TRIVANDRUM INTERNATIONAL SCHOOL

What is business ?
How we identify it is a business?
Do we need a permanent place to start the business ?
What is the ultimate aim behind business?
Find some business organization around your
Locality?
TRIVANDRUM INTERNATIONAL SCHOOL

• Business is an Economic activity which involves regular production and or exchange of goods and services with the main purpose of earning profits through the satisfaction of human wants.
TRIVANDRUM INTERNATIONAL SCHOOL

1.business involves production and exchange of goods.
2.It’s main aim is to earn profit.
3.It must satisfy human wants.
“ These activities are organised and performed under the framework of an institution known as business organisation /firm/enterprise.”
TRIVANDRUM INTERNATIONAL SCHOOL

“ According to B.O Wheeler, Business is an institution organised and operated to provide goods and services to society under the incentive of private gain.”
TRIVANDRUM INTERNATIONAL SCHOOL

• Business pervades all human activities directed towards earning profits or economic gains.
Industry,trade,Banking,Transport
,Insurance,warehousing,advertisin g etc are integral part of modern business.
TRIVANDRUM INTERNATIONAL SCHOOL

ECONOMIC ACTIVITIES
BUSINESS
TRADE
INDUSTRY
BANKING
TRANSPORTATION
INSURANCE
WAREHOUSING
ADVERTISING ETC.
PROFESSION
EMPLOYMENT
MEDICAL
LEGAL
CHARTERED ACCOUNTANT .
MANAGER
FOREMAN
CLERK
SALESPERSON
WORKER,ETC...
TRIVANDRUM INTERNATIONAL SCHOOL

• Business refers to all those activities which are concerned with the production and /or purchase and sale of goods or services with the purpose of selling them at a profit.
TRIVANDRUM INTERNATIONAL SCHOOL

• Economic Activity
• Production or procurement (acquisition of goods for the purpose of sale)
• Dealing in goods and services;( goods are consumer goods and capital goods)
• Satisfaction of consumer wants
• Regular dealings (continuous supply of goods and services)
• Profit motive
• Uncertainty.
• Risk element
• Creation of utility
TRIVANDRUM INTERNATIONAL SCHOOL

• Business objectives as the purpose or the reason for the existence of the business in the society.
TRIVANDRUM INTERNATIONAL SCHOOL

Business activities broadly divided in to three;
They are, a) Economic objectives, b) social objectives c)Human objectives
TRIVANDRUM INTERNATIONAL SCHOOL

TYPES OF BUSINESS ACTIVITY
ECONOMIC
OBJECTIVES
SOCIAL
OBJECTIVES
HUMAN
OBJECTIVES
1)EARNING OF PROFIT
2)CREATION OF CUSTOMERS
3)INNOVATION
4)EFFECTIVE UTILISATION
OF RESOURCE
1)BETTER QUALITY PRODUCTS
2)FAIR TRADE PRACTICES
3)GENERATION OF EMPLOYMENT
EMPLOYEES WELFARE
4)COMMUNITY SERVICE
5)PROTECTION OF EMPLOYMENT
1)GOOD SERVICE AND
FAIR DEALINGS
2)TREATING EMPLOYEES
AS PARTNERS
3) DEVELOPMENT OF EMPLOYEES
SKILLS
4) JOB SATISFACTION OF
EMPLOYEES
TRIVANDRUM INTERNATIONAL SCHOOL

• ACCORDING TO PETER. F. DRUCKER
“
A BUSINESS MUST ACHIEVE SUFFICIENT
PROFITS TO COVER THE RISKS OF
ECONOMIC ACTIVITY AND THUS TO AVOID
LOSS”
TRIVANDRUM INTERNATIONAL SCHOOL

A BUSINESS MUST EARN ADEQUATE
PROFITS BECAUSE OF THE FOLLOWING
REASONS ;
• MEANS OF LIVELY HOOD
• RETURN TO INVESTORS
• REWARD FOR RISKS
• SOURCE OF FINANCE FOR GROWTH AND
EXPANSION
• INDICATOR OF EFFICIENT WORKING
• GOODWILL OR REPUTATION
TRIVANDRUM INTERNATIONAL SCHOOL

• A lay man may say that business is carried on for profit only. But a good business man cannot afford to keep profits as his sole objective.
• “earning of profits cannot be the objective of a business any more than eating is the objective of living”

• Profit maximization ignores the interests of labour,customers,and the society.
• Unfair means such as hoarding, black marketing or adulteration may be followed to maximize profits.
• Long term interest of the business may be ignored to maximize profits in the short run.
• In the present day environment, a business can't be effective with the sole objective of profit maximisation.It must also set objectives in areas like customer satisfaction, employee welfare, community development, environment protection etc..

