed and Circulating Capital:

Fixed capital means durable capital like tools, machinery and factory buildings, which can be used for a long time. Things like raw materials, seeds and fuel, which can be used only once in production are called circulating capital. Circulating capital refers to funds embodied in stocks and work-in- progress or other current assets as opposed to fixed assets. It is also called working capital.

Two Features of Capital:

Two important features of capital are:

Firstly, it entails a sacrifice, since resources are devoted to making non-consumable capital goods instead of goods for immediate con­sumption. Secondly, it enhances the producti­vity of the other factors, viz., land and labour.

In fact, it is this enhanced productivity which represents the reward for the sacrifice involved in creating capital. Hence we can predict that new capital is only created so long as its productivity is at least sufficient to compensate those who make the sacrifices involved in its creation. These two features may now be discussed in detail.

Capital Formation:

People use capital goods like machines, equipment, etc. because capital goods are the creators of other goods. But this is not the whole truth. People use capital for another important reason to produce goods with less effort and lower costs than would be the case if labour were not assisted by capital. But in order to use capital goods people must first produce them. This calls for a sacrifice of current consumption.

When people use their labour to produce capital goods like textile producing machines, they can use the same labour for producing consumer goods like textiles. As Stanlake has put it “The opportunity cost of the capital goods is the potential output of consumer goods which has to be foregone in order to produce that capital, the production of capital demands abstinence from current consumption.”

Factors Affecting Capital Formation:

The creation of capital depends on two things:

(a) Savings and (b) a diversion of resources (from the production of consumption goods to meet current needs to the production of capital goods to meet future needs). Saving is the difference between current income and current consumption. In other words, it is the act of foregoing current consumption.

It means that resources otherwise used to produce consumer goods are set aside for producing capital goods. If people choose not to buy some consumer goods, with some part of their current income, they refrain from buying (utilising) the services of the factors required to make those goods.

These factors might, therefore, remain idle. But these savings may be borrowed and utilised by business firms (entrepreneurs) to finance the construction of capital goods. This is the second step—the diversion of resources for the production of consumer goods to the production of capital (producers) goods. It may be noted that savings make possible capital accumulation. It does not cause it.

In short, capital formation depends on savings, which, in its turn, depends on two things:

(1) The capacity to save and

The capacity to save depends on income and the existence of savings institutions like banks, insurance companies, post offices, stock exchanges, etc. If income is low, savings will also be low. Even if income is high savings will be low in the absence of the above-mentioned savings institutions.

The desire to save depends on

(1) the rate of interest and (2) stability in the value of money (i.e., the rate of inflation).

If the rate of interest is high people will be eager to save more by curtailing their current consumption. People will also be eager to save more if they expect that there will exist reasonable price stability in the economy in future.

Mobility of Capital:

Capital is both geographically and occupationally mobile. However, a certain portion of a nation’s capital stock which consists of such things as railway networks, blast furnaces and shipyards are highly specialised equip­ment and are virtually immobile in the geo­graphical sense. It is physically possible to dismantle them and move them to different sites or locations, but the cost of doing so will be so great that it will not be economically feasible to do so.

Such equipment are not even occu­pationally mobile. Each such equipment can only be used for a specific purpose. Many buildings however, can be put to better uses. Many of the old buildings used as cinema house or god-owns in northern area of Calcutta have been dismantled and converted into multi-storeyed buildings.

Some capital equip­ment is mobile in both the geographical and occupational sense. Examples of such capital equipment are electric motors, machine tools, hand tools, typewriters, and lorries. Such equipment can be used effectively in a wide variety of industries and are capable of moving from one location to another at very little cost.

The earning of capital, i.e., the price that has to be paid for it, is known as interest. If it stated as percentage of the principal, represen­ting the sum paid by a borrower who needs finance to purchase a piece of capital equip­ment.

(4) Enterprise (Organisation):

Organisation, as a factor of production, refers to the task of bringing land, labour and capital together. It involves the establishment of co-ordination and co-operation among these factors. The person in charge of organisation is known as an organiser or an entrepreneur. So, the entrepreneur is the person who takes the charge of supervising the organisation of production and of framing the necessary policy regarding business.

