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Unit1 nature of business

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  • In order to ensure productivity of training, we need to be….
    - Punctual……………..
    - Put mobile on vibration and do not receive calls within the training room……………..
    - Not dropout from the training without permission……………..
    - Be more interactive…………….
    L-look interested-get interested
    I-Involve yourself by responding
    S-Stay on target
    T-Test your understanding
    E-Evaluate the message
    N-Neutralize your feelings
  • In order to ensure productivity of training, we need to be….
    - Punctual……………..
    - Put mobile on vibration and do not receive calls within the training room……………..
    - Not dropout from the training without permission……………..
    - Be more interactive…………….
  • What You Have Learnt
    Human activities involve efforts under taken to satisfy human needs, to earn one’s
    livelihood, or to derive mental satisfaction. Economic activities are undertaken by
    people to earn one’s living and for production of wealth.
    Non-economic activities are social activities which people undertake to derive
    personal satisfaction. Economic activities are of three kinds (i) profession,
    (ii) employment and (iii) business. Activities which require special knowledge
    are known as profession. When people work for remuneration, they are said
    to be in employment. Activities connected with production, purchase or sale
    with the object of earning profit are called business activities. Business
    activities may be classified as (i) industry and (ii) commerce. Industry includes
    production of goods. Commerce is related with sale, exchange and transfer
    of goods and services.
    On the basis of functions there are two broad categories of business : (i)
    industry, (ii) commerce. Industry may be of two types - primary and secondary.
    Primary industries may be extractive and genetic. Secondary industries are of
    two types: manufacturing and construction. Commerce includes trade and
    aids to trade. Trade is classified as home trade and foreign trade. Home trade
    may be retail trade and wholesale trade. Foreign trade is of two types:
    import and export. Industry, trade and commerce are closely related to each
    other. Transport provides for movement of goods. Banking provides financial
    facilities to business. Insurance provides security against risks. Warehousing
    provides storage facilities.
  • Understanding the Business System
    Internal & External Factors affecting the business
    Trends is the Business world
    National & international Business
  • You know that man always keeps himself engaged in some kind of activity
    to satisfy his needs and wants.
    TRY & MEMORIZE THIS AND SPEAK
  • However, a particular kind of activity which is non-economic in one case
    may be economic in the other. Cooking by a housewife is non-economic but
    cooking in a hotel is an economic activity.
  • Definition
    Economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth. Every business requires some form of investment and a sufficient number of customers to whom its output can be sold at profit on a consistent basis
    "The simplest definition of business is you solve a customer's problem and create sustainable profits over time. Anyone with vision should understand the problem they're solving. The problem with business today is that people think the meaning is about building a monument to yourself. The meaning of business is having an impact on people's lives." My definition was close:
    A business' purpose is to attract and keep customers. Its one basic function is to reliably solve customer problems...
    The occupation, work, or trade in which a person is engaged: the wholesale food business.
    Investment Dictionary: Business
    1. An organization or enterprising entity engaged in commercial, industrial or professional activities. A business can be a for-profit entity, such as a publicly-traded corporation, or a non-profit organization engaged in business activities, such as an agricultural cooperative.2. Any commercial, industrial or professional activity undertaken by an individual or a group.3. A reference to a specific area or type of economic activity.
    Investopedia Says:1. Businesses include everything from a small owner-operated company such as a family restaurant, to a multinational conglomerate such as General Electric.2. To "do business" with another company, a business must engage in some kind of transaction or exchange of value with that company.3. In this sense, the word "business" can be used to refer to a specific industry or activity, such as the "real estate business" or the "advertising business".
    .
    A business (also known as a company, enterprise, and firm) is a legally recognized organization designed to provide goods or services, or both, to consumers, businesses and governmental entities.[1] Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Notable exceptions include cooperative enterprises and state-owned enterprises. Businesses can also be formed not-for-profit or be state-owned.
    The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings.
     
