Nature_and_Purpose_of_Business_Class_11_BST.pdf

Nature and Purpose of Business 1. Introduction to Business Business refers to an occupation in which people regularly engage in activities related to purchase, production, and/or sale of goods and services with the intention of earning profits. It is a dynamic a...

Nature and Purpose of Business 1. Introduction to Business Business refers to an occupation in which people regularly engage in activities related to purchase, production, and/or sale of goods and services with the intention of earning profits. It is a dynamic and complex activity that plays a vital role in the economic development of a country. Characteristics of Business: 1. Economic activity 2. Production or procurement of goods and services 3. Sale or exchange of goods and services 4. Regularity in dealings 5. Profit earning 6. Risk factor 2. Economic and Non-Economic Activities Economic activities are those activities that are undertaken with the objective of earning money or livelihood, such as business, profession, and employment. Non-economic activities are activities performed out of love, sympathy, sentiment, or patriotism, such as social services, charity, etc. 3. Types of Business Activities Business activities can be divided into two broad categories: a) Industry: It refers to economic activities, which are connected with the conversion of resources into useful goods. For example, mining, manufacturing, etc. b) Commerce: It includes all activities related to the exchange of goods and services. Commerce helps in the smooth functioning of industries by ensuring a proper distribution of goods. 4. Business Objectives Business objectives are the goals that a business seeks to achieve. They can be classified into the following: a) Economic Objectives: These include earning profit, creating customers, and innovating new products. b) Social Objectives: These include providing quality products at fair prices, creating employment, and fair trade practices. c) Human Objectives: These include the welfare of employees, providing good working conditions, and training and development. d) National Objectives: These include contributing to the country's economic development, paying taxes, and reducing poverty. e) Global Objectives: These include expanding business at the international level and global trade practices. 5. Classification of Business Activities Business activities can be classified based on various criteria: a) On the basis of size: Small, Medium, and Large businesses. b) On the basis of ownership: Sole proprietorship, Partnership, Company, Cooperative Society. c) On the basis of sector: Primary, Secondary, and Tertiary sectors. 6. Role of Profit in Business Profit is the primary objective of any business. It is the reward for the risk taken in business activities. Profits help in the survival, growth, and expansion of business. However, excessive focus on profit can lead to unethical practices, exploitation, and harm to society. 7. Factors Affecting Business Business is influenced by various factors: a) Internal Factors: These include the nature of the business, management structure, employee relations, and internal processes. b) External Factors: These include economic conditions, government policies, legal regulations, social trends, and technological advancements.