BUSINESS STUDIES
Unit 1 Introduction to business
1.1 Concept of business
Traditional concept
-------It states that business is to earn profit having production and distribution of goods/services.
Modern concept
---------It states that business is an activity to earn profit by considering and associating its goods/service regularly as well as also the responsibilities towards society for social welfare.
“Business is institution organized and operated to provide goods and services to society under the incentive of private gain.”------B.O. Wheeler
“Business is a human activity directed towards producing or acquiring wealth through buying and selling of goods.” --L.H Haney
1.2 Characteristics of business
1. Human economic activity
2. Entrepreneurship
3. Profit motive
4. Creation of utility
5. Regular dealings
6. Risk and uncertainly
7. Sale, transfer and exchange
8. Customer creation
9. Adequate finance
10. System
1.3 Components of business
Industry
>Primary industry
-Extractive
-Genetic
>Secondary industry
-Analytical
-Synthetic
-Processing
-Assembling
ii. Commerce
>Trade
-Home trade
-Foreign trade
-Entreport trade
>Auxiliaries to trade
-Finance and banking
-Transportation
-Insurance
-Warehousing
-Communications
-Professional services
1.4 Functions of business
>Organizing
>Financing
>Production
>Human resource management
>Marketing
>Innovation (Changing with time)
1.5 Objectives of business
>Organic objectives
-Survival
-Growth and diversification
-Prestige and recognization
-Stability and ability
>Economic objectives
-Profit making
-Customer creation
-Innovation (Changeable)
-High productivity
-Increase market share
>Social objectives
-Quality product at fair price
-Employment opportunities
-Not in involve with anti-social practices
-Preservation of environment
-Involve in social services for social welfare
>Human objectives
-Fair return to investors
-Fair compensation to employees
-Job satisfaction
-Consumer satisfaction
-Employee welfare
-Worker’s participation
>National objectives
-Proper utilization of resources
-Ensure employment opportunities
-Development of different sectors
-Produce as per priority
-Balanced development
1.6 Importance of business
>Satisfaction of wants
>Utilization of resources
>Employment generation
>Earning foreign currency
>Economic development
>Self sufficiency
>Source of government revenue
>Motivate the investors
>Promote social welfare
1.6 Social responsibilities towards investors
>Safety of investment
>Fair return
>Reporting of results
>Efficiency
>Participation of shareholders
1.7 Social responsibilities towards consumers
>Produce as required
>Reasonable price
>Avoid unfair trade practices
>Pre-sale and after-sale service
>Grievance handling
>Availability or regularity
1.8 Social responsibilities towards employees
>Job security
>Fair wages
>Working conditions and environment
>Welfare for employees
>Grievance handling
>Employee policy
>Participation of employees
1.9 Social responsibilities towards community
>Optimum and proper use of resources
>Environment preservation
>Community welfare
>Employment for community members
1.10 Social responsibilities towards government
>Following rules and regulations
>Regular payment of tax
>Involve in solving national problems
>Avoid of unfair trade