    What is business? A business can be defined as an organization that provides goods and services to others who want or need them. When many people think of business careers, they often think of jobs in large wealthy corporations. Many business-related careers, however, exist in small businesses, non-profit organizations, government agencies, and educational settings. Furthermore, you don't need a degree in business to obtain many of these positions. In short, every sector of our economy needs people with strong overall skills that can be applied to business-type careers. There are a wide variety of career areas that exist in business settings. Some of these include:
    Accounting
    Administrative management
    Business management
    Finance
    Human resources
    Information systems
    Insurance
    Marketing
    Operations management
    Public relations
    Purchasing/merchandising
    Retail management
    Sales
  • Business:
    Activities connected with the production or purchase and sale of goods or
    services with the object of earning profit are called business activities. Mining,
    manufacturing, trade, transportation, insurance, banking are business activities.
    Thus business may be defined as an economic activity involving regular
    production or purchase and distribution of goods and services with the
    object of earning profits.
    Profession:
    Any activity which requires special knowledge and skill to be applied by an
    individual to earn a living is known as profession. For example doctors,
    teachers, lawyers, engineers and accountants are engaged in profession.
    Profession involves intellectual activity. It is not a mechanical or routine
    operation.
    The main characteristics of profession are
    (i) Every profession requires special knowledge and training.
    (ii) The primary objective is to render service.
    (iii) The service cannot be substituted by another individual.
    (iv) Every profession is regulated by a professional body. For example the
    profession of Chartered Accountants is regulated by the Institute of
    Chartered Accountants of India.
    Employment
    When a person works regularly for others and gets wages/salary in return, he
    is said to be in employment. Thus factory workers, office assistants and
    managers are said to be in employment. Those in employment are called
    employees. Employment may be in government department or in private
    organisation. It may be full-time or part-time, permanent or temporary. The
    main features of employment are :
    (i) Employees always work for others.
    4 :: Commerce (Business Studies)
    (ii) There are certain terms and conditions of work.
    (iii) The people involved earn fixed income.
    Vocation
    Vocation means an occupation which involves the use of some basic skills
    which can be developed by practice. Type-writing, tailoring, laundering,
    carpentry etc. are some examples of vocation. Those who wish to get employed
    after completing secondary education may acquire the basic skills required
    for any vocation.
    Distinction between Business, Profession and Employment
    Basis Business Profession Employment
    1. Primary Earning Rendering Earning
    Objective profit paid service wages/salary
    2. Reward Profit Professional fee Salary/wages
    3. Nature of Prodeuction of Expert Job
    work purchase and sale serve performance
    4. Qualification Undefined Professional As per the need
    training of the employer
  • They collect professional fee from their clients for the services rendered to them .They generally have membership of a professional body which enforces code of conduct among the members of the profession .For instance ,Bar Council of India is the professional body which guides and regulates the law profession in India .The professional body also prescribe the nature and type of education and training required to practice the concerned profession .
  •  
     All business enterprises irrespective of the size (Tata Iron & steel Company Ltd or a vendor outside the college gate),nature of business (Hotel Ashok or Hindustan Lever Ltd)and ownership (DCM Or H.M.T) have in common the following features
  •  
     The nature of business is best understood on the basis of its characteristics or features which are as follows:
  • Objectives of Business
    You want to perform well in your examination; you want to earn money to sustain your
    livelihood; you want to be a good citizen; you want to help the poor and needy people.
    What are these? These may be different objectives that you want to achieve in your life. In
    the similar way every business has several objectives, which it wants to achieve. What are
    those objectives?
    In this lesson let us learn about various objectives of business.
    3.1 Objectives
    After reading this lesson, you will be able to:
    ! state the meaning of objectives of business;
    ! classify objectives of business into economic, social, human, national and global;
    ! explain the nature of various objectives and their significance;
    ! state the meaning of business environment; and
    ! recognise the various components of business environment.
    3.2 Objectives of Business - Meaning
    An objective is something you want to achieve. As a learner of NIOS, you may have many
    objectives in mind; one could be to perform well in the examination. Similarly,
    business objectives are something which a business organization wants to achieve or
    accomplish over a specified period of time. These may be to earn profit for its growth and
    development, to provide quality goods to its customers, to protect the environment etc.
    These are the objectives of business. In the following section let us classify the objectives of
    business.
    Business Studies
  • Classification of Objectives of Business
    It is generally believed that a business has a single objective, that is, to make profit. But it
    cannot be the only objective of business. While pursuing the objective of earning profit,
    business units do keep the interest of their owners in view. However, any business unit
    cannot ignore the interests of its employees, customers, the community, as well as the interests
    of society as a whole.
    For instance, no business can prosper in the long run unless fair wages are paid to the
    employees and customer satisfaction is given due importance. Again a business unit can
    prosper only if it enjoys the support and goodwill of people in general. Business objectives
    also need to be aimed at contributing to national goals and aspirations as well as towards
    international well-being. Thus, the objectives of business may be classified as -
    a. Economic Objectives
    b. Social Objectives
    c. Human Objectives
    d. National Objectives
    e. Global Objectives
    Now we shall discuss all these objectives in details.
    3.4 Intext Questions 3.1
    Given below are some statements relating to the economic objectives of business.
    Some statements are true and some are false. Identify the true statements:
    i Creation of demand for goods is the primary objective of business.
    ii. Profits are expected to be earned by businessmen in proportion to the amount
    of capital invested in business.
    iii. It is not always necessary for businessmen to make the best possible use of
    materials.
    iv. Businessmen should use profits earned from the business only for their own
    living.
    v. Generation of employment is the primary economic objective of business.
    Intext Questions 3.2
    Which of the following statements relating to social objectives of business are right and
    which are wrong?
    i) Social objective of business is based on the assumption that what is good for business
    is also good for society.
    ii) Production and supply of quality goods to the consumer is the social objective of
    business.
    iii) Creation of demand for the product is a social objective of business.
    iv) Establishment of sports complex for the public is the economic objective of business.
    v) Hoarding and black-marketing are considered desirable on the part of business.
    3.6.
    Intext Questions 3.3
    Below are given some statements regarding human objectives of business. State which of
    them are “true” and which are “false”:
    i. Businessmen should pay proper remuneration which will motivate the workers for
    work.
    ii. Business units should provide social and psychological satisfaction to the employees.
    iii. Businessmen should not help disabled persons unless they are employed in business.
    iv. Business units should ignore the suggestions given by the employees while taking
    important decisions.
    v. Helping physically handicapped persons in the society is an economic objective of
    business.
    3.7
    Intext Questions 3.4
    Fill in the blanks with suitable word(s) from those given in brackets:
    (i) To produce and distribute essential goods at a reasonable price is a/an _____________
    objective of business. (social, national, human)
    (ii) To help the country to become self-reliant business units should aim at increasing
    ________________. (export import, prices)
    (iii) Business units should pay taxes honestly and______________.(occasionally, frequently,
    regularly)
    (iv) Business should provide equal opportunities to all its ________________.(owners,
    employers, suppliers)
    3.8
  • Economic Objectives :
    Economic objectives of business include earning adequate profit or satisfactory
    return on capital invested, survival in the case of competition and growth to
    maintain progress
  • Social Objectives:
    Social objectives include providing employment opportunities, supply of quality
    goods and services at reasonable price, improving the standard of living and
    contributing to environmental protection. It also includes justice to workers
    in terms of wages, welfare amenities, improved service conditions and
    professional growth.
  • National Objectives
    Being an important part of the country, every business must have the objective of fulfilling
    national goals and aspirations. The goal of the country may be to provide employment
    opportunity to its citizen, earn revenue for its exchequer, become self-sufficient in production
    of goods and services, promote social justice, etc. Business activities should be conducted
    keeping these goals of the country in mind, which may be called national objectives of
    business. The following are the national objectives of business.
    Human Objectives
    ! Economic well
    being of the
    employees
    ! Social and
    psychological
    satisfaction of
    employees
    ! Development of
    human resources
    ! Well being of
    socially and
    economically
    backward people
    Business Studies
    32
    i. Creation of employment
    One of the important national objectives of business is to create opportunities for gainful
    employment of people. This can be achieved by establishing new business units, expanding
    markets, widening distribution channels, etc.
    ii. Promotion of social justice
    As a responsible citizen, a businessman is expected to provide equal opportunities to all
    persons with whom he/she deals. He/She is also expected to provide equal opportunities to
    all the employees to work and progress. Towards this objective special attention must be
    paid to weaker and backward sections of the society.
    iii. Production according to national priority
    Business units should produce and supply goods in accordance with the priorities laid down
    in the plans and policies of the Government. One of the national objectives of business in our
    country should be to increase the production and supply of essential goods at reasonable
    prices.
    iv. Contribute to the revenue of the country
    The business owners should pay their taxes and dues honestly and regularly. This will increase
    the revenue of the government, which can be used for the development of the nation.
    v. Self-sufficiency and Export Promotion
    To help the country to become self-reliant, business units have the added responsibility of
    restricting import of goods. Besides, every business units should aim at increasing exports
    and adding to the foreign exchange reserves of the country.
  • http://www.scribd.com/doc/57228282/Enterprise-Economy-Business-Aims-and-Objectives
  • Besides the above traits, the most important qualities of a business are as follows:
    Initiative and capacity to take prompt decision: Now-a-days, things move very fast and as such the businessman should have the capacity to take initiative and prompt decision.
    Determination, courage and perseverance: He must have strong will power and determination. He must have courage and perseverance to face the initial and future problems of the business.
    Intelligence and alertness: The businessman should be alert to his surroundings and he must be aware of the possible changes otherwise he will fail in business. He should be intelligent enough to utilize business opportunities.
    Quality of leadership: He should have the quality of leadership because today's business require loyalty and co-operation of all employees.
    Morality and integrity: The businessman should be honest, straight-forward, fair in dealings, dependability, and moral character. If a businessman intends to make money in a dishonest manner, he cannot establish in business for a long period.
    Training and Education: The businessman should learn the intricacies of modern business through training and education. These are thus essential for a successful businessman.
    Besides the above qualities, the businessman should posses the qualities of tact, patience, foresight, frankness, common sense and charming.
    Characteristics you need to be successful as an entrepreneur
    The 12 letters of the word 'Entrepreneur' can best describe the characteristics of a successful entrepreneur.
    E - Enterprising: The first quality one must have is the readiness to undertake a project or business in which he/she believes in, even though it is untried or unpopular.N - Need to excel: Another characteristic of a successful Entrepreneur is a hunger for success or to be the best.A need to excel in their venture is a 'must - have' quality in a successful business man.
    T - Talented - It goes without saying that all successful businessmen are talented and creative people.It is one of the basic reason for their success.
    R - Risk Taking Ability - For an entrepreneur to be successful, the ability to take take calculated risks is very important.
    E - Economic- An entrepreneur's success also depends in his ability to be economical.'Spend less and get more' attitude helps in reducing the financial burden of the project.
    P - Perseverance - There are always 'ups' and 'downs' in running a business.But to overcome the difficulties and moving on despite the obstacles is a strong trait to have to be successful in business.
    R - Relationship Expert - Building and maintaining relationships helps an entrepreneur sustain his business even in most difficult of times.
    E - Energy - One must be healthy, energetic and fit to run a successful business.The fitness should not only be restricted to physical level but must also include mental strength.
    N - Noisy - This means one has to publicize one's work.Effective Marketing and Communication to the customers and clients is very important.And the best person to do this job is the entrepreneur himself.If he has the ability to communicate his vision to the client or the customer half the battle is won.
    E - Eye for details - Again a very important quality for a successful entrepreneur.Everybody knows that 'beauty lies in the details' and a person expert in this makes his customers happy.
    U - Untouched by Greed - Many a businesses have failed due to greed.Once one starts doing well and earning money they misuse the trust of the customers in order to earn more money.But if one is able to remain balanced and let not money control their emotions they have much brighter chances to earn money and good reputation.
    R - Religious - Religion is 'faith'.It does not necessarily mean to go to the church or temple or any other place of worship.One can have faith in anything.And one must keep that faith.An entrepreneur can only move forward in life & be successful if he keep the faith on, even during darkest of moments.
     
