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Activities of the Business:
There is general uniformity of activities among different types of business organizations that they are engaged in the procurement, production and sale or distribution of goods or services. Small business organization or proprietorship firm is usually engaged in trade or merchandizing or in small-scale manufacturing, usually known as handicraft or cottage industry. Partnership firms operate in almost same type of business like sole-proprietorship firm, except with some extended operation. A company or corporation chooses large-scale operation or manufacturing.
(1) Activities of Business from Financial Viewpoint:
Normally, the activities of business, especially companies or corporate type of business, are grouped, usually, from financial viewpoint, which are as follows:
(a) Financing Activities: A financial resource is the per-condition for business operation. Arrangement of capital or money is financing activity. In case of company, distribution of dividend or dividend decision is also financing activity. A corporation is financed usually by equity capital-ordinary or common stock and preferred stock and debt capital. So share issue and debt servicing are major financing activity of a joint stock company type of firm.
(b) Investing Activities: Business makes money with the help of money, which is the result of investment. Investment creates value. Direct investment creates value or economic value. Financial or portfolio investment indirectly helps investment. Investing activity includes purchase ( or sale ) of land, construction of building, procurement and erection of machine, etc.
(c) Operating Activities: Operating activities or operations include procurement of material for manufacturing of goods, or purchase, or procurement of finished goods and sale or marketing and distribution of those intermediate or final goods.
2:Activities of Business from Operational Viewpoint:
Operating activity is the main activity of the business. Operations or manufacturing and distribution are facilitated by or include engineering, finance, accounting and control, marketing, etc. These are support services to production, the details of which, are as follows.
(a) Administration or Management Function: The general or corporate management of the business, especially of the joint Stock Company or corporation is the most important task of all activities. Top management or corporate level management determines the vision, the mission, strategies or policies of the company. Management is ensured at each level of the organization or at all functional levels. At the functional levels it is known as Production Management, Financial Management, Working Capital Management, Marketing Management, Personnel or Human Resource Management, etc. which are in detail as follows.
(b) Production: production is the value creation or value addition or manufacturing of different goods or rendering of services. It includes all activities to make natural resources consumable or more consumable or to develop alternative uses. Production means utility creation or value addition over the natural resources. Different types of utility are: (1) form utility, (2) place utility, (3) time utility, and (4) possession utility. Different types of industrial activities, i.e., extractive, genetic, manufacturing and construction create value on the natural resources. In the manufacturing industry, analytical, processing, synthetically, and assembling types of activities create identifiable products. Production or operation manager arranges engineering and other operations or services to complete production.
(c) Marketing and Distribution: These are the next major activities of the business. Business means production and distribution or value creation and reaching those to the doorstep of the consumers or customers. Proper marketing and distribution ensure the sale or consumption and earns revenue or money for the entrepreneur. Marketing includes survey and market research, advertisement and promotion of sales, etc.
(d) Engineering: Engineering helps production. Procurement and setting up of machine, application of appropriate technology, supply and guarantee of power or electricity, use of ‘Information Technology (IT/ or computer), continuous mechanization or use of high-tech process, etc. are ensured by engineering, and effective, efficient and competitive business operation becomes possible.
(e) Finance and Banking: Over and above finance of capital, routine finance functions, financial management, working capital management, banking, listing with capital markets, etc. are necessary finance functions, or finance and banking activities of a business.
(f) Accounting and capital: Proper accounting and control ensure business success. Accounting is called the language of the business. Modern corporate type of business can not survive and grow without proper accounting and control. So these are also important activities of a business.
(g) Establishment of Information Systems: Information is resource and power or source of power. Information accelerates organization’s success. So system should be established to generate, collect, disseminate and utilize information. Effective ‘Business information system ( BIS )’ should be established including ‘Management Information system (MIS )’, ‘Marketing information system(MIS), ‘production information system (PIS)’, for goal attainment or success and growth.
(h) Research and Development (R&D): Research and Development help innovation of new products of services to satisfy customer or enhance solution of customers complains or increase their satisfaction.
(i) Other Related Activities: Activities of business also includes procurement of raw-materials and other resources, recruitment, training and development of human resources; searching for low-cost solution, and any other activity to ensure business success.
