Upload
emmy-nestory
View
218
Download
0
Embed Size (px)
Citation preview
7/29/2019 nature of the business
1/38
TRIVANDRUM
INTERNATIONAL SCHOOLWelcomes you to XIcommerce class
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
2/38
Chapter
1
7/29/2019 nature of the business
3/38
What is business ?
How we identify it is a business?
Do we need a permanent place to start thebusiness ?
What is the ultimate aim behind business?
Find some business organization around yourLocality?
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
4/38
Business? Business is an Economic activitywhich involves regular production
and or exchange of goods andservices with the main purpose ofearning profits through thesatisfaction of human wants.
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
5/38
Familiar the meaning OF
Business?1.business involves production andexchange of goods.
2.Its main aim is to earn profit.3.It must satisfy human wants.
These activities are organised and
performed under the framework ofan institution known as businessorganisation /firm/enterprise.
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
6/38
According toB.O Wheeler, Business is
an institution organised and operatedto provide goods and services tosociety under the incentive of privategain.
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
7/38
Business ?
Business pervades all humanactivities directed towards earning
profits or economic gains.
Industry,trade,Banking,Transport
,Insurance,warehousing,advertising etc are integral part of modernbusiness.
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
8/38
TYPES OF ECONOMIC
ACTIVITYECONOMIC ACTIVITIES
BUSINESS PROFESSIONEMPLOYMENT
TRADEINDUSTRYBANKING
TRANSPORTATIONINSURANCE
WAREHOUSINGADVERTISING ETC.
MEDICALLEGAL
CHARTERED ACCOUNTANT.
MANAGERFOREMAN
CLERKSALESPERSONWORKER,ETC..
.TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
9/38
Definition of Business Business refers to all those activitieswhich are concerned with the
production and /or purchase and saleof goods or services with the purposeof selling them at a profit.
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
10/38
Characteristics of business Economic Activity Production or procurement (acquisition of goods for the
purpose of sale)
Dealing in goods and services;( goods are consumer goodsand capital goods) Satisfaction of consumer wants Regular dealings (continuous supply of goods and services) Profit motive Uncertainty.
Risk element Creation of utility
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
11/38
Objectives Of Business
Business objectives as the purpose orthe reason for the existence of thebusiness in the society.
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
12/38
Business activitiesBusiness activities broadly divided in tothree;
They are,a) Economic objectives,
b) social objectives
c)Human objectives
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
13/38
TYPES OF BUSINESS ACTIVITY
ECONOMICOBJECTIVES
HUMANOBJECTIVES
SOCIALOBJECTIVES
1)EARNING OF PROFITCREATION OF CUSTOMERS
3)INNOVATIONEFFECTIVE UTILISATION
OF RESOURCE
1)GOOD SERVICE ANDFAIR DEALINGS2)TREATING EMPLOYEES
AS PARTNERS3) DEVELOPMENT OF EMPLOYEES
SKILLS4) JOB SATISFACTION OF
EMPLOYEES
1)BETTER QUALITY PRODUCTS2)FAIR TRADE PRACTICES
3)GENERATION OF EMPLOYMENTEMPLOYEES WELFARE
4)COMMUNITY SERVICE5)PROTECTION OF EMPLOYMENT
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
14/38
NECESSITY OF PROFITABILITY
OBJECTIVE ACCORDING TO PETER. F. DRUCKER
A BUSINESS MUST ACHIEVE SUFFICIENTPROFITS TO COVER THE RISKS OF
ECONOMIC ACTIVITY AND THUS TO AVOIDLOSS
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
15/38
A BUSINESS MUST EARN ADEQUATEPROFITS BECAUSE OF THE FOLLOWING
REASONS;
MEANS OF LIVELY HOOD
RETURN TO INVESTORS REWARD FOR RISKS SOURCE OF FINANCE FOR GROWTH AND
EXPANSION
INDICATOR OF EFFICIENT WORKING GOODWILL OR REPUTATION
TRIVANDRUM INTERNATIONAL SCHOOL
7/29/2019 nature of the business
16/38
Can profit be the sole
objective of a Business A lay man may say that business iscarried on for profit only. But a good
business man cannot afford to keepprofits as his sole objective.
earning of profits cannot be the
objective of a business any more thaneating is the objective of living
7/29/2019 nature of the business
17/38
The argument against the
profit maximisation are; Profit maximization ignores the interests oflabour,customers,and the society.
Unfair means such as hoarding, black marketing or
adulteration may be followed to maximize profits. Long term interest of the business may be ignoredto maximize profits in the short run.
In the present day environment, a business can'tbe effective with the sole objective of profit
maximisation.It must also set objectives in areaslike customer satisfaction, employee welfare,community development, environment protectionetc..
7/29/2019 nature of the business
18/38
Multiplicity objectives of a
Business According to peter f Druckerremarked To manage a business is to
balance a variety of needs and goals.And this requires multipleobjectives
He suggests 8 areas whereobjectives must be set.