• According to peter f Drucker remarked “To manage a business is to balance a variety of needs and goals.
And this requires multiple objectives”
• He suggests 8 areas where objectives must be set.

• 1 market standing (eg; Bata)
• 2 Innovation (eg; Hero Honda)
• 3 productivity(
It is the ratio b/w output and inputs in production process. it is considered as the efficiency of the enterprises.)
• 4 Human organizationworkers attitude and performance
• 5 Physical and financial resources
• 6 managarial performance
• 7 social rresponsibility
• 8 profitability-reasonable rate.

• Business activities are classified on the basis of 3 criteria,ie,
• 1 size
• 2 ownership
• 3 functions

• On the basis of size business activities are classified as
• 1 small scale
• 2 large scale
• Small scale the investment does not exceed Rs 100 lakhs.
• Large scale means the investment exceed 1
Crore

• On the basis of OWNERSHIP business activities are classified as
• Public sector –under the govt. control
• pvt sector-under private control
• Joint sector –both govt. and private

Public enterprises may be organized as
• Departmental undertaking
• Government company
• Statutory corporation etc…
But pvt.enterprises are like;
Sole trader,
Joint Hindu family
Partnership
Joint stock company
And co-operative society.

• On the basis of functions business activities are classified in to two;
• Industry
• and commerce
• Commercial activities are again classified as ;
• trade and aids to trade

BUSINESS ACTIVITIES
INDUSTRY
1 EXTRACTIVE
2 GENETIC
3 MANUFACTURING
4 CONSTRUCTION
Trade
Home trade;
1)Retail trade
2) wholesale trade
COMMERCE
Foreign trade
1 import
2 export
3 Entrepot
Aids to Trade
Transport
Warehousing
Insurance
Banking advertising

A brief review of the various types of
Business activities
• 1 Industrial activities or Enterprise;
.
It includes mining ,breeding,costruction of roads building,etc....(manufacturing,mining,constructions )
2 Commercial activities; commercial activities involve exchange of goods and services like...transport, ware housing,banking,insurance and advertisement.
.
3 Trading activities or firms; it refers to purchase and sale of goods to earn profits by the business men known as traders. They engaged in a)
Home trade - includes wholesale and retail b) foreign trade- import-export and entreport

A brief review of the various types of Business activities
• Service activities or enterprises;
These include those services which facilitate smooth trade and also serve as the back born of modern industry.
banking,insurance,transportation,warehousing, insurance, packaging.

• Primary industry; it includes extraction
,producing and processing of natural resource (extractive+ Genetic)
• Secondary industry are concerned with processing materials which have already been produced at the primary stage.
• Manufacturing and construction industry is under secondary industry.

• Analytical industry;petrolium refining is an example of analytical industry.
• Synthetic industry; two or more materials are mixed together in the manufacturing operations to obtain some new products.like soap,cement etc

• Processing industry; raw materials are processed through a series of manufacturing operations making use of analytical and synthetic method)textile sugar and steel.
Assembly line industry; in assembly industry, the finished products can be produced only after various components have been made and then brought together for final assembly. automobile watches,telivision are examples

• They are concerned with making of roads,bridges,dams and canals.

• Trade is that branch of commerce which deals with exchange of goods and services in terms of money between different persons known as
‘traders’

• Trade may be classified on the basis of 1)
Geographical area covered
2) volume of trade transaction
• On geographical basis trade may be classified in to two like internal trade and external trade.
• On volume of trade basis trade is divided in to two
• Wholesale & retail trade

• It refers to purchase and sale of goods within the boundaries of a country.
• Wholesale trade; purchase and sale of goods in bulk quantity and sell to retailers at small quantity.
• Retail trade; selling of goods by the retailer to the customer

• Import trade
• Export trade
• & Entrepot trade

• Transportation and communication
• Banking
• Insurance
• ware housing
• Advertising
• And packaging

Differentiate between industry, trade and commerce industry commerce Trade