When last summer my father gave a few kilograms of ‘Black-eyed beans’ to my grandmother, she did not consume them rather sown them in her field. At end of the Kharif season, she had more than 40kgs of these beans. She returns to father way more than what he gave her also saved some for next season.
If she would have monetized the whole process, she would have earned a good margin of profits but she chose not to. After every harvesting, she sells other crops like wheat, mustard seeds, vegetables, ghee, etc., Like so many other farmers, small vendors, and many others she very well understands that one ‘core principle’ of business i.e., BUY CHEAP, SELL DEAR. It has two components 1. Buy cheap (Cost) 2. Sell Dear (Price)
Let alone going to B-school she never even picked up pen and paper to write anything yet this one simple-universally-applicable concept is so nicely and deeply engraved in her mind, albeit, she takes the help of my uncle for larger mathematical calculations.
If this concept is so simple and pervasive and well understood by so many simple people like my grandmother, why do we enroll ourselves in so many expensive business courses? Are we constantly endeavoring just to understand this one simple concept or there is more to it?
Allow me to share with you my observation, this ‘core principle’ is already very innately understood by most of us. However, what we don’t understand is many ‘peripheral concepts’ which are required to support the very ‘core principle’. Unlike ‘core principle’ these concepts are flexible, mouldable, and certainly not universal for all businesses.
In B-schools you study operations so as to make the supply chain more resilient and efficient in order to mitigate the cost, marketing as to sell your product at the desired price, finance to search for most profitable avenues (i.e., the maximum gap between two components), accounting standards so as to make business’s finances understandable and presentable to other stakeholders (like taxing and law enforcement agencies, investors, etc.,), business law so as to comply with law of land.
Am I suggesting that these ‘peripheral concepts’ are not important? No, they are important but not indispensable, your business has the possibility to survive even if you violate some of these ‘ peripheral concepts’ but can’t if you infringe the very ‘core principle’.
What if your business does not follow laws enacted by parliamentarians, it will be illegal, right? Even if you contravene these laws does not mean you have broken the ‘core principle’. Laws are made for societal purposes so as ‘big fish does not eat small fish’ by employing unfair means. An illegal business can very well be profitable and prospering.
Another example, what if you don’t employ accounting standards and devise your own unique way of accounting? Your business can still survive, right? the only impediment is other stakeholders might not understand your business’s finances.
You don’t go to B-school to learn the one ‘CORE PRINCIPLE’ rather go to learn many ‘PERIPHERAL CONCEPTS’ to support it.