7/29/2019 nature of the business
19/38
Multiplicity objectives of a
Business 1 market standing (eg; Bata) 2 Innovation (eg; Hero Honda) 3 productivity( It is the ratio b/w output and inputs in
production process. it is considered as the efficiency of theenterprises.)
4 Human organization-workersattitude andperformance
5 Physical and financial resources 6 managarial performance 7 social rresponsibility 8 profitability-reasonable rate.
7/29/2019 nature of the business
20/38
Classification of business
activities Business activities are classified onthe basis of 3 criteria,ie,
1 size
2 ownership
3 functions
7/29/2019 nature of the business
21/38
Classification of business
activities On the basis of size business activities areclassified as
1 small scale
2 large scale Small scale the investment does not
exceed Rs 100 lakhs.
Large scale means the investment exceed 1Crore
7/29/2019 nature of the business
22/38
Classification of business
activities On the basis of OWNERSHIPbusiness activities are classified as
Public sector under the govt. control pvt sector-under private control
Joint sector both govt. and private
7/29/2019 nature of the business
23/38
Classification of business
activitiesPublic enterprises may be organized as Departmental undertaking Government company
Statutory corporation etc
But pvt.enterprises are like;Sole trader,
Joint Hindu family
PartnershipJoint stock company
And co-operative society.
7/29/2019 nature of the business
24/38
Classification of business
activities On the basis of functions businessactivities are classified in to two;
Industry and commerce Commercial activities are again
classified as ; trade
and aids to trade
7/29/2019 nature of the business
25/38
BUSINESS ACTIVITIES
INDUSTRY COMMERCE
Trade1 EXTRACTIVE
2 GENETIC3 MANUFACTURING4 CONSTRUCTION
Aids to Trade
Home trade;1)Retail trade
2) wholesaletrade
Foreign trade1 import2 export
3 Entrepot
TransportWarehousing
Insurance
Bankingadvertising
7/29/2019 nature of the business
26/38
A brief review of the various types of
Business activities
1 Industrial activities or Enterprise;It includes mining ,breeding,costruction of roads
building,etc....(manufacturing,mining,constructions )
.2Commercial activities;commercial activities involve exchange of goods and serviceslike...transport, ware housing,banking,insurance and advertisement.
.3 Trading activities or firms;it refers to purchase and sale of goods to earn profits
by the business men known as traders. They engaged in a)Home trade - includes wholesale and retail
b) foreign trade- import-export and entreport
7/29/2019 nature of the business
27/38
A brief review of the various types
of Business activities Service activities or enterprises;
These include those serviceswhich facilitate smooth trade and also serve as
the back born of modern industry.banking,insurance,transportation,warehousing,
insurance, packaging.
7/29/2019 nature of the business
28/38
Types of industries Primary industry; it includes extraction,producing and processing of naturalresource (extractive+ Genetic)
Secondary industry are concerned withprocessing materials which have alreadybeen produced at the primary stage.
Manufacturing and construction industry is
under secondary industry.
7/29/2019 nature of the business
29/38
Manufacturing industry may
assume the following forms Analytical industry;petrolium refiningis an example of analytical industry.
Synthetic industry; two or morematerials are mixed together in themanufacturing operations to obtain
some new products.like soap,cementetc
7/29/2019 nature of the business
30/38
Manufacturing industry may
assume the following forms Processing industry;raw materials are processed through a
series of manufacturing operations making
use of analytical and synthetic method)-textile sugar and steel.Assembly line industry;in assembly industry, the finished products
can be produced only after variouscomponents have been made and thenbrought together for final assembly.automobile watches,telivision are examples
7/29/2019 nature of the business
31/38
Construction industry may
assume the following forms They are concerned with making ofroads,bridges,dams and canals.
7/29/2019 nature of the business
32/38
Definition of trade Trade is that branch of commercewhich deals with exchange of goods
and services in terms of moneybetween different persons known as
traders
7/29/2019 nature of the business
33/38
Types of trade Trade may be classified on the basis of 1)Geographical area covered
2) volume of trade transaction
On geographical basis trade may beclassified in to two like internal trade andexternal trade.
On volume of trade basis trade is dividedin to two
Wholesale & retail trade
7/29/2019 nature of the business
34/38
Internal or home trade It refers to purchase and sale of goodswithin the boundaries of a country.
Wholesale trade; purchase and sale ofgoods in bulk quantity and sell to retailersat small quantity.
Retail trade; selling of goods by the
retailer to the customer
7/29/2019 nature of the business
35/38
External or foreign trade Import trade Export trade
& Entrepot trade
7/29/2019 nature of the business
36/38
AUXILIARIES TO TRADE Transportation and communication Banking
Insurance ware housing
Advertising
And packaging
7/29/2019 nature of the business
37/38
Differentiate between industry, trade
and commerceindustry commerce Trade
7/29/2019 nature of the business
38/38