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Characteristics of Business:
Business as an organization is different from other social, religious or welfare organizations. As an organization, business possesses the following characteristics.
Business as an organization is different from other social, religious or welfare organizations. As an organization, business possesses the following characteristics.
- Social Institution: Business is a social institution. It is a recognized legal institution of the members of the society. Business is of the society, for the society and by the society. It uses social resources and works for the society.
- Dealing items of the business: Business deals in goods and services. Its operation is in the materialistic area. By using different commodities or raw materials, business manufactures different products.
- Creation of utility: Major contribution of the business is creation of utility or value addition. Business creates utility for the society and in this way it serves the society.
- Going Concern: Business presupposes continuity and regularity of operations. In most cases business survives almost perpetually.
- Dealing by Consideration: Business is not a religious or charitable activity. In every transaction business requires consideration, i.e., business dealings are for a price.
- Profit as objective of business: profit is the prime motive of business. Profit is the yardstick of survival of the business. It is index of efficiency and effectiveness. Only profitable business survives ultimately.
- Administration in Business: Business needs administration. Proper administration or management ensures profitability, success or survivalist of business.
- Gradual Growth of Business: Business survives or disappears. Successful business must grow and expand. Gradually business expends from a single proprietorship in a multinational company (MNC).
- Deliverer of Standard of Living: Modern business is an influential institution in the society. It provides employment, income generation and consumable goods to the society. Thus business is the deliverer of standard of living in the society.
- Business is inventor: Business tries to develop new products for the society. Business functions include research and development. So business invents different uses of the natural resources and thus provides new goods to the society.