F.Y.B.COM
( SEMESTER - I )
Commerce
Paper I (Introduction to Business)
Q2. Explain meaning and features of business.
Meaning :- According to L.H. Haney, “Business is a human activity directed
towards producing or acquiring wealth through buying and selling activities.”
1. Economic activity :
Business is a form of an economic activity. It is the
fruitful occupation for millions of people around the world like traders, bankers,
industrialists, manufacturers and many more including professionals and those
employed.
2. Regularity in dealing :
Business activity is carried out regularly. It is not
merely sale or exchange but the regularity or continuity of such dealings that constitutes
business. A single transaction does not constitute business. The production or
exchange of goods or services for a price is undertaken regularly and
continuously in business.
3. Profit motives :
Business is an income oriented activity. Every businessman expects
profit from the transactions. The main object of business is to earn profit.
Businessman earns profit from the business transactions and the buyer satisfies
his wants of goods and services.
4. Organized activity :
Business is an organised activity concerned with production
and distribution of goods and services. A firm must conduct consumer research
to identify consumer needs and wants. There is a constant need to monitor
customer needs and wants, and accordingly produce and distribute goods and
Service. Business has to be conducted systematically with continuous research
and development. It should be organized in a systematic manner so that business
objectives can be achieved successfully.
5. Degree of scale :
Business can be undertaken at varied degree of seals
ofoperation. Some firm like Sole trading concerns may undertake business on a small
scale and that too in a local area. However, some firms, like joint stock
companies may undertake business on a large scale, even at a global level.
6. Risk and Uncertainties :
Business activities are always risky and uncertain. A business
is likely to suffer huge loss due to a number of possible reasons such as
change in fashion, tastes, preferences, government policies, technology,
recession in the economy, natural calamities etc. All business risks can’t be
insured. A business, however, can minimise risks through proper foresight and
planning.
7. Societal Interest :
At present, business firms place emphasis on “societal concept”
of business. Business make efforts to preserve and promote customers’ and
society’s well-being. Business unit try to achieve a balance between profit +
Consumer satisfaction + public Interest. Therefore, increasing efforts are made
to produce ecofriendly products to satisfy consumer.
8. Social Responsibility :
Professional business firms are conscious of their social responsibility.
The firm try to fulfill their social responsibility towards various groups. It
needs the support of the groups i.e. investers, employees, consumers, creditors
and so on. It can’t function without an active participation from these social
groups. This feature of business in getting more importance in today’s era of a
globalization.
9. Customer Satisfaction :
Modern business world is a consumer oriented. Customer is the
King and Centre of all marketing activities. Professional business firms adopt
customer oriented approach in their business operations. Business firms give
importance not only to profit earning but also to customer satisfaction.
Customers would be satisfied only when they get real value for their purchases.Business
firms have to take care of not only customer satisfaction but also have to
delight the customers by providing better and additional services.
10. Creative :
Modern business is creative in nature. These days, consumers
can’t be satisfied with the same type of goods and services. Hence business
organizations have to be innovative or constantly search new ideas and
proposals.
11. Dynamic :
Business is a dynamic activity. There is a certainty of
change in business Dynamic forces are at work from day to day. Within business
new products, methods, innovations in management cause ever changing adjustment
of policies and administration. From outside forces such as government
regulation, war, changing consumer income and new development in science and an
art.
12. Government Control :
Business organizations are subject to government control. The
government of each country enacts laws and regulations to control and regulate
business activities. Business organisations are expected to adhere to such
laws.
13. Buying and Selling :
All business activities are directly or indirectly
connected with transfers or buying and selling of goods and services. Business
is useful to buyers and sellers. Businessmen as Seller of goods and services,
provide convenience and satisfaction to buyers through provision of form
utility, place utility and time utility. In return for the supply of utilities,
businessmen receive profit benefit from the buyers