Commerce Chapter 2 PDF

Nature and ObJectJve5 of Buslnesi Ill :ousiness is nn institution organised and operated to provide goods and services to society under the incentive of private gain." -B.O. U1J,eeler..'Business is a fonn of...

Nature and ObJectJve5 of Buslnesi Ill :ousiness is nn institution organised and operated to provide goods and services to society under the incentive of private gain." -B.O. U1J,eeler..'Business is a fonn of activity pursued primarily with the objective of earning profits for the benefit of those on whose behalf the activity is conducted." -LIL Dicksee ''Economic activities perfonncd for earning profits are tenned as Bus!ness". -Jam es Stephenson ''Business is a sum of aJI activities involved in the production and distribution of goods and services for private profits". -Keit h a11d Carlo "Business is any enterprise which makes, distributes or provides any article or service which the other members of the community need and are able and willin g to pay for". -Urw ick on!1 H11t1t "Business is any enterprise engaged in the production and distribution of goods for sale in market or rendering services for a price." _;_R.N. Owens "The whole complex field of commerce and industry, the basic industries processing and manufacturing industries and the network of ancillary services, distribution, bankin g, insurance transport and so on which serve and interpenetrate the world of busine a whole". ss as -F.C. Hooper These definitions highlight the different aspects of business. Haney's definition includes goods only but rendering of service is also a part of business. \Vhee ler considers private gain as the sole motive of business whereas some business activit ies like public utility services are undertaken primarily for the benefit of society. Defini tions of Un\'ick, Hunt, and Owens focus on providing goods and services to people for a price. Hooper has tried to enumerate various types of business activities. His definit ion appears to be comprehensive but does not point out the purpose of business. Business may be defined as an economic activity which involves regular transf er or exchange of goods and services for a price with the object of earning profits and acquiring wealth through the satisfaction of human wants, with an element of risk. 2.2 CHARACTERISTICS OF BUSINESS The salient features of business are given below: 1. Creation of utilities. Business makes goods more useful to satisfy human wants. It adds time, place. fonn, and possession utilities to various types of goods. In the words of Roger, "a business exists to create and deliver value satisfaction to customers at a profit". Business enables people to satisfy their wants more effecti vely and economically. It carries goods from place of surplus to the place of scarcity (place utility). It makes goods available for use in future through storage (time utility ). 2. Dealings in goods and services. ~ye~ busin tss eote_rp~pr_o_d\lg.s and/or !!¥.fl ~ andJC01ices for sclling-lhem-10-oth~) Goods may be consumer goo or ~fo -l'.ic!er g~~ Consumer good~ are meant for drrect use by the u 1ma consum era, e.., read, ea, shoes, etc. Producer goods are used for the production of consu mer or capital goods like raw materials, machinery, etc. Services like transport, warehousing , banking, insurance, etc. may be considered as intangible and invisible goods. Servic es facililate buyina and selling of goods by overcoming various hindrances in trade.. I ' I ,. i "''". '1 lll I __....--- - - ~ ,. \. ' , u ~~ l' " _,,_,.,.-- l. ,._, ~ - \' , ~ \, ~ \ l ,,. \ , \, _..-..~-- l ts b(f'-1n,(' ,u~ancss Ql)I - -~ (~-~~.~~~-'''~-~~.-~--,-· ----; ~"lll~ 11nd ~'Jrl:)wn,nn. ~·u singl~ isottu~ , ,~~Un,~ ,O i. ~tUl '11\ 1\CClln'iflQ Or rt'fie ~q :\ (\1.n1h,ut~ lo d~ AlhO!',. ,J'llj ,,, l'tl~-n llu~tneS$, ·r , it~ ,\' \ll\\krt-l\.~ ,,n tl ~\\I.tr ~l~\\c~:, l ,. ~1,t1)utul~ ,~ ,~.,r in~t=an~e. ' a ('(non ~lL ,. - u~,~\'\t,"' ,,t n~h.i.(~ 1nJ ~ ~ ·1 "" "'" Attn \\llSlll( 't"" fl~(lney lO cX·thange. 13U( attr ~s ,, l lQl\tll'"-"' tcr~C') ~· ~ Th'tctftvw..' Wl\~\\,'l\ ~r n~h.i~~ at\\l s;.\ Ci \ 1..-h th¢ S