Sunday, 29 January 2012

Nature And Scope of A business.

Introduction.
The word business technically means  a state of being busy.Every person is engaged in some kind of occupation .a farmer works in the field.a worker works in the factory.a clerk does his office work in a office a teacher teaches in the class.a salesman busy in the selling goods .an entrepreneur is busy in running his factory.
the primary aim of all these person is to earn their livelihood while doing some work.

all creative human activities relating to the production of goods or services for satisfying human wants are known as business.it is also a gainful procedure through which individuals and groups exchange goods and services.human activities may be categorized as economic and non economic.
Simple Meaning
business includes all those legal activities.which are related with earning profit.
business includes all the economic activities which are related with earning wealth.
Definition
James Stephenson
Every human activity which is engaged in for the sake of earning profit may be called business.
L.H Haney
human activity directed towards producing and acquiring wealth through buying and selling goods.
Characteristics of business
From the above mentioned definitions the following essential characteristics are derived;
1.Entrepreneur
There must be some one to take initiative for establishing a business.The person who recognized.The need for a product or service is known as entrepreneur.The entrepreneur is a key figure in the process of economic growth .
2.Economic activities.

3.Deals In Goods And Services.
Business always deals in goods and services .The goods include to both customers goods like clothes ,shoes,toothpaste,and industrial goods like ,raw material,tools and machinery.
4.Risk.
The business involves a greater element of risk and uncertainty .In fact,a business man tries to foresee the future uncertainties and plan his business activities accordingly.
5.Profit.
Profit is the most important character of business.Business is started for purpose of earning profit.Profit is driving force of every business activity.
The incentive of earning profits keeps a person in business and is also necessary for the continuity of business .This does not mean that there will be no chances of losses in business.
6.Production.
Business always deals on production of goods and services.The object of business is to provide goods and services to society for the purpose of earning profit.The goods must be produced or manufactured .So that these can be sold in market.
7.Sales.
Sales are related with the transfer of values .The production for personal use does not come under the scope  of business for example if a shoe maker makes a pair of shoes and wear himself .his act is not treated as business.If a person makes a pair of shoes for the purpose of selling,now his act is treated as business.
8.Finance.
Finance is another important character of business .No businessman can start business without finance ,finance is the lifeblood of every business organization.
9.Management.
Every enterprise needs an organization for its successful working.Various business activities are divided in to departments ,sections and jobs .and organization creates the framework for managerial performance and helps in coordinating various business activities .
10.Regularity.
In business,only those transactions are included which have regularity and continuity .and isolated transaction
will not be called business ,even if the person earns profit from that deal.A person builds house for himself.but later on sell it on profit.
11.Creation of utility.
The goods are provided to the consumer as per there liking and requirements.Business creates various types of utilities in goods so that consumer may use them.
12.Consumer Satisfaction.
The ultimate aim of business is to supply goods to the consumers,The goods are produced for the consumers.If a consumer is satisfied the he will purchase the same thing again.Otherwise he will go for an alternative commodity.
13.Islamic Process.
It is a sayings of the holy prophet (p.b.u.h)that 9/10 of the rizq lies in business.In this sense business as an Islamic way to earn livelihood income from business is known as profit which is also called risque-e-halal .
the holy prophet did himself proper business.
14.Planning.
Planning is the most important character of business .Planning is related with all the activities of business.
planning is always based on past experience.
15.Conclusion.
It is saying of the holy prophet (p.b.u.h) that 9/10 risque lies in business .We can say that a good business man should have these characteristics in his business.in our opinion planning is is the most important character of business.because a business without planning is just like a ship without rudders.
Objectives of business.
Profit is not the only objective of business.every work is started with an objective.The objective is a goal.the achievement of which is a necessity and all efforts are concentrated for the fulfillment of the objective,according to the peter drucker, objectives are needed in every area where performance an results directly and vitally affect survival and prosperity of the business .
1.Profit Earning.
It can not be denied that business is started for earning profits.Profit is basic incentive to business pursuits .Profits are needed to face various uncertainties like trade cycle,change in demand pattern ,fluctuations in money markets.A business needs profits not only for its existence but also for expansion and diversification .The investors wants an adequate return on their investments,worker wants higher wages and the entrepreneur needs money for reinvesting .
2.Production of goods.
The profit can be earned only when some exchange of goods and services takes place .so the next objective is to produce more goods and sell them to the consumer.
3.Creating Markets.
The aim of the businessman is to sell products.Marketing consist of these efforts which effects transfer in ownership of goods and care for their physical distribution.
4.Technological improvement.
A businessman should always strive to use latest methods of production.In the world of competition everybody tries to sell his products by offering goods quality products at lower prices.
B.Human Objectives.
Human objective of business requires that a workable balance should be maintain among the claims of various interested groups like employees,shareholders and consumers.these objective can be discussed as follow.





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