DEFINE BUSINESS
Business is all around us and it is the mainspring of modern life. But very few people understand its true nature and role in society. The study of business is essential for training for a career. Study of the principles and practices of business organization helps in understanding events in their right perspective and in tackling the problem of satisfying human wants through the use of available resources. Every human being is busy in one activity or the other to satisfy his unlimited wants and desires. The subtotal of human activities may broadly be divided into two categories-economic activities and non-economic activities. Economic activities are designed to attain and use the material resources of life. They are concerned with the production, distribution and consumption of goods and services. Human beings undertake economic activities in order to earn their livelihood. For instance, a worker works in the factory, a doctor operates his clinic, a manager works in his office and a lecturer teaches in a college to earn a living for himself/herself and for his/her family. On the other hand, non-economic activities are carried out not for earning money but on account of the human sentiments of charity, love, sympathy, patriotism, religion etc. For example, a housewife cooks food for her family, person goes to the temple for daily prayers and a boy helps an old man in crossing the road. Economic activities or human occupations may be further classified into three categories, namely business, profession and employment or service. Let us discuss and compare these terms.
Literally the term business implies busyness or the state of being busy. But this is not the proper concept of business as it covers every human activity. Business is an economic activity as it is concerned with earning money and acquiring wealth. It is the human activity directed towards the acquisition of wealth through the production and exchange of goods and service. A business enterprise is an economic institution as it is engaged in the production and distribution of goods and services in order to earn profits and acquire wealth. According to wheeler, business is an institution organized and operated to provide goods and services to society under the incentive of private gain. In the words of owns, business means an enterprise engaged in the production and distribution of goods for sale in the market or the rendering of services for a price.
Men have unending necessities or wants. Without fulfilling those necessities, men can not live or survive. Wealth or resources having utility can satisfy human wants. These resources are limited or scarce. Human efforts to earn resources or money are known as economic activities. The process of economic activities to produce products or render services to earn profit is known as business. Profit is the excess of sales revenues over the expenses of earning those, and is known as ‘Economic Surplus’ of business in the ‘Socialism Terminology’
Business is everywhere in the world, and everyone is linked with, or engulfed by the business. The food we eat, the cloth we wear, the car we ride or drive, the television we watch or enjoy, etc. are produced, distributed, and sold by the business. To be able to buy these things, we earn money working mainly in a business. The bank where we keep the saved portion of that money is also doing business. Thus ‘a business is an organization engaged in producing goods and rendering services to make estimated or realized economic surplus known as profit’.
Products, available in the market, are created by the operations of many businesses. Let us think about a piece of bread ( a loaf ); first a farmer grew the wheat with the help of fertilizer supplied by a chemical fertilizer company and other inputs; when it become matured ( ripen ) , he harvested it using a machine he bought (may be, with the help of bank loan ) from a manufacturer. He carried the wheat by a truck to a mill, which ground it into flour and sold it to a bakery, may be a company. That company brought the flour by the train or truck to its plant, where it was combined with other ingredients bought from other suppliers to make bread. The bakery, then, wrapped the bread in plastic or polyethylene bought from another company. Using the trucks or vans, bought from a vehicle manufacturer, the baker transported the bread to a retail store, where we are able to purchase it.
Business denotes those human activities, which are directed toward creating utilities and acquiring wealth through the process of buying and selling of goods or services. Such buying and selling and the direct or indirect services of various agencies aid in the production and distribution of commodities, Thus, business includes all activities in the arena of manufacturing, trading or merchandising, transportation, warehousing, banking and finance, insurance, promotion, etc. that cater to the needs of ultimate consumers and aid in the production and distribution of goods. As a matter of fact, all the material substances are supplied by the creator to which the businessman, by their different activities or services, create new or additional utility for the purpose of making those useful to satisfy human wants. The businessman to earn income or profit always dose production or utility creation or value addition. So business may be defined as the creation, transportation and exchange of utilities in the form of goods and services for making profit or an economic surplus. In wider perspective, any systematic or organized course of activities to earn profit through production and sale of goods or services is business. Thus, business includes industry, commerce and direct services.
Industry is an organization of activities to create utility or value. Different types of industrial activities are extraction of natural resources, construction, manufacturing, mining, fishing, forestry, agriculture, etc. Industry deals with production.
Production is done with the ultimate aim of consumption. Producers and consumers stay at two extreme points or poles, i.e., at different places. There are some hindrances between producers and consumers, and the distribution process requires the removal of those hindrances with the help of some services. These services are transportation, insurance, warehousing, banking, or finance, trade, advertising or promotion, etc. which in aggregate mean commerce. Thus, commerce is a branch of business like industry.
Direct services or professional services like management, engineering, consultancy, and audit and assurance services. Information (IT), etc. assist the process of production and distribution. These are also performed with an aim to earn profit. So, these are also areas of business. Therefore, business includes industry, commerce and direct services.
Business is a risky activity. Risk is inherent in business. Where there is no risk, there is no gain or business, is a proverb. Business is defined by scholars differently, which are as follows.