    The businessman to be successful in his business should have certain basic qualities. Businessmen also include office managers in sole trading firm and professional managers in case of company. An important authority has attributed certain traits of a successful businessman. These traits are:
    Physical and nervous energy
    Sense of purpose
    Integrity
    Friendliness
    Intelligence
    Enthusiasm
    Technical mastery
    Technical skill
    Decisiveness
    Faith
  • Take a photocopy out of page no 7
    Most Business must accomplish similar functions regardless of size ,legal structure or industry .These functions are often organized into departments .The common departments in business include
    Business Departments
    Accounting
    Accounting departments examine and analyze money within the company.
    ● Management Accounting – Provides accounts for management
    ● Financial Accounting – Provides accounts for external reports
    Human Resources (Personnel)
    Human resources hires, fires, administrates, motivates and provides services for employees
    ● Payroll – Provides salaries for staff
    ● Recruitment – Recruits new staff
    ● Training – Trains staff
    ● Talent Management – In some companies there will be a special department to manage the
    needs of specialist personnel. e.g. Actors, singers or engineers with specialist skills.
    Marketing and Sales
    Marketing and sales deal with customers and sell the company's products.
    ● Sales – Sell the company's products
    ● New Business – Gets in new customers
    ● Account Management – Manages existing customers
    ● Telesales – Sells via the telephone
    ● Customer service – Provides service after the customer has bought a product
    ● Strategic Marketing – Plans future marketing
    ● Market Research – Analyses customers wants and needs
    ● Advertising – Manages advertising and promotions
    ● Corporate Communications – Provides information to shareholders, customers, employees and
    other stakeholders
    ● Public Relations – Deals with the press
    Operations
    Operations will depend on the type of company. It could be: Production, manufacturing, assembly, design
    or retail.
    Procurement
    ● Strategic Sourcing – Plans materials and suppliers requirements
    ● Purchasing – Purchases supplies on a day to day basis
    Research and Development
    Develop new products
    Information Technology
    ● IT Support – Looks after computers and solves employees' IT problems
    ● Strategic Information Systems – Plans new technology
    ● Data Entry – Enters in information
    Administration
    Deals with paperwork within a company.
    Logistics
    Deal with transporting resources. Can be supplies, products and internal transfers.
    Which Department?
    Which department would deal with the following:
    1. There is something wrong with the accounts computer
    2. Management need the latest sales figures
    3. There is lead in the toys we manufacture and a reporter is asking questions
    4. We need a better phone to compete with Apple's iPhone
    5. We need to improve the quality of our Radio adverts
    6. We need to ensure that our key design team do not find jobs with our competitors
    7. We need to hire more people
    8. We need to do the annual accounts
    9. We need to find a way to increase sales by 20% over the next three years.
    10. We need to find out why customers are not buying our orange paint.
    Discuss
    1. How is your company organised?
    2. How do you think that could be improved?
    Page
  • Take a photocopy out of page no 7
    Most Business must accomplish similar functions regardless of size ,legal structure or industry .These functions are often organized into departments .The common departments in business include
    .
    Which Department?
    Which department would deal with the following:
    1. There is something wrong with the accounts computer
    2. Management need the latest sales figures
    3. There is lead in the toys we manufacture and a reporter is asking questions
    4. We need a better phone to compete with Apple's iPhone
    5. We need to improve the quality of our Radio adverts
    6. We need to ensure that our key design team do not find jobs with our competitors
    7. We need to hire more people
    8. We need to do the annual accounts
    9. We need to find a way to increase sales by 20% over the next three years.
    10. We need to find out why customers are not buying our orange paint.
    Discuss
    1. How is your company organised?
    2. How do you think that could be improved?
  • Which department would deal with the following:
    1. There is something wrong with the accounts computer – IT Support
    2. Management need the latest sales figures – Management accounts
    3. There is lead in the toys we manufacture and a reporter is asking questions – Public
    Relations
    4. We need a better phone to compete with Apple's iPhone – Research and Development
    5. We need to improve the quality of our Radio adverts - Advertising
    6. We need to ensure that our key design team do not find jobs with our competitors –
    Market Research
    7. We need to hire more people – recruitment
    8. We need to do the annual accounts – Financial Accounting
    9. We need to find a way to increase sales by 20% over the next three years. - Strategic
    marketing
    10. We need to find out why customers are not buying our orange paint. - Market research
  • Basic forms of ownership
    The scope of business organization has considerably expanded after the Industrial Revolution. The process of production is now quite complicated. An organization is needed to determine what each person will do and how much authority each will have.
    The role of business organization in various forms of business ownership is discussed in brief.
    Scope of Business Organization
    The scope of business organization has considerably expanded after the Industrial Revolution. The process of production is now quite complicated. An organization is needed to determine what each person will do and how much authority each will have. The role of business organization in various forms of business ownership is discussed in brief.
     