Functions or Role of the Entrepreneur:

The entrepreneur in modern business performs the following useful functions:

The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is to determine what to produce, how to produce, where to produce, how much to produce, how to sell and so forth. Moreover, he is to decide the scale of production and the proportion in which he combines the different factors he employs. In brief, he is to make vital business decisions relating to the purchase of productive factors and to the sales of the finished goods or services.

Earlier writers used to consider management control one of the chief functions of the entrepreneur. Management and control of the business are conducted by the entrepreneur himself. So the latter must possess a high degree of management ability to select the right type of persons to work with him. But the importance of this function has declined, as the business nowadays is managed more and more by paid managers.

The next major function of the entrepreneur is to make necessary arrangement for the division of total income among the different factors of production employed by him. Even if there is a loss in the business, he is to pay rent, interest wages and other contractual income out of the realised sale proceed.

4. Risk-taking and uncertainty-bearing:

Risk-taking is perhaps the most important function of an entrepreneur. Modern production is very risky as an entrepreneur is required to produce goods or services in anticipation of their future demand. Broadly, there are two kinds of risk which he has to face.

Firstly, there are some risks, such as risks of fire, loss of goods in transit, theft, etc., which can be insured against. These are known as measurable and insurable risks. Secondly, some risks, however, cannot be insured against because their probability cannot be calculated accurately. These constitute what is called uncertainty (e.g., competitive risk, technical risk, etc.). The entrepreneur under­takes both these risks in production.

Another distinguishing function of the entrepreneur as emphasised by Schumpeter, is to make frequent inventions- invention of new products, of new techniques and discovering new markets—to improve his competitive position, and to increase earnings.

Importance of Enterprise:

The above description indicates the supreme position of the entrepreneur in production. This is particularly true in the capitalistic or even mixed economy which is based on the price-profit system. In the socialistic eco­nomy, the state becomes the entrepreneur the scope of private entrepreneur is extremely limited in such an economy.

It is to be noted that the importance of the entrepreneur has been declining with the growth of joint-stock business and state-undertakings. This is due to the fact that risk is borne by the share­holders and the day-by-day control of the business is generally in the hands of salaried managers or managing directors.

A Separate Factor:

Some economists feel that the above entrepreneurial functions are no different from those of a particular and specialised form of labour. They point out that risk- bearing is not something peculiar to the entrepreneur.

Many types of labour have to take risk. For example, the miner or the air- hostess runs the risk of personal injury and life and most forms of labour run the risk of unemployment. But enterprise is a separate factor because the first three factors are substitutable to some extent, but the fourth factor is a specific factor and cannot be substituted by any other factor.

Enterprise seems to be the most mobile of all the four factors. There is need to train labour for some specific task to be performed in a particular industry (say, road transport service, hotel business or computer operation). Once labour is trained for some specific task appropriate to some particular industry, it cannot be easily and quickly transferred to some other industry to do a completely different job. But the basic functions of the entrepreneur-organisation, management and risk-taking are the same in all industries.

Whatever the nature, duration and extent of economic activity and entrepreneur has to raise capital to organise the factors of production, and take certain fundamental decisions on what, how and where to produce. The efficient operation of an enterprise, irrespective of its nature and form, depends on certain human relations and human qualities such as initiative, leadership orga­nisational ability and controlling capacity.

Very few people have these rare qualities. But those who have such qualities are able to operate effectively and efficiently in almost any industry.

The return to the entrepreneur is profit. Profit is the reward for successful conduct of business.


Why a Good Return Policy Is So Important for Retailers

For obvious reasons, most stores focus on practicing good customer service specifically to enhance sales. But customer service doesn’t end once a purchase is made. Or at least it shouldn’t. The return—that moment when the customer effectively tells the store that the sales transaction was a failure, that they found something better, or a better price—is a test for retailers. And according to my research, it’s a test that retailers often fail. When that happens, shoppers feel tricked, and business suffers.

As a consumer psychologist, professor, and retail consultant, I often interview consumers about their shopping experiences. Sometimes the interview occurs in a formal setting other times, it’s just a casual conversation in the mall. I always promise to keep last names private, with the hopes of getting the most honest answers possible. Over the years, what they’ve told me again and again is that they feel the retailer-customer relationship is just that—a genuine, personal forhold—and that a violation of trust via a bad return experience can ruin this relationship forever.