Business is all around us and it is the mainspring of modern life. But very few people understand its true nature and role in society. The study of business is essential for training for a career. Study of the principles and practices of business organization helps in understanding events in their right perspective and in tackling the problem of satisfying human wants through the use of available resources. Every human being is busy in one activity or the other to satisfy his unlimited wants and desires. The subtotal of human activities may broadly be divided into two categories-economic activities and non-economic activities. Economic activities are designed to attain and use the material resources of life. They are concerned with the production, distribution and consumption of goods and services. Human beings undertake economic activities in order to earn their livelihood. For instance, a worker works in the factory, a doctor operates his clinic, a manager works in his office and a lecturer teaches in a college to earn a living for himself/herself and for his/her family. On the other hand, non-economic activities are carried out not for earning money but on account of the human sentiments of charity, love, sympathy, patriotism, religion etc. For example, a housewife cooks food for her family, person goes to the temple for daily prayers and a boy helps an old man in crossing the road. Economic activities or human occupations may be further classified into three categories, namely business, profession and employment or service. Let us discuss and compare these terms.
Literally the term business implies busyness or the state of being busy. But this is not the proper concept of business as it covers every human activity. Business is an economic activity as it is concerned with earning money and acquiring wealth. It is the human activity directed towards the acquisition of wealth through the production and exchange of goods and service. A business enterprise is an economic institution as it is engaged in the production and distribution of goods and services in order to earn profits and acquire wealth. According to wheeler, business is an institution organized and operated to provide goods and services to society under the incentive of private gain. In the words of owns, business means an enterprise engaged in the production and distribution of goods for sale in the market or the rendering of services for a price.
Men have unending necessities or wants. Without fulfilling those necessities, men can not live or survive. Wealth or resources having utility can satisfy human wants. These resources are limited or scarce. Human efforts to earn resources or money are known as economic activities. The process of economic activities to produce products or render services to earn profit is known as business. Profit is the excess of sales revenues over the expenses of earning those, and is known as ‘Economic Surplus’ of business in the ‘Socialism Terminology’
Business is everywhere in the world, and everyone is linked with, or engulfed by the business. The food we eat, the cloth we wear, the car we ride or drive, the television we watch or enjoy, etc. are produced, distributed, and sold by the business. To be able to buy these things, we earn money working mainly in a business. The bank where we keep the saved portion of that money is also doing business. Thus ‘a business is an organization engaged in producing goods and rendering services to make estimated or realized economic surplus known as profit’.
Products, available in the market, are created by the operations of many businesses. Let us think about a piece of bread ( a loaf ); first a farmer grew the wheat with the help of fertilizer supplied by a chemical fertilizer company and other inputs; when it become matured ( ripen ) , he harvested it using a machine he bought (may be, with the help of bank loan ) from a manufacturer. He carried the wheat by a truck to a mill, which ground it into flour and sold it to a bakery, may be a company. That company brought the flour by the train or truck to its plant, where it was combined with other ingredients bought from other suppliers to make bread. The bakery, then, wrapped the bread in plastic or polyethylene bought from another company. Using the trucks or vans, bought from a vehicle manufacturer, the baker transported the bread to a retail store, where we are able to purchase it.
Business denotes those human activities, which are directed toward creating utilities and acquiring wealth through the process of buying and selling of goods or services. Such buying and selling and the direct or indirect services of various agencies aid in the production and distribution of commodities, Thus, business includes all activities in the arena of manufacturing, trading or merchandising, transportation, warehousing, banking and finance, insurance, promotion, etc. that cater to the needs of ultimate consumers and aid in the production and distribution of goods. As a matter of fact, all the material substances are supplied by the creator to which the businessman, by their different activities or services, create new or additional utility for the purpose of making those useful to satisfy human wants. The businessman to earn income or profit always dose production or utility creation or value addition. So business may be defined as the creation, transportation and exchange of utilities in the form of goods and services for making profit or an economic surplus. In wider perspective, any systematic or organized course of activities to earn profit through production and sale of goods or services is business. Thus, business includes industry, commerce and direct services.
Industry is an organization of activities to create utility or value. Different types of industrial activities are extraction of natural resources, construction, manufacturing, mining, fishing, forestry, agriculture, etc. Industry deals with production.
Production is done with the ultimate aim of consumption. Producers and consumers stay at two extreme points or poles, i.e., at different places. There are some hindrances between producers and consumers, and the distribution process requires the removal of those hindrances with the help of some services. These services are transportation, insurance, warehousing, banking, or finance, trade, advertising or promotion, etc. which in aggregate mean commerce. Thus, commerce is a branch of business like industry.
Direct services or professional services like management, engineering, consultancy, and audit and assurance services. Information (IT), etc. assist the process of production and distribution. These are also performed with an aim to earn profit. So, these are also areas of business. Therefore, business includes industry, commerce and direct services.
Business is a risky activity. Risk is inherent in business. Where there is no risk, there is no gain or business, is a proverb. Business is defined by scholars differently, which are as follows.