Nature and Purpose of Business Notesss

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NATURE AND PURPOSE OF BUSINESS

After studying this lesson, you will be able to:

dene human activities;

distinguish between economic and non-economic activities;

dene the term ‘business’;

identify various characteristics of business;

explain the obectives of business;

explain the social responsibilities of business; and

explain the types, causes and e!ects of pollution and role of business toreduce environmental

pollution

When we look around us, we observe that most of the people are engaged in various activities.

Teachers teach in the schools, farmers work in the fields, workers work in the factories, drivers

drive vehicles, shopkeepers sell goods, doctors attend patients and so on. In this way, people are

busy during the day and sometimes during the night throughout the year. Now the question arises

as to why we all keep ourselves busy. The answer is to satisfy our wants. By doing so, we eitherdischarge various obligations or earn money through which we can buy goods and avail services.

1.1 HUMAN ACTIVITIES

Activities which human beings underta"e are "nown as human activities# $ecan divide these activities into two categories:

%i& 'conomic activities and %ii& (on-economic activities

(i) Economic activitie

Activities, which are performed with an obective to earn money, are "nown

as economic activities# )or example, farmers grow crops to sell them, a

factory or o*ce employees wor" and get wages or salaries, a business


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person earns prot through buying and selling of goods or services, these

activities are economic activities#

(ii) Non!economic activitie

Activities, which are not performed to earn money but to get somesatisfaction, are called non-economic activities# +hese activities are

performed to discharge social obligation or for physical tness or for

recreation etc# eople visiting places of worship, providing relief to the

victims of ood and earth.ua"e, engaging in sports activities, gardening,

listening to radio or watching television are few examples of non-economic

activities

T"PES OF ECONOMIC ACTIVITIES

$e "now that economic activities are underta"en to earn money# /enerally,people engage themselves in such activities on a regular basis and are said

to be engaged in their occupation# 0ccupations may be classied into three

broad categories#


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(i) B#ine$ 1usiness refers to an occupation in which goods and services

are produced and sold in return of money# 2t is carried out on a regular basis

with the prime obective of ma"ing

prot# 3ining, manufacturing, trading, transporting, storing, ban"ing, and

insurance are examples of business activities#

(ii) P%o&eion: A person may not be an expert in every eld# 4o, we re.uire

services of others who speciali5e in one eld or other# )or example, we need

the services of doctors for our treatment, lawyers to get legal support etc#

+hey are all engaged in profession#

+hus, profession refers to an occupation, which re.uires speciali5ed

"nowledge and training to pursue it and primary obective of every

profession is to provide service# A professional body regulates every

profession# +hese professionals have a code of conduct developed by

the concerned professional body#

(iii) Em'oment$ 'mployment refers to an occupation in which a person

wor"s regularly for another and gets wages6salary in return# /overnment

servants, company executives, ban" o*cials, factory wor"ers are said to be

in employment# 2n employment there are certain terms and conditions

regarding wor" to be performed, hours of wor", amount of wages6salary and

other facilities, if any# +he employer who o!ers employment normally

decides these conditions# +he person see"ing a ob must oin the wor" only

after being satised with the terms and conditions#

+he remuneration payable to an employee is xed and is paid in the form of

wage or salary#


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Nature and Purpose of Business Notesss

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