There is general uniformity of activities among different types of business organizations that they are engaged in the procurement, production and sale or distribution of goods or services. Small business organization or proprietorship firm is usually engaged in trade or merchandizing or in small-scale manufacturing, usually known as handicraft or cottage industry. Partnership firms operate in almost same type of business like sole-proprietorship firm, except with some extended operation. A company or corporation chooses large-scale operation or manufacturing.
(1) Activities of Business from Financial Viewpoint:
Normally, the activities of business, especially companies or corporate type of business, are grouped, usually, from financial viewpoint, which are as follows:
(a) Financing Activities: A financial resource is the per-condition for business operation. Arrangement of capital or money is financing activity. In case of company, distribution of dividend or dividend decision is also financing activity. A corporation is financed usually by equity capital-ordinary or common stock and preferred stock and debt capital. So share issue and debt servicing are major financing activity of a joint stock company type of firm.
(b) Investing Activities: Business makes money with the help of money, which is the result of investment. Investment creates value. Direct investment creates value or economic value. Financial or portfolio investment indirectly helps investment. Investing activity includes purchase ( or sale ) of land, construction of building, procurement and erection of machine, etc.
(c) Operating Activities: Operating activities or operations include procurement of material for manufacturing of goods, or purchase, or procurement of finished goods and sale or marketing and distribution of those intermediate or final goods.
2:Activities of Business from Operational Viewpoint:
Operating activity is the main activity of the business. Operations or manufacturing and distribution are facilitated by or include engineering, finance, accounting and control, marketing, etc. These are support services to production, the details of which, are as follows.
(a) Administration or Management Function: The general or corporate management of the business, especially of the joint Stock Company or corporation is the most important task of all activities. Top management or corporate level management determines the vision, the mission, strategies or policies of the company. Management is ensured at each level of the organization or at all functional levels. At the functional levels it is known as Production Management, Financial Management, Working Capital Management, Marketing Management, Personnel or Human Resource Management, etc. which are in detail as follows.
(b) Production: production is the value creation or value addition or manufacturing of different goods or rendering of services. It includes all activities to make natural resources consumable or more consumable or to develop alternative uses. Production means utility creation or value addition over the natural resources. Different types of utility are: (1) form utility, (2) place utility, (3) time utility, and (4) possession utility. Different types of industrial activities, i.e., extractive, genetic, manufacturing and construction create value on the natural resources. In the manufacturing industry, analytical, processing, synthetically, and assembling types of activities create identifiable products. Production or operation manager arranges engineering and other operations or services to complete production.
(c) Marketing and Distribution: These are the next major activities of the business. Business means production and distribution or value creation and reaching those to the doorstep of the consumers or customers. Proper marketing and distribution ensure the sale or consumption and earns revenue or money for the entrepreneur. Marketing includes survey and market research, advertisement and promotion of sales, etc.
(d) Engineering: Engineering helps production. Procurement and setting up of machine, application of appropriate technology, supply and guarantee of power or electricity, use of ‘Information Technology (IT/ or computer), continuous mechanization or use of high-tech process, etc. are ensured by engineering, and effective, efficient and competitive business operation becomes possible.
(e) Finance and Banking: Over and above finance of capital, routine finance functions, financial management, working capital management, banking, listing with capital markets, etc. are necessary finance functions, or finance and banking activities of a business.
(f) Accounting and capital: Proper accounting and control ensure business success. Accounting is called the language of the business. Modern corporate type of business can not survive and grow without proper accounting and control. So these are also important activities of a business.
(g) Establishment of Information Systems: Information is resource and power or source of power. Information accelerates organization’s success. So system should be established to generate, collect, disseminate and utilize information. Effective ‘Business information system ( BIS )’ should be established including ‘Management Information system (MIS )’, ‘Marketing information system(MIS), ‘production information system (PIS)’, for goal attainment or success and growth.
(h) Research and Development (R&D): Research and Development help innovation of new products of services to satisfy customer or enhance solution of customers complains or increase their satisfaction.
(i) Other Related Activities: Activities of business also includes procurement of raw-materials and other resources, recruitment, training and development of human resources; searching for low-cost solution, and any other activity to ensure business success.