For example, Rae, a single woman of mixed race woman in her mid-30s, once had to make an emergency purchase at an Apple store in Canada when she forgot the connector that would allow her to play a business presentation. Turns out she didn’t need the connector after all, and wound up trying to return the unopened item at an Apple store in the U.S. “They wouldn’t take it back because I bought it in Canada. That’s just crazy. Aren’t they supposed to be a modern, international brand? Liars.” Rae, who says she has “just about everything Apple makes,” lost her devotion over a measly $35 purchase that Apple refused to allow her to return. “It’s not the money,” she says, “it’s the bull****.”

Many stores have tough return policies. The big problem here is that, in this instance, Apple’s reputation as a worldly brand with outstanding customer service didn’t match the customer’s experience. Apple fell well short of what the customer expected, and the customer felt burned.

Similarly, when Janine, an African-American woman in her 50s, goes to the mall these days, she walks right by a once-favorite store, Williams Sonoma. Hvorfor? She wasn’t able to return a gift without a gift receipt. Janine shops at lots of other stores that won’t take returns without receipts, but Williams Sonoma is the only one that gets her cold shoulder. That’s because for years Janine says she had “paid top dollar at Williams Sonoma,” and she’d expected that due to her loyalty as a customer, as well as the amount of money charged by the store, the retailer would have a more flexible return policy. “They put on this air of graciousness,” Janine says, “but they’re acting like a discount store. The sales clerk looked kind of smug about the new policy too—like I was cheap or dishonest or something.”

The tone struck by Rae and Janine isn’t mere annoyance. It suggests deep betrayal. Janine’s longstanding relationship with Williams Sonoma was severed by what she perceived to be a breach of promise, and a sales clerk with bad manners delivering the blow made it all seem very personal. If her sense of fairness hadn’t been violated, she would have happily continued to shop at the store.

If retailers are losing customers over restrictive return policies, why are they putting these policies into practice? The answer is that returns are costly, and stores try to control costs by restricting returns. Returns are also on the rise—up 19% from 2007. For every $1 spent on merchandise today, 9¢ is returned.

What retailers are discovering is that they must walk a fine line. A simple and easy return policy boosts sales, as shoppers are more willing to make purchases with the knowledge that returning them won’t be a hassle. On the other hand, if too many returns are made, it causes havoc to the retailer’s bottom line. There’s a dance going on because authenticity, transparency and “living up to promises” are important values to consumers. Retailers use imagery, emotion, and symbolism to craft an enticing image—which becomes the personality of the store. That image is an unspoken promise of a particular type of shopping experience. It’s the retailer’s job to ensure that every consumer touchpoint lives up to the promise of a store’s image, including returns.

Several online retailers have found that it’s wise to be especially accommodating with returns. Shoe and clothing e-seller Zappos offers free shipping on deliveries and returns, as well as a return policy that’s as hassle-free as they come. They’ve built a wildly popular business, in part, on the philosophy that frequent returners are also frequent buyers.

Most retailers aren’t as accommodating, and feel like they must not only manage the financial impact of rising returns, but cope with mushrooming incidents of fraudulent returns as well. Last year, retailers reportedly lost $14.4 billion (up from $9.4 billion in 2009) to fraudulent returns such as wardrobing, in which people buy products like big screen televisions or party dresses to use for an event, and then return them. One couple in their late 40s proudly told me that they found a way to “rent” boogie boards for free when they visited Hawaii recently. “We bought two at Costco and then returned them before we went home,” the woman said. Another woman explained how she took advantage of Nordstrom’s returns system. She bought three bras from the retailer, but then lost weight after she’d worn them for a while. “So I took them back and exchanged them for my new size.”

We all pay the price for such consumer behavior, as stores take new measures to protect themselves. Some have begun to track shopper returns in order to restrict serial returners — or “returnaholics,” as they’ve been called. Others have shortened the time permitted to make returns or have ramped up requirements for receipts and I.D. Many electronics retailers charge a “restocking fee” for returns. And some stores hang conspicuous tags on clothing or stickers on electronics to prevent wardrobing. These new procedures and policies can feel confusing, even maddening, to shoppers.

