Not all business principles are universally applicable.Īt the final level, entrepreneurs find standards. To counter this lack of economy of scale, professionals simply charge more per hour. It is difficult to acheive economy of scale with many of the licensed professions. How does one create more hours or have the artist produce more potraits within the artist’s labor hour? This is also true with professionals. There is no economy of scale related to the artist’s time. To illustrate, think of an artist painting custom potraits as a business. In effect, business fundamentals are not universal whereas, tenets are universally applicable.Īs an example, a common misconception is that the business principle of ‘Economy of Scale’ is applicable across the board. These rules, guidance and thoughts are not necessarily true and applicable to every economic sector and to every industry within that sector. The second level reflects fundamentals of business.
These tenets are applicable to every business, every transaction and every decision made by the management team. The first level is actually a set of tenets for business.
There are three levels of business principles.
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