Unit -1 | NATURE AND SCOPE OF BUSINESS
1.2 HUMAN ACTIVITES :-
• Human Activites :-
→ All teh activites performed by human day to day life is known as human activites.
→ Example,
(1) In morning we brush our teeth,
(2) We working in our office, etc.
• Types of human activites are :-
(1) Non-economic Activites :-
→ These activites conducted by human beings due to live and affection, social obligation, religious obligation, physical requirements, patrotism (Desh-prem) etc.
→ Not for earning money.
→ Example,
(1) Mother cooking foods for childrends.
(2) People going to temple or mosque for prayer/ worship.
(2) Economic Activites :-
→ The main purpose of this activity is to earn money.
→ You do whatever you know but for earn money.
→ Example,
(1) An employees going to office.
(2) A teacher working in a school.
• Classification of Human Activites :-
(a) Business :-
→ Any activity performed or produced (by human) with the main aim of earning profit and satisfying customers/ consumers is known as business.
• Ex. Sale of eggs, Production of soaps etc.
(b) Profession :-
→ An activity which involves the rendering of personalised service of a specialised nature, based an professional knowledge, eduaction and training is called a profession.
• Ex. Services rendered by doctors, lawyers, CA etc.
(c) Employment :-
→ Any activity assigned to a person by the employees (boss) under an agrement or rules of service comes under the category of employemnt.
→ A person who undertakes such activity is called employee.
→ Employee receives salary, bonus, allowance etc for performing activites.
• Ex. Salesman selling goods in a store.
→ Here the store manager or owner is the emplyer adn salesman is the empolyee.
1.3 BUSINESS :-
→ An activity performed or produced (by human) with the main aim of earning profit and satisfying customers/ consumers is known as business.
→ A firm formed for the purpose of carrying a business activity is called a business enterprise or a business firm.
• Essential features of Business :-
(1) Dealings in goods and services
(2) Production and/ or exchange
(3) Continuity and regalarity in dealings
(4) Profit motive
(5) Element or risk.
• Objectives of Business :-
(1) Economic Objectives :-
→ Primary objectives of business are economic.
→ Some main economic objectives are :-
(a) Earning of satisfactory profits.
(b) Emploring new markets and creation of more customers.
(c) Growth and expansion of business operations of the firm.
(d) Making innovations and improvements in goods and services so that cumstomers get improved and more economic goods and service.
(2) Social Objectives :-
→ Some major social objectives are :-
(a) Providing more and more employment apportunities to the people in the country.
(b) Supply of quality goods to the community.
(c) Providing goods at reasonable prices.
(d) Ensure fair returns to investors.
(e) Avoidance of profitering and unfair practices interest and priorities.
(3) Human Objectives :-
→ Business activity is generally, carried out through employees who are human beings.
→ Some of the major human objectives are :-
(a) Fair deal to empolyee is terms of wages and incentives.
(b) Providing better working conditions and environment to the employees.
(c) Provide job satisfaction.
(d) Provide the employees more and more promotional/ growth apportunities.
1.4 INDUSTRY :-
→ Industry refers to that part of business activites which is concerned with the production of want satisfying goos through utilisation of available material resources.
→ Industry activity aims at ensuring the supply of goods in that form which suits the objects, needs and convenience of the persons expected to use them.
→ Example, Farms, factories, mines etc., make available a wide range of goods.
→ These goods cater to the needs convenience of the people.
• Classification of Industry :-
(1) On the basis of nature of activity :-
(a) Extractive Industry :-
→ Extraction of the natural resources like minerals, animals, plants, trees etc. from the surface air or water come under this category.
(b) Genetic Industires :-
→ In this categroy activites like reproducing and multiplying plants and animals with the objective of earnings profit from their sale comes.
→ Example are poultry farms, cattle breeding farm, nurseries etc.
(c) Manufacturing Industires :-
→ These types of indrustires are engaged in the conversion or transformation of raw-materials and semi-finished materials into finised products.
→ Example, Suagar industry, cotton textile industry.
(d) Construction Industires :-
→ These indrustires are engaged in the construction activites like the construction of buildings, bridges, dams, roads, canals, railway lines etc.
1.5 COMMERCE :-
→ All the activites which estabish link between the producers of goods and consumers of these goods, and maintain a smooth and uninterrupted flow of goods between them come under commerce.
→ In other way commorce is defined as the exchange of goods and services between two or more entities.
→ We can classify the whole range of commerce activites into the categories :-
(1) Trade :- activites of purchase and sale.
(2) Aids to Trade - activites which facilitate the smooth and uninterrupted flow of goods.
• Trade :-
→ Trade includes sale, transfer or exchange of goods and services with the intention of earning profit.
→ The objectives of trade is to make good available to those persons who need them and ar willing to pay for them.
→ We can classify trade into two categories:-
-
(1) Internal trade :-
→ When the trade takes plac within the boundaries of the country.
→ It means both buying and selling take place within the country.
(a) Wholesale trade :-
→ Buying and sellign in relatively larger quantities is called wholesale trade.
→ A person who is involved in wholesale trade is called wholesaler.
(b) Retail trade :-
→ This refers to buying and selling in relatively smaller quantities.
→ A person engaged in retail trade is called in retailer.
(2) External trade :-
→ When the trade made take place across the boundaries of a country.
→ Alos called 'foreign trade' or 'international trade'.
→ Exteranl/ foreign trade are divided into :-
(a) Import trade :- → When a company buys goods fromm another country.
→ Exaple, India bought machinery from USA, this is an import made for India.
(b) Export trade :-
→ When a company sells goods to another country.
→ Example, India sells tea to USA, for India such selling of goods is called export trade.
(c) Re-export trade :
→ When the goods are imported from one country and the some ar exported to another country, such trade is called 're-export trade'.
→ Also called 'entrepot trade'
• Aids to Trade :-
→ Activites which facilitates the trade are called 'aids to trade'.
→ Aids to trade are classified into :-
-
(i) Transportation :-
→ All the goods are not consumed at the same place where they are produced.
→ Therefore, goods are to be moved from the place of production to the place where they are demanded.
→ Such movement of goods is called transportation
(a) Land transportation :-
Ex- road, rail etc.
(b) Air transportation :-
Ex- aeroplane etc.
(c) Water transportation :-
Ex- boat, ship etc.
(ii) Warehousing :-
→ Warehousing refers to preservation of goods to make them available as and when needed by consumers
(iii) Insuracne :-
→ The goods may be destroyed while in production process, or in tansit due to accidents, or in storage due to fire or theft etc.
→ That's why insurance is important becaause it decrease the burdent of company/ businesses men.
(iv) Advertising :-
→ Advertising facilitates the flow of goods between producers adn consumers by bringing the knowledge about the products to the consumers.
→ Advertising is done through TV, Radio, Newspapers, Magazines, Wallposters etc.
(v) Banking :-
→ A bamk is an organisation which accepts deposits of money from the public, withdrawal on demand or otherwise, and lands the same to those who need it.
→ Banks also provide many service required for the business activity.
1.6 ORGANISATION :-
→ A business organisation means bringing together various components of business such as workforce, raw-meterials, machines, capital, energy, etc, putting them an work systematically, adn coordinating and controlling their activites effectively to achieve the objective of earning profit..
• Forms of Business Organisation :-
(1) Sale Propreitroship
(2) Partnership Firm
(3) Company
(4) Cooperative Society
• Entrepreneur :-
→ The enterpreneure is the person who conceives the business idea, brigns the organisation into existence and carry on the business activity, and prepared to bear the risk of loss.