    (1) In Sole Proprietorship
    Form of business, the organization structure is very simply. The entrepreneur generally introduces his own capital. He alone is the sole organizer, financier, decision taker, operator, and controller and above all responsible for air the success and failures of business, there is generally rule sub-division of main work into small groups.
     
    (2) In a Partnership Form of Business
    ownership, each partner provides capital, labour and management according to an agreement the partners determine among themselves the extent to which each partner shall take part in the management. The pattern of division of activities, determination of responsibilities. Delegation of authority etc depends upon the nature and size of business. As the partnership business is generally run on small scale, the business organization structure is relatively simple, temporary and informal.
     
    (3) In a Company Form of Business
    There is a formal pattern of organization. The work of organization begins even before its incorporation by the promoters. This work of organization continues after incorporation. An organization chart of responsibilities is prepared. The duties and responsibilities of the personnel employed are defined, procedures are aid down. Methods are evolved discussed and put before the personnel’ in clear terms. The scope of business organization in corporate business is quite wide and complicated.
    Types of Business Ownership
     
     
    Proprietorship – business owned and operated by one person 74% of all USA businessesAccounts for 6% of all sales in USA
     
    Advantages: (1) decisions are made by only the owner; (2) simple process to start – just get a business license (3) profits belong to the owner; (4) pride of ownership; (5) lower taxes
     
    Disadvantages: (1) unlimited liability (personal assets at risk); (2) limited life of business (when the owner quits/can’t work, the business ends); (3) difficult to raise capital for business; (4) risk of lost is not shared
     
    Partnership - business owned and operated by two or more people8% of all USA businessesAccounts for 4% of all sales in USA
     
    Advantages: (1) easy to start (should have all the agreements spelled out ahead of time); (2) not many regulations; (3) not as difficult to raise capital for business; (4) combination of knowledge and skills;
     
    Disadvantages: (1) unlimited liability; (2) profits are shared; (3) limited life of the business; (4) disagreements
     
    Corporation - business owned by stockholders/investors but operated by officers
    18% of all USA businessesAccounts for 90% of all sales in USA
     
    Advantages: (1) easy to raise capital (stocks, loans); (2) limited liability; (3) unlimited life of business; (4) hire specialized skills and knowledge; (5) shared risks
     
    Disadvantages: (1) difficult to start; (2) less direct control; (3) double taxation: corporate tax and individual tax; (4) limited activity
     
    Multi-nation corporations (international or global business) are businesses that sell or produce products in more than one country.
     
    Non-profit Organizations (not-for-profit) are institutions that try to cover their operating costs. They usually offer a service that is considered beneficial to society. (The Red Cross, religious institutions, schools, food banks, etc.)
     
    Franchises – individual business people buy a business, but a certain percentage goes back to the corporation. Franchises must adhere to the corporate regulations. (McDonalds, Krispy Cream, Starbucks)
     
    Ways of financing businesses: (1) stocks; (2) line of credit from a bank; (3) bonds – long term loan. Annually you receive interest and the principal at the end of the term;
     
    Ways of Growing
    Types of Mergers
    (1) horizontal mergers – businesses in the same industry that combine for greater market share and production. Example: the merger of two car dealerships.
    (2) vertical mergers – businesses at different stages of production in the same industry that combine to become more efficient in a market. Example: cars manufacturer merges with a tire manufacturer.
    (3) conglomerate merger – different industries merge to broaden business opportunities. Example: a car dealership merges with a music company
    More results for: What Are The Internal And External Factors That Affect An Organization?
    Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person." This means that unless there is misconduct, the owner's own possessions are strongly protected in law, if the business does not succeed.
     
    Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.
     
    A single person who owns and runs a business is commonly known as a sole proprietor, whether he or she owns it directly or through a formally organized entity.
     
