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Questions and Answers
What is the primary objective of a business?
What is the primary objective of a business?
Which type of industry is concerned with extracting and producing natural resources?
Which type of industry is concerned with extracting and producing natural resources?
What is a characteristic of business risks?
What is a characteristic of business risks?
What is the main purpose of tertiary industries?
What is the main purpose of tertiary industries?
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What is a key characteristic of business activities?
What is a key characteristic of business activities?
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What is the main reason for the existence of business?
What is the main reason for the existence of business?
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What type of industry is concerned with using materials extracted at the primary stage?
What type of industry is concerned with using materials extracted at the primary stage?
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What is an essential part of every business?
What is an essential part of every business?
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What is the purpose of scanning the business environment?
What is the purpose of scanning the business environment?
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What are the two main groups that the business environment can be divided into?
What are the two main groups that the business environment can be divided into?
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What is included in the internal environment of a business?
What is included in the internal environment of a business?
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Why is it important to identify a firm's weaknesses?
Why is it important to identify a firm's weaknesses?
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What is the result of scanning the business environment?
What is the result of scanning the business environment?
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What are the three causes of business risks?
What are the three causes of business risks?
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What is the primary motive of a business?
What is the primary motive of a business?
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What is commerce involved in?
What is commerce involved in?
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What is an essential part of commerce?
What is an essential part of commerce?
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What is the primary objective of business?
What is the primary objective of business?
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What is an auxiliary to trade?
What is an auxiliary to trade?
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What indicates the efficient working of a business?
What indicates the efficient working of a business?
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What do business objectives define?
What do business objectives define?
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What is the main function of trade?
What is the main function of trade?
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Study Notes
Definition of Business
- Business is an economic activity that involves producing and selling goods and services to earn a profit by satisfying human needs.
- It is primarily organized to manufacture or produce goods and services for a profit.
Aspects of Business
- Business means different things to different people, including an occupation, trade, profession, operations of trade or industry, or a commercial enterprise or establishment.
Commerce and Trade
- Commerce refers to the activities of removing hindrances of person, place, time, risk, finance, and information in the process of exchanging goods and services.
- Trade is essential to commerce, referring to the sale, transfer, or exchange of goods, making them available to ultimate consumers or users.
Objectives of Business
- Profit is a primary objective of business, which:
- Provides income for business owners
- Enables financing for business expansion
- Indicates efficient business operations
- Builds business reputation
- Multiple objectives of business include market standing, innovation, productivity, physical and financial resources, profit, manager and worker performance, and social responsibility.
Characteristics of Business Activities
- Economic activity
- Production or procurement of goods and services
- Sale or exchange of goods and services to satisfy human needs
- Dealings in goods and services on a regular basis
- Profit earning
- Uncertainty of return
- Element of risks
Industry Classification
- Primary industries: extraction and production of natural resources, reproduction, and development of living organisms
- Secondary industries: using materials extracted at the primary stage
- Tertiary industries: providing support services to primary and secondary industries and relating to trade
Rationale for the Existence of Business
- Profit maximization is the primary rationale for the existence of business
- Business must make revenue exceeding costs through production and marketing of goods and services that satisfy human needs and wants
Business Risks
- Risk refers to the responsibility of inadequate profits or even losses due to uncertainties or unexpected events
- Characteristics of business risks:
- Arise due to uncertainties
- Essential part of every business
- Degree of risk depends on nature and size of business
- Causes of business risks include natural, human, and economic causes
Business Environment
- Components of business environment:
- Micro environment (internal and external)
- Macro environment
- Micro environment includes internal environment (marketing programs, financial resources, R&D, manufacturing, purchasing policies) and external environment
- Scanning the environment helps identify opportunities, threats, strengths, and weaknesses
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Description
Introduction to business organizations, definition of business, and aspects of business, including occupation, trade, and commercial enterprise.
