All human beings perform some activities for the satisfaction of their needs. They pursue some occupations to earn a livelihood and get some psychological satisfaction. Some activities are performed for profit motive but some to derive personal satisfaction.
WHAT IS BUSINESS?
According to Peterson and plowman, Business is an activity in which different persons exchange something of values, whether goods or services for mutual gain or profit.
• There is no minimum qualifications required to start a business.
• Some money as capital is required before starting a business and it depends on the scale of business
• In business there is always a chance of risks and uncertainties.
• The reward for business issues called profit.
SOME OTHER ECONOMIC ACTIVITIES
- Profession: Profession refers to the activities which require special knowledge and skill of any field and applying the skills to earn a living. A prescribed and professional qualification and training is required for any profession. Limited capital investment is required. In profession a little risk is present. The main motive is to provide services. Reward for profession is called fees
- Employment :Employment refers to the activity which an individual performs under an employer who employs them. The qualification is depending upon the nature of business. No capital investment is required. There’s no risk involved in profession. Reward for employment is called salary or wage.
NON ECONOMIC ACTIVITIES
The activities which are undertaken for the purpose of getting psychological satisfaction is known as non economic activities. For example: charitable activities, going to temples, social services etc.
CHARACTERISTICS OF BUSINESS
- An economic activity: Business is an economic activity as it is concerned with the earning of profit and not psychological satisfaction.
- Production or procurement of goods and services: Each and every business either produces or procures goods or services. Goods may be consumer or industrial and service may be warehousing, banking or insurance.
- Sales or exchange of goods and services for the satisfaction of human needs: A business that is not satisfying the needs of others will not be considered as business. A farmer growing crops for himself is not business but if he is selling crops to others so it will be referred as business. Similarly buying gifts for someone is also no a business. So there must be sales and exchange of goods and services in doing of business.
- Dealing in goods and services on regular basis: Buying or selling of goods or services once or twice is not business. Also one single transaction does not constitute to be business. In business regularity is very important.
- Profit earning: The profit is the main motive of business and business giving no profit is not a business. No businessman can survive without profit.
- Uncertainty of return/risk: There is always a chance of risk or uncertainties in a business. Risks occurs due to changes in market, customers taste and preferences, accidental losses etc.
MULTIPLE OBJECTIVES OF BUSINESS
The business objectives are mainly classified into three categories:
●Economic objective
》Survival: The purpose of business is to exist and survive in competition and in market and it is possible only is business is earning some good amount of profit.
》Profit: Profit is the reward for bearing the risks. Profit is important for growth, expansion and survival too. Profit is also the main motive of business as no business can survive without profit.
》Growth: A business organization must grow and expand. The growth rate is increased if there us more profit and growth is measured through number of branches, number of employees etc.
●Supply of desired qualities of goods and services: Consumers prefers to buys good qualities of products that too in a reasonable price. Quality is meant differently for different products like for products like gas cylinder and pressure cooker the quality may be safety and for pulses, spices qualities may be purity. The businessman must provide goods with good quality to maintain reputation in the society.
●Avoidance of unfair trade practices: No one in the society accepts any anti-social practices. Anti-social practices includes black marketing, overcharging, exaggerating in advertisement etc. With these practices a businessman can loose his reputation in the society. The businessman can even be punished of doing such activities.
》Employment generation: Unemployment us the major problem of every society so businessman must provide new business opportunities for overcoming of this problem.
》Avoidance of pollution: Industrialization bas led to a large problem of pollution so businessman must take care of the environment for the production of goods and services. They must avoid dumping wastes in the water and must bring new environment friendly techniques for production of goods and services.
》social services: The businessman must undertake various projects for the society for their welfare such as running charities, school or hospitals. They can also help society by helping social services programmes such as NGOs, donating money in orphanages etc.
●Human objectives
》providing good working conditions.
》paying competitive and satisfactory salaries and wages.
》Giving peer recognition to every employee by involving them in decision making.
》providing special benefits to employees such as housing facility, medical facility or free education of children etc.