    A few relevant factors to consider in deciding how to operate a business include:
     
    1.General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
    2.Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
    3.In most countries, there are laws which treat small corporations differently than large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
    4.To "go public" (sometimes called IPO) -- which basically means to allow a part of the business to be owned by a wider range of investors or the public in general—you must organize a separate entity, which is usually required to comply with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLCs that sell units (sometimes also called shares), and other more exotic entities as well (for example, REITs in the USA, Unit Trusts in the UK). However, you cannot take a general partnership "public."
    [edit] Commercial law
    Offices in the Los Angeles Downtown Financial DistrictMost commercial transactions are governed by a very detailed and well-established body of rules that have evolved over a very long period of time, it being the case that governing trade and commerce was a strong driving force in the creation of law and courts in Western civilization.
     
    As for other laws that regulate or impact businesses, in many countries it is all but impossible to chronicle them all in a single reference source. There are laws governing treatment of labor and generally relations with employees, safety and protection issues (Health and Safety), anti-discrimination laws (age, gender, disabilities, race, and in some jurisdictions, sexual orientation), minimum wage laws, union laws, workers compensation laws, and annual vacation or working hours time.
     
    In some specialized businesses, there may also be licenses required, either due to special laws that govern entry into certain trades, occupations or professions, which may require special education, or by local governments. Professions that require special licenses range from law and medicine to flying airplanes to selling liquor to radio broadcasting to selling investment securities to selling used cars to roofing. Local jurisdictions may also require special licenses and taxes just to operate a business without regard to the type of business involved.
     
    Some businesses are subject to ongoing special regulation. These industries include, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can impact many kinds of businesses in unexpected ways.
     
  • Ratan Tata , tata ,Aditya Birla
    Sole propiership is a business owned by one person and general partnership is a business owned by two or more people, and a corporation is owned by lots of people who have stocks with the company
    Proprietorship is a company made up of one person. Examples would be a housekeeper, a plumber or dog groomer. Their personal finances and the finances of the business can both be attached in the event of a law suit. A partnership would be two or more individuals who decide to share the risk and rewards of the business. Partners may run a restaurant, and accounting firm, or a beauty salon. Corporations are like individuals in the eyes of the law. They are a legal entity separate from the people who operate it. For example, the plumber who was a sole proprietor may choose to incorporate his business - making his business a separate entity from him. He is a paid employee of the corporation. Corporations have all the same rights as an individual in the eyes of the law. If the corporation fails, it is the corporate assets that are lost, not the assets of the employees - even the individuals who may have created the corporation.
    A cooperative is a business or a firm. It belongs to the people / employees - they are therefore owners - and they therfore have an invested stake in the business. Members invest in shares in the business to provide working capital. All profits are set aside for operations and improvements, are returned to co-op members
    Cooperatives can take many forms. For example, a group of single parents may decide to band together to provide a child-care facility so they will have reliable day care for their children. Each parent contributes a certain amount of money and/or time, and in exchange they all have a safe place to leave their children. A credit union is also a type of cooperative. The purpose of a credit union is not to make a profit for itself, but to help each member be more financially secure. By creating their own financial institution, members can receive a higher interest rate on the money they have placed in savings and receive a lower interest rate on loans. Retailers have also started establishing co-ops. Ace Hardware, for example, is a co-op of independent hardware store owners. By banding together, the hardware owners can share advertising costs and receive discounts for bulk ordering of materials and supplies. Sharing costs and discounts allows small hardware stores to compete with large chain hardware stores.
    Cooperative Business is an association of people who are united voluntarily to meet common social, cultural and economic needs. This is done by a jointly owned enterprise.There are many advantages of Cooperative business such as:- It serves the interest of the members rather than the capital invested. - It promotes self help, self responsibility and self organization.- It is considered as a more stable form of business.- This kind of business is more responsible to the customers.- This kind of organization gives more job satisfaction and variety
    The biggest difference between these three is the level of individual financial risk involved.
    sole proprietorship is one person ownership without incorporation, e.g., corner grocery store, a housekeeper, a plumber or dog groomer, Freelance writers, copy editors, photographers and craftspeople,
    partnership involves two persons or more in a business venture, e.g., lawyer partnership, common forms of partnerships are law firms, doctors sharing a small clinic or office, accountants and real estate partnerships. The partners share proportionally the profits or losses.
    A corporation is owned by many people, usually thousands of people through "shares" which is basically a document saying you own a certain percent of a company. The share holders hire "officers" to operate the business, and these officers are people like managers and stuff like that. So in a corporation, the people who own the business do not run it, instead hired officers run it. corporation is a company with limited liability and shareholders, e.g., IBM or MacDonald Restaurants.
    .
    A cooperative (also referred to as a co-op)is a form of business ownership that consists of a group of people who have joined together to perform a business function more efficiently than each individual could do alone. The purpose of a cooperative is not to make a profit for itself, but to improve each member's situation. However, members of certain types of cooperatives do make a profit by selling their product and/or service to customers who are not co-op members. Cooperative Business is an association of people who are united voluntarily to meet common social, cultural and economic needs. This is done by a jointly owned enterprise.
  • What You Have Learnt
    Human activities involve efforts under taken to satisfy human needs, to earn one’s
    livelihood, or to derive mental satisfaction. Economic activities are undertaken by
    people to earn one’s living and for production of wealth.
    Non-economic activities are social activities which people undertake to derive
    personal satisfaction. Economic activities are of three kinds (i) profession,
    (ii) employment and (iii) business. Activities which require special knowledge
    are known as profession. When people work for remuneration, they are said
    to be in employment. Activities connected with production, purchase or sale
    with the object of earning profit are called business activities.
    Business activities may be classified as (i) industry and (ii) commerce. Industry includes
    production of goods. Commerce is related with sale, exchange and transfer
    of goods and services.
    On the basis of functions there are two broad categories of business : (i)
    industry, (ii) commerce. Industry may be of two types - primary and secondary.
    Primary industries may be extractive and genetic. Secondary industries are of
    two types: manufacturing and construction. Commerce includes trade and
    aids to trade. Trade is classified as home trade and foreign trade. Home trade
    may be retail trade and wholesale trade. Foreign trade is of two types:
    import and export. Industry, trade and commerce are closely related to each
    other. Transport provides for movement of goods. Banking provides financial
    facilities to business. Insurance provides security against risks. Warehousing
    provides storage facilities.
  • Industry is concerned
    Primary Activities
    Primary businesses and industries are those which extract (i.e. mine, quarry, farm, fish or drill) things normally provided by nature, e.g.~ fish from the sea;~ metal from the earth;~ food from the land.They produce raw materials in the form of oil, iron, coal or limestone, which are used to make other products. Also, they may also produce final products such as fish or fruit.
    Secondary Activities
    Secondary businesses and industries are those involved in manufacturing products. That is, they turn the raw materials produced by the primary industries into things that can be sold and used. e.g.~ metal into cars~ wood into furniture~ wheat into bread
    with the production of goods & services while Commerce involves their distribution .
  • A system is a set of parts ,elements or components which are interrelated and which interact with one another and make up the whole. these elements work together on the inputs as to accomplish common objectives ,that is the objective of the entire systemIn simplest form ,
    *An environment
    *An Input
    *A processing Unit
    *Feedback
    *An output A business organization can be regarded as an open adhesive system with its environment acting as a supra –system.
  • Managers are needed to convert the disorganized resources of men, machines, materials, money, time and space into a useful and effective enterprise. These resources are integrated into a total system for accomplishment of contain goods. Business enterprise as a system, is itself a part of an industry which in turn is a part of the entire economic system.
  • Goal Orientation: is directed towards achievement of specific objectives
    Creativity
    Complexity
    Interdependence
    Diversity
    Dynamism
    Part of Socio-economic system
    Control Mechanism
  • Importance of Business Organization
     