While stores are doing what they can to protect themselves, shoppers must do so as well. Making an impulsive purchase with the thought that “I can always return it, no problem,” was probably never a good idea, and what with the rise of tougher return policies, it’s an even worse approach nowadays. Besides being more careful with what you buy in the first place, here are a few simple tips shoppers can take to minimize the agony of store returns:

1. Always check the retailer’s return policy. This is especially important when shopping online. In particular, discount retailers often don’t take returns or will offer a merchandise credit, but not a refund.

2. Keep tabs on receipts. Attach your receipt to your purchase and don’t remove tags until you’re sure you’re going to keep it. Store all your receipts in the same place in case the product is defective. If you lose your receipt, you can sometimes locate a record of your transaction online. Retailers have found that over 14% of returns without receipts are fraudulent and are therefore increasingly requiring receipts for returns.

3. Be prepared before bringing in a return. Preparation lessens the likelihood of conflict and speeds up the return process. Bring your receipt and I.D., and treat the merchandise you’re returning with respect. Says Bridgette, who works at Bloomingdales, “It’s disappointing to send someone off with their purchase nicely pressed and on a hanger, and then to have it returned in rumpled ball.”

4. Hold the emotion. Though you’re sure to occasionally encounter disrespectful salespeople (especially at commission-based stores), it won’t help to get angry or emotional. You also don’t have to be apologetic. Unless you’re a serial returner or have worn or damaged the merchandise, it’s your right to return it.

5. Don’t delay. Because of mounting returns, many retailers have shortened the time period after a purchase that they’re willing to accept a return. Often, the window is just 20 or 30 days.

Kit Yarrow chairs the Psychology Department of Golden Gate University and was named as the university’s 2012 Outstanding Scholar for her research in consumer behavior. Hun er medforfatter til Gen BuY og taler ofte om emner relateret til forbrugerpsykologi og generation Y.


Historical Changes in Retail

Prior to the 1800s retail was predominantly made up of local merchants who provided full service to customers, think of the classic “general store” in any old western movie. This full service often included offering credit, repairs, and offering one-on-one services to consumers to explain the features and benefits of products. Yet, breakthroughs in manufacturing during the industrial revolution lead to a marked increase in affordable quality items. In the early United States textile industry factories began to manufacture their-own ready-made clothes. Affordable blouses, frocks, pants and shirts flooded the market and these ready-made garments sold quickly. The quandary facing mill and factory owners was how best to market these items.

Two retail options existed at that time. The first, involved selling items directly to consumers through company-owned stores. The second option involved employing a commissioned agent in which a company agent would be responsible for delivering manufactured goods to shopkeepers who, in turn, would sell them. The question facing manufacturers and merchants was which option best suited their needs? Customers let it be known that they wanted ready access to a wide assortment of reasonable priced items, and that they were willing to pay a pretty penny for this service. Shoppers’ demands posed an interesting challenge to manufacturers and shopkeepers alike which lead to a new form of retailing: the department store.

Business historians often credit a Parisian retailer named Aristede Bouciaut (1810-1877) for developing the first department store. Called Le Bon Marche, this establishment featured the latest fashions and accessories within a spectacular setting. Early 19th century U.S. retailers from Boston to Richmond and from New York to Chicago quickly adopted Le Bon Marche layout and services and the modern department store was born. Large downtown department stores in major metropolitan city centers dominated retailing well into the post-war era.

In the 1950s, over 4,000 department stores operated nationwide with many new stores opening in suburban areas. Yet, by the mid-1960s, over half of the post-war department stores had closed their doors. This was especially noticeable in medium-sized U.S. cities many of which only had one or two downtown stores. The next three decades prompted further department store closings.

During the 1970’s many department stores closed and were replaced by discount department stores, shopping centers and large malls which soon accounted for 35% of the entire U.S. retail market. Discount department stores in particular, represented the fastest growing part of this phenomenon with annual profits exceeded $20,000,000,000. Customer loyalty soon became a relic of the past. Savvy new shoppers were more than willing to sacrifice the amenities of downtown department store for cheaper prices. Self-service stores with long check-out lines, indistinguishable departments and aisle upon aisle of items of picked-over garments became the norm, not the exception to the rule.

