DEFINE BUSINESS. WHAT ARE ITS CHARACTERISTICS ??
DEFINITION:
within the words of LH.Haney “Business could also be defined as human activities directed towards providing or acquiring wealth through buying and selling of products . consistent with Wheeler Business is an institutional organised and operated to supply goods and services to the society under the motivation of personal guin Sprieal considers all activities concerned with production and sale of products are business activities An analysis of the above definitions brings out the subsequent characteristics of business
CHARACTERISTICS:
1) Economic activities: All those activities concerning the assembly and distribu tion of products and services are called economic activities Business is carried on with a profit motive. Any activity undertaken without economic considerations won’t be a part of business
2) Deals with goods and services : Every business produces or purchases goods and services with a view to selling them for profit Goods could also be commodity or producer goods. commodity like coffee, bread or shoes are meant for direct use by the consumers Producer goods are used for the assembly of consumer or capital goods like raw materials, machinery etc Services like transport, warehousing etc, could also be considered as intangible and invisible goods
3) Exchange of products and services: A business must involve exchange of products and services with a profit motive Production or purchasing of products and services for private consumption don’t constitute business. the acquisition of products should be to sell them again. If an individual cooks his food reception , it’s not business, but if an equivalent person cooks at a restaurant it’s business because he exchanges his services for money
4) Continuity of transactions: In business only those transactions are included which have regularity and continuity. An isolated transaction won’t be called business, albeit the person earns take advantage of the deal. an individual build a house for himself but afterward sells it for a profit, it’s not business. On the opposite hand, if a house savings and loan builds houses and sells them this may be called business
5) Profit motive: The profit motive is a crucial element of business. Profits are essential for the survival also because the growth Profit must, however, be earned through legal and fair means. Business should never exploit society to form money
6) Risk and uncertainty: The business involves an outsized element of risk and uncertainity. The factors on which business depends are never certain, therefore the business opportunities also will be uncertain. There could also be shift in demand, strike by employees, floods, war, fall in prices etc. A business man can reduce risks through correct forecasting and insurance, But all risks can’t be eliminated
7.Creation of utility: Business creates various sorts of utilities in goods in order that consumers may use them The utility could also be form utility, place utility and time utility
When raw materials are converted into finished goods it creates form utility. When the products are transported from the places of production to the last word consumers, it creates place utility. the method of storing goods once they aren’t required and supplying them at a time once they are needed is named creation of your time utility,
8) Art also as science : Business is an art because it requires personal skills and knowledge . it’s also a science because it’s supported certain principles and laws