    (1) Product Growth
    activities directed towards production are better grouped through organization. It encourages product growth and diversification.
     
    (2) Efficient Use
    Organization helps in the efficient use of factors of production and thus reduces cost of production of goods.
     
    (3) Technological Improvements
    A good organization provides for the optimum-use of technological improvements.
     
    (4) Creative Thinking
    It stimulates independent creative thinking in various departments of production.
     
    (5) Use of Skilled Salesman
    It is useful in providing skilled salesman for satisfying the various needs of the customers.
     
    (6) Quick Decisions
    The business organization makes easy to take quick decisions.
     
    (7) Recognition of The Problem
    The recognition of the problem, selection of the solution, issuing of the necessary orders can be taken with correct Timings in sound organization.
     
    (8) Fixing of Responsibility
    Fixing of responsibility can easily be pin pointed.
     
    (9) Feed Back
    An organization makes possible to take decisions about production on objective facts gathered from the market.
     
    (10) Mark Functions
    All the marketing functions of goods such as buying! Selling, transporting, storage. financing, risks taking product Standardization and grading, etc., are solved by the business organization.
     
    (11) Minimum Cost
    The organization helps to attain the goals and objectives of the business at the minimum cost.
    A business (also known as a company, enterprise, and firm) is a legally recognized organization designed to provide goods or services, or both, to consumers, businesses and governmental entities.[1] Businesses are predominant in capitalist economies. Most businesses are privately owned. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business itself. The owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for work and acceptance of risk. Notable exceptions include cooperative enterprises and state-owned enterprises. Businesses can also be formed not-for-profit or be state-owned.
     
    The etymology of "business" relates to the state of being busy either as an individual or society as a whole, doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the singular usage (above) to mean a particular company or corporation, the generalized usage to refer to a particular market sector, such as "the music business" and compound forms such as agribusiness, or the broadest meaning to include all activity by the community of suppliers of goods and services. However, the exact definition of business, like much else in the philosophy of business, is a matter of debate and complexity of meanings.
  • Refer to page ni 5 in the book
  • Besides the above traits, the most important qualities of a business are as follows:
    Initiative and capacity to take prompt decision: Now-a-days, things move very fast and as such the businessman should have the capacity to take initiative and prompt decision.
    Determination, courage and perseverance: He must have strong will power and determination. He must have courage and perseverance to face the initial and future problems of the business.
    Intelligence and alertness: The businessman should be alert to his surroundings and he must be aware of the possible changes otherwise he will fail in business. He should be intelligent enough to utilize business opportunities.
    Quality of leadership: He should have the quality of leadership because today's business require loyalty and co-operation of all employees.
    Morality and integrity: The businessman should be honest, straight-forward, fair in dealings, dependability, and moral character. If a businessman intends to make money in a dishonest manner, he cannot establish in business for a long period.
    Training and Education: The businessman should learn the intricacies of modern business through training and education. These are thus essential for a successful businessman.
    Besides the above qualities, the businessman should posses the qualities of tact, patience, foresight, frankness, common sense and charming.
    Characteristics you need to be successful as an entrepreneur
    The 12 letters of the word 'Entrepreneur' can best describe the characteristics of a successful entrepreneur.
    E - Enterprising: The first quality one must have is the readiness to undertake a project or business in which he/she believes in, even though it is untried or unpopular.N - Need to excel: Another characteristic of a successful Entrepreneur is a hunger for success or to be the best.A need to excel in their venture is a 'must - have' quality in a successful business man.
    T - Talented - It goes without saying that all successful businessmen are talented and creative people.It is one of the basic reason for their success.
    R - Risk Taking Ability - For an entrepreneur to be successful, the ability to take take calculated risks is very important.
    E - Economic- An entrepreneur's success also depends in his ability to be economical.'Spend less and get more' attitude helps in reducing the financial burden of the project.
    P - Perseverance - There are always 'ups' and 'downs' in running a business.But to overcome the difficulties and moving on despite the obstacles is a strong trait to have to be successful in business.
    R - Relationship Expert - Building and maintaining relationships helps an entrepreneur sustain his business even in most difficult of times.
    E - Energy - One must be healthy, energetic and fit to run a successful business.The fitness should not only be restricted to physical level but must also include mental strength.
    N - Noisy - This means one has to publicize one's work.Effective Marketing and Communication to the customers and clients is very important.And the best person to do this job is the entrepreneur himself.If he has the ability to communicate his vision to the client or the customer half the battle is won.
    E - Eye for details - Again a very important quality for a successful entrepreneur.Everybody knows that 'beauty lies in the details' and a person expert in this makes his customers happy.
    U - Untouched by Greed - Many a businesses have failed due to greed.Once one starts doing well and earning money they misuse the trust of the customers in order to earn more money.But if one is able to remain balanced and let not money control their emotions they have much brighter chances to earn money and good reputation.
    R - Religious - Religion is 'faith'.It does not necessarily mean to go to the church or temple or any other place of worship.One can have faith in anything.And one must keep that faith.An entrepreneur can only move forward in life & be successful if he keep the faith on, even during darkest of moments.
     
