Business activities are connected with raising, producing or processing of good Industry creates from utility to goods by bringing material into the work which is useful for intermediate consumption (example,,, further use of material on order industry) or final consumption by consumer
Classification
Business activities are classified on the basis of size, ownership and function
1, Activities on the basis of size
On the basis of size, business activities may be broadly grouped into two categories
a, Small size:
Small scale units require less capital. They employ small number of workers and produce the good on small scale. Example:Manufacturing textiles in hand looms or power looms
1) Extraction of edible oil from seeds like ground nut, sesame, through traditional wooden churner.
B) Large scale:
Large scale units require huge capital. They employ large number of workers and produce the goods on large scale.
Examples
(1) Manufacturing Textiles in a large textile mill. Example. Raymond's, RAMA cotton
(2) Extraction of edible oil from oil seeds in oil mills. Example. Suffolk, Sunflower
2) Activities on the basis of ownership:
On the basis of business activities may be broadly grouped into three categories.
a) Private enterprises:
An enterprise is said to be where it is owned, managed and controlled by persons other than Government.
1) Sole proprietorship.
2) partnership firms. Example-Ramesh bros
B) public enterprises:
An enterprise is said to be a public enterprise where it is owned managed and controlled by government or any of its agencies or both. Public enterprise may be organized in such as,
1) Department undertaking - Public Works Department (PWD)
2) Public corporation - Oil and natural gas corporation (ONG)
3) Government company - state trading corporation (STC)
C) joint Enterprise:
An enterprise is said to be a joint enterprise where it is owned, managed and controlled by Government and private entrepreneurs.
3) Activities on the basis of function
On the basis of function, business activities may be broadly into two categories
a) Industry:
Industry includes all those business activities which are connected -- bread, butter, cheese, shoes, or capital goods like machinery
b) commerce:
It establishes a link between the producers and consumer of goods and maintains a smooth and uninterrupted flow of goods from producers to consumers
Characteristics of business
The essential characteristics of business are as follows:
1) production or procurement of goods
Goods must be produced or procured in order to satisfy human wants.
2) Sale, Transfer or exchange
There must be scale or exchange of goods or services. When a person weaves cloth for his personal consumption., it is not business because there is no transfer or scale.
3) Dealing in Goods or Services
Goods produced or procured may be consumer goods like cloth, pen, brush, bag etc, or producer - goods like plant and machinery. Services refer to activities like supply of electricity, gas or water, transportation, banking, insurance etc.
4) profit motive
An important feature of business is profit motive. Business is an economic activity by which human beings make their living. It is, in fact, the attraction of profit which spurs people to do business.
5) Regularity of dealings
An isolated dealing in buying and selling does not constitute business. The transactions must be regular. For example, if a person buy a scooter for is use and later on disposes it of at a profit, he cannot be said to have been engaged in business. The buying and selling must be recurrent to constitute business.
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