Saturday, July 17, 2021

MEANING AND CHARACTERSTICS OF BUSINESS

 

     MEANING AND CHARACTERSTICS OF BUSINESS

     BUSINESS STUDIES PLUS ONE COMMERCE

     DR SHASHI AGGARWAL

     BUSINESS CONCEPT

1.       Every human being is required to undertake some work for earning his or her living

2.       Some activities may be undertaken to satisfy religious, social,cultural,psychological or sentimental reasons

3.       Some activities may be taken to earn a living called economic activities

4.       The economic activities comprise business, profession, employment and are taken up to earn profit or living

5.       Business activities may be classified into industry, commerce

 

 

     BUSINESS CONCEPT

1.       Industry converting raw materials into useful goods whereas commerce helps in taking goods and services from producers to users

2.       Industry may be primary. Secondary or tertiary and commerce includes trade or aids to trade

3.       A business has to undertake a number of functions which facilitate the production and distribution of goods and services

     ECONOMIC ACTIVITIES AND NON ECONOMIC ACTIVITIES

     ECONOMIC ACTIVITIES: All activities undertaken with the object of earning money are called economic activities. Economic activities are concerned with the production and distribution of goods and services for sale at profit. These activities aim at proper allocation and optimum use of resources and aim to maximize the satisfaction or profit or welfare

     NON ECONOMIC ACTIVITIES:

  1. are those activities which are pursued because of social,religious,cultural,psychological or sentimental  reasons.
  2. These activities have no economic motive but are undertaken to have self satisfaction
  3. These activities are voluntary in nature and are undertaken at the leisure or pleasure of the persons pursuing them.

     MEANING AND CHARACTERSTICS OF BUSINESS

  1. Business literally means a state of being busy
  2. In a specific sense ,business refers to any activities in which people regularly with a view to earning profit
  3. All those activities which are concerned with production and or purchase and sale of goods and services with the purpose of selling them at profit are business activities.
  4. The activities connected with manufacturing, trading, finance., transport, banking, insurance,warehousing,advertising form a part of business.
  5. Business may be defined as human activities concerned with production and or exchange of goods and services with a view to gain or profit.

     DEFINITION OF BUSINESS

   L.H ELANEY: BUSINESS MAY BE DEFINED AS HUMAN ACTIVITIES DIRECTED TOWARDS PROVIDING OR  ACQUIRING WEALTH THROUGH BUYING AND SELLING GOODS

   PETERSON AND PLOWMAN: BUSINESS MAY BE DEFINED AS AN ACTIVITY IN WHICH DIFFERENT PERSONS EXCHANGE SOMETHING OF VALUE WHETHER GOODS OR SERVICES FOR MUTUAL GAIN OR PROFIT.

 

     CHANGING DEFINITION OF BUSINESS IN MODERN TIME

1.       In modern times business is no longer dealing with goods or services

2.       It can not be defined in terms of profits only

3.       Society expects an important role from business at present

     Following activities have also become an important part of business :

a)       Providing goods and services as per the preference of  customers

b)       Constant upgradation of technology and production processes

c)       Make innovative products

d)       Undertake social responsibility

     NATURE/CHARACTERISTICS

  1. ECONOMIC ACTIVITIES: Business is an economic activity which is undertaken with the object of earning money or livelihood.
  2. Production/procurement of goods and services : business either produces or procures goods and services for offering them to customers. Goods may be consumer’s goods or producer goods
  3. Satisfaction of human needs: business involve sale or exchange of goods and services. The sale or exchange for a price is the basic feature of business. Purchase of goods or services for personal consumption is not business.

 

  1. Deals in goods and services on a regular basis: dealing in goods and services becomes business only. If undertaken on a regular basis
  2. Profit earning:  The main purpose of business activity is to earn profits
  3. Uncertainty of return : It is not possible to predict how much a profit a businessman will earn
  4. Element of risk: Uncertainty is present in every economic activity.

 

 

MCQ FOR UGC NET COMMERCE AND MANAGEMENT (2)