    The businessman to be successful in his business should have certain basic qualities. Businessmen also include office managers in sole trading firm and professional managers in case of company. An important authority has attributed certain traits of a successful businessman. These traits are:
    Physical and nervous energy
    Sense of purpose
    Integrity
    Friendliness
    Intelligence
    Enthusiasm
    Technical mastery
    Technical skill
    Decisiveness
    Faith
  • Besides the above traits, the most important qualities of a business are as follows:
    Initiative and capacity to take prompt decision: Now-a-days, things move very fast and as such the businessman should have the capacity to take initiative and prompt decision.
    Determination, courage and perseverance: He must have strong will power and determination. He must have courage and perseverance to face the initial and future problems of the business.
    Intelligence and alertness: The businessman should be alert to his surroundings and he must be aware of the possible changes otherwise he will fail in business. He should be intelligent enough to utilize business opportunities.
    Quality of leadership: He should have the quality of leadership because today's business require loyalty and co-operation of all employees.
    Morality and integrity: The businessman should be honest, straight-forward, fair in dealings, dependability, and moral character. If a businessman intends to make money in a dishonest manner, he cannot establish in business for a long period.
    Training and Education: The businessman should learn the intricacies of modern business through training and education. These are thus essential for a successful businessman.
    Besides the above qualities, the businessman should posses the qualities of tact, patience, foresight, frankness, common sense and charming.
    Characteristics you need to be successful as an entrepreneur
    The 12 letters of the word 'Entrepreneur' can best describe the characteristics of a successful entrepreneur.
    E - Enterprising: The first quality one must have is the readiness to undertake a project or business in which he/she believes in, even though it is untried or unpopular.N - Need to excel: Another characteristic of a successful Entrepreneur is a hunger for success or to be the best.A need to excel in their venture is a 'must - have' quality in a successful business man.
    T - Talented - It goes without saying that all successful businessmen are talented and creative people.It is one of the basic reason for their success.
    R - Risk Taking Ability - For an entrepreneur to be successful, the ability to take take calculated risks is very important.
    E - Economic- An entrepreneur's success also depends in his ability to be economical.'Spend less and get more' attitude helps in reducing the financial burden of the project.
    P - Perseverance - There are always 'ups' and 'downs' in running a business.But to overcome the difficulties and moving on despite the obstacles is a strong trait to have to be successful in business.
    R - Relationship Expert - Building and maintaining relationships helps an entrepreneur sustain his business even in most difficult of times.
    E - Energy - One must be healthy, energetic and fit to run a successful business.The fitness should not only be restricted to physical level but must also include mental strength.
    N - Noisy - This means one has to publicize one's work.Effective Marketing and Communication to the customers and clients is very important.And the best person to do this job is the entrepreneur himself.If he has the ability to communicate his vision to the client or the customer half the battle is won.
    E - Eye for details - Again a very important quality for a successful entrepreneur.Everybody knows that 'beauty lies in the details' and a person expert in this makes his customers happy.
    U - Untouched by Greed - Many a businesses have failed due to greed.Once one starts doing well and earning money they misuse the trust of the customers in order to earn more money.But if one is able to remain balanced and let not money control their emotions they have much brighter chances to earn money and good reputation.
    R - Religious - Religion is 'faith'.It does not necessarily mean to go to the church or temple or any other place of worship.One can have faith in anything.And one must keep that faith.An entrepreneur can only move forward in life & be successful if he keep the faith on, even during darkest of moments.
     
    The businessman to be successful in his business should have certain basic qualities. Businessmen also include office managers in sole trading firm and professional managers in case of company. An important authority has attributed certain traits of a successful businessman. These traits are:
    Physical and nervous energy
    Sense of purpose
    Integrity
    Friendliness
    Intelligence
    Enthusiasm
    Technical mastery
    Technical skill
    Decisiveness
    Faith
  • .     Business Ability
    For the success of any business it is essential that a businessman must possess the sounds knowledge of market, product, technological development, scientific .inventions, innovation, organization and business laws. It requires an ability to initiate, direct and control, and even more important, the capacity to win and hold the respect and loyalty of fellow workers. It permits the businessman to work efficiently for the prosperity of his business. This type of quality depends first on temperament and second on training.
    2.     Good Appearance
    This is a prominent quality required in a businessman. It help him much to win the opinion of the public. Good appearance is a rare quality and depends on a combination of many other qualities of head and heart. It is the capacity of attracting and influencing other people without conscious effort. A businessman with sound personality can easily win the confidence of his prospect and convince him about his point of view.
    3.     Spirit to Co-Operate
    This businessman shall be a good Co-operator, and so a good businessman. He must be able to compromise adjust, adapt, and be willing to admit that his judgment may on occasions be wrong. Besides he must be temperamentally fitted to exercise a divided authority.
    4.     Well Balanced
    A businessman must be a well balanced man of talent. He must have a consistent mind for clearness, steadiness and firmness in his dealings with others. He must never be prey to moods, by being of complacent temper today.
    5.     Sincerity and Honesty
    A businessman should be sincere and honest in his business activities. His own and the form's reputation depends on honesty. This honesty and sincerity which goes with it are attributes of the businessman at his best. Honesty with him is not only the best policy but also the best practice.
    6.     Enthusiasms
    The next quality without which no one should consider a profession as a I businessman, is enthusiasm for his activities, for an unsettled life, and for long hours and for the people who is going to meet. Then the knowledge of product, knowledge of the marketing conditions and knowledge of the prospect to enthusiasm and you have unbeatable combination.
    7.     Dependability
    The successful businessman should have the capacity of dependability. He should use every effort to hold it constant and dependable, so that those who work under it know what to expect as it remains unfluctuating from day today. It keep him much to win the heart of both customers and workers.
    8.     Courtesy
    Courtesy is to business what oil is to machinery. It costs nothing but wins a reputation. So businessman has to win the heart of everyone with his polite manners. Every one cannot know how may down is head before the polite and courteous businessman.
    9.     Alertness
    A businessman must be alert to the opportunities surrounding his business. He must keep in touch with the world, and not keep himself to himself. He should move about and see what is going on for he has to estimate new wants and new inventions for creating fresh demands.
    10.   Sociability
    Another notable quality of the businessman is ability to mix with anyone within a minute or two. He must get himself introduced to an unknown persons within a short time. Thus a businessman of sociable nature can easily win the confidence of many persons and much popularity among them.
    11.   Financial Ability
    Finance is an important factor for successful operation of the business. Without adequate finance no business can smoothly run. So a businessman must possess good financial position. The larger the amount of capital, the larger is the size of business and larger the volume of profit.
    What are the qualities of a good businessman?
     
