I. CONCEPT OF BUSINESS
Business is one of the economic activities. In the modern times, business has become one of the most important economic activities and means to achieve material prosperity and human welfare. The systematic development of Business is of paramount significance for achieving desired economic growth and development of economies in the context of liberalization, privatization and globalization. Economic activities refer to those human activities which are undertaken with the object of satisfying material and economic needs. Economic activities are concerned with production and distribution of wealth i.e. goods and services, for sale to others at a profit. They are influenced mainly by material or economic considerations.
Meaning and Definition of Business:
Etymologically, Business means the state of being busy. In this sense, any economic activity with human beings keep themselves busy can be regarded as business. But such a view is too general to serve any purpose. In the general sense, business is identified with exchange of goods and services. In this sense, business refers to mere trading i.e. buying and selling of goods. This view is too narrow because scope of modern business is quite wide. In its practical sense, business refers to all those economic activities which are concerned with the production or purchase of goods and services for the purpose of sale at a profit. In this sense, business includes activities like manufacturing, trading, transportation, warehousing, banking and finance, insurance, advertising, etc.
According to Prof. R. N. Owens “Business is an enterprise engaged in the production and distribution of goods for sale in a market or rendering of services for a price”.
According to L.R. Dicksee, “Business is a form of activity pursued primarily with the object of earning profits for the benefit of those on whose behalf the activity is conducted”.
According to Urwick and Hunt, “Business is any enterprise which makes, distributes or provides any article or service which other members of the community need and are willing to pay for”
According to Haney, “Business may be defined as human activity directed towards producing or acquiring wealth through buying and selling of goods”.
Interpretations of the term ‘Business’:
The term business literally meant the state of being busy for an individual, group, organisation or society. Business is interpreted as one’s regular occupation or profession or economic activities. Business is also understood as a particular entity, company, organisation, enterprise, firms or corporation. Business is also interpreted as particular market segment sector like Real estate business, textile business etc. Characteristics of business:
1. Business is an economic activity:
Every business is an economic activity leading to the creation of utility of one kind or another. Creation of utility can be form utility, place utility, time utility etc.
2. Business involves sale, transfer or exchange for value:
Business involves sale, transfer or exchange of goods or services for value. Therefore, only the production or purchase of goods or services with the object of selling them or exchanging them for value comes under business.
3. Business is created and managed by people:
According to Peter F. Drucker, “Business is created and managed by the people known as entrepreneurs. A group of people who will take decisions will determine whether an organisation is going to prosper or decline, whether it will survive or will eventually perish in market. This conclusion is true of every business.
4. Business is conducted with profit motive:
Business is conducted with the object of making profit. Earning of profits by a business is necessary for its very survival. Without profit business cannot survive for long.
5. Business involves element of risk:
Business involves risk i.e. possibility of loss...