BUSINESS AND MANAGEMENT 

Ø  Business meaning :-

·    Business is an activity, in which different persons exchange something of value, whether goods or services, for mutual gain or profit.

·       It is an organized or systematic activity.

·       Business involves regular or recurring purchase and sale of goods and services with the purpose of earning profits through the satisfaction of human needs.

·       Repeated dealings rather than a single isolated transaction constitute business.

Various experts have defined business in different ways. Some of the popular definitions of business are given below:

·       L.H. Haney: "Business may be defined as human activity directed towards producing or acquiring wealth through buying and selling of goods".

·       L.R. Dicksee - "Business is form of activity pursued primarily with the objective of earning profits for the benefit of those on whose behalf the activity is conducted."

·       James Stephenson - "Economic activities performed for earning profits are termed as 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, form 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 effectively 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 - Every business enterprise produces and/or buys goods and services for selling them to others. Goods may be consumer goods or producer goods. Consumer goods are meant for direct use by the ultimate consumers, e.g., bread, tea, shoes, etc. Producer goods are used for the production of consumer or capital goods like raw materials, machinery, etc. Services like transport, warehousing, banking, insurance, etc. may be considered as intangible and invisible goods. Services facilitate buying and selling of goods by overcoming various hindrances in trade.

3.       Continuity in dealings - Dealings in goods and services become business only if undertaken on a regular basis. According to Peterson and Plowman, "a single isolated transaction of purchase and sale will not constitute business. Recurring or repeated transaction of purchase and sale alone mean business." For instance, if a person sells his old scooter or car it is not business though the seller gets money in exchange. But if he opens a shop and sells scooters or cars regularly, it will become business. Therefore, regularity of dealings is an essential feature of business.

4.       Sale, transfer or exchange - All business activities involve transfer or exchange of goods and services for some consideration. The consideration called price is usually expressed in terms of money. Business delivers goods and services to those who need them and are able and willing to pay for them.

5.       Profit motive - The primary aim of business is to earn profits. Profits are essential for the survival as well as growth of business. Profits must, however, be earned through legal and fair means. Business should never exploit society to make money.

6.       Element of risk - Profit is the reward for assuming risk. Risk implies the uncertainty of profit or the possibility of loss. Risk is a part and parcel of business.

7.       Economic activity - Business is primarily an economic activity as it involves production and distribution of goods and services for earning money. Only economic activities are included in business. Non-economic activities do not form a part of business.

Art as well as science - Business is an art because it requires personal skills and experience. It is also a science because it is based on certain principles and laws.