Fast forward to the 1990’s where the utilization of the Internet drastically impacted the retail industry and continues to drive product and marketing innovation to this day. The Internet has transformed how retailers and consumers view the intersections of product, place, price and time. Shoppers now have nearly unlimited access to an unprecedented assortment of products and their purchases are not restricted to a physical “bricks-and-mortar” place or store hours. With a few clicks shoppers can compare prices of goods faster and more efficiently than before. Furthermore, retailers recognized that e-commerce allows for the optimization of inventories while selling a wide range of profit margin goods.

Online shopping allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product’s availability and pricing at different e-retailers. As of 2016, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

An online shop evokes the physical analogy of buying products or services at a regular “bricks-and-mortar” retailer or shopping center the process is called business-to-consumer (B2C) online shopping. When an online store is set up to enable businesses to buy from another businesses, the process is called business-to-business (B2B) online shopping. A typical online store enables the customer to browse the firm’s range of products and services, view photos or images of the products, along with information about the product specifications, features and prices.

The popularity and pervasiveness of online shopping shows no signs of slowing down which is putting traditional retailers in a unique position. How can brick-and-mortar stores integrate e-commerce strategically and successfully? In what ways will online retailers emulate brick-and-mortar stores as seen in the trend of popular online stores opening pop up shops for customers to shop in person. By having a better understanding of past industry trends and challenges, modern retailers can learn from their successful predecessors while also blazing a new trail forward.

Highly Recommended Additional Resources

Practice questions


In 1965, Yale University undergraduate Frederick W. Smith wrote a term paper that invented an industry and changed what’s possible. In the paper, he laid out the logistical challenges facing pioneering firms in the information technology industry. Most airfreight shippers relied on passenger route systems, but those didn’t make economic sense for urgent shipments, Smith wrote.

He proposed a system specifically designed to accommodate time-sensitive shipments such as medicine, computer parts, and electronics. Smith’s professor apparently didn’t see the revolutionary implications of his thesis, and the paper received just an average grade.

In August 1971, following a stint in the military, Smith bought controlling interest in Arkansas Aviation Sales, located in Little Rock, Arkansas. While operating his new firm, he saw firsthand how difficult it was to get packages and other airfreight delivered within one to two days. With his term paper in mind, Smith set out to find a better way. Thus the idea for Federal Express was born: A company that has revolutionized global business practices and that now defines speed and reliability.

Smith named the company Federal Express because he believed the patriotic meaning associated with the word “federal” suggested an interest in nationwide economic activity. He also hoped the name would resonate with the Federal Reserve Bank, a potential customer. Although the bank denied his proposal, Smith kept the name because he thought it was memorable and would help attract public attention.

Company headquarters later moved to Memphis, Tennessee. Memphis was chosen because of its central location within the U.S. and because Memphis International Airport was rarely closed due to bad weather. The airport was also willing to make the necessary improvements for the operation and additional hangar space was readily available.

Federal Express officially began operations on April 17, 1973, with 389 team members. That night, 14 small aircraft took off from Memphis and delivered 186 packages to 25 U.S. cities from Rochester, New York, to Miami, Florida. Though the company did not show a profit until July 1975, it soon became the premier carrier of high-priority goods in the marketplace and set the standard for the express shipping industry it established.

In the mid-1970s, Federal Express was a leader in lobbying for air cargo deregulation, which was legislated in 1977. These changes were important, because they allowed the company to use larger aircraft (Boeing 727s and McDonnell-Douglas DC-10s) and spurred its rapid growth. Today FedEx Express has the world’s largest all-cargo air fleet, including Boeing 777s, 767s, 757s, and MD-11s and Airbus A-300s and A-310s.

By the 1980s, Federal Express was well established. Its growth rate was compounding at about 40 percent annually, and competitors were trying to catch up. In fiscal year 1983, it reported $1 billion in revenues, making American business history as the first company to reach that financial hallmark inside 10 years of startup without mergers or acquisitions.