    [Improve]
    Success in human activity depends on initiative and capacity to make decision. These changes take place frequently and if a businessman suffers from indecision he might miss business opportunities. The businessman should posse's qualities like will power and determination to succeed. He should take advice from every body but act according to his own decision. A businessman must be intelligent and alert. He must be alert to business opportunities. He must be aware of the changes taking place in the conditions of business.
     
     
    A businessman should possess the quality of leadership. The success of business depends upon loyalty and cooperation of employees. The cooperation of employees depends on enthusiasm and interest about the work they are doing. Another notable quality of the businessman is business morality, which means honest dealings. Honesty, straight forwardness fair dealings dependability and moral character are also important qualities for success in business. Today business has become so complex and competitive that it is full of danger to start a business without knowing its problems. It is through training and education that the businessman can properly understand the problems of his business and find solutions for them.
     
    Modern business is subject to fast changes. It requires a businessman to appreciate time. He must always think in terms of time. Businessman must have consistent mind so as to be able to exercise firmness in his dealing with others. A businessman has to deal with many persons everyday and to take important decisions. It is necessary that the businessman must use proper skill and tact to make best use of the business opportunities.
     
    Adaptation means to adjust oneself according to the circumstances. He must possess sharp memory. A businessman should be courteous. Natural aptitude inspires a person to work hard. Moral character helps a person to earn power and prestige in society. A businessman should be a cheerful. Good health of the businessman creates good impression about him.
     
    Must Have Qualities" for Business Success
     
     
    There are specific qualities that separate the seriously committed entrepreneurs who win BIG from the rest of the pack.
    The entrepreneurs who hang in there, pushing through to find the "best way" become massively successful in their financial endeavors.
     
    Below is a list I have complied as a result of studying the lives of successful entrepreneurs and business leaders, focusing on what sets them above the rest.
     
    The good news is that leaders are not born, they´re made. The list below is designed so you can quickly learn from the best leaders of our time, and model after their success.
     
     
     
    You may want to print out this list, and highlight the areas you want to work on. If you are taking the time to read this now, you are demonstrating an important quality that tells me you are ready for explosive success.
    When you are aware of your own strategy for success and have a plan you are dedicated to following, you will gain incredible momentum, making you unstoppable.
     
    Get ready to "kick it up a notch" and achieve the results reserved only for the true business leaders and achievers. Model these ten qualities giving 110%, put them into practice consistently and I can guarantee you will totally transform your life in the next six-months!
     
    1. Ambition and Drive. Giving you the energy you need to hurdle obstacles and tackle the seemingly impossible tasks. Unstoppable Determination bringing you through the rough times when all hope seems lost. Perseverance by holding onto the vision / mission / core values of your business / life. Giving you the energy to evaluate each situation in an objective manner, always pulling you in the right direction.
     
    2. Disciplined work ethic and high standards for quality. This includes traits such as honesty, integrity, and a concern for people. When you put your all into everything you do with an emphasis on quality, you will essentially be putting your personal seal of excellence on your products or services. In your pursuit of obtaining quality, focus on "Being Effective". This means you are doing the RIGHT things, and therefore focusing your energy in the right direction. 80% of your time should be focused on "running the business" instead of allowing the business to run you.
     
    3. Courage & Action-Orientation. When you are Optimistic enough to take risks that others are unwilling to take, this will set you up for huge returns. Be sure you evaluate all aspects of the situation and take educated risks, but take the risks! If it did not take courage, then everyone would be doing it. Courage is not a feeling. It is a decision. True courage is pushing forward, even though you may have experienced a setback or a "failure" the last time you tried something new / different. If you are not afraid of "failing" you will possess the ability to continually takes risks until one of them turns into your endless pot of gold.
     
    4. Self Confidence. Otherwise known as "The Right Attitude" in every aspect of your business and life. This is probably the one trait that is fundamental and critical for long term success. It allows you to adhere to the fulfillment of your goals every minute of the day because you are confident that you will obtain the results you seek.
     
    Evidence of a truly positive and self-confident person is seen in personal responsibility. Blaming is not in a self-confident person´s vocabulary. Positive people are proactive in everything they undertake. They don´t blame the economy, bad luck, a bad relationship, the weather, "unlucky" situations, the market or their employees. Proactive people figure out how they can personally change, instead of focusing their energy on where others should change.
     
    People with a positive outlook on life and business learn from every situation and experience, the good and the bad. They figure out ways to avoid poor results in the future and decide on ways to not repeat a negative situation.
     
    5. Servant Leadership. The ability to make decisions, regardless of popular opinion in accordance with your business vision, while inspiring those around you to follow through on the direction you set in motion. (Some call this "Delegation" I prefer to call it "Inspiration".
     
    Think about it. Do you like to be Delegated to, or Inspired?) The leaders who are able to make sound decisions at rapid speed are those who know what the "end result looks like". They have seen the finish line, and know the excitement of crossing it first. Servant leaders are those who come up beside their team members where ever they are, teach those people how they can cross the finish line and experience the same joy and excitement as if they had crossed the finish line themselves.
     
    6. A Creative mind. The ability to "think on one´s feet" is critical if you are committed to a high level of success. The ability to change when necessary. Controlled Flexibility is a key component to success. There must be structure and systems in place right from the start in order to create a self-sustaining operation and to ensure you are not simply "changing for change sake".
     
    Effective change is evidenced when you are regularly evaluating and adapting your business plan and goals to meet your vision / mission / core values that have been set from the beginning. (This success habit assumes there is a business plan in place, and that you are following what has been laid out in the plan.)
     
    7.A complete understanding of your gifts / strengths / talents and behavioral style. When you know yourself better than anyone else, you will be able to control the situations you allow yourself to be involved in. When you know others better than they know themselves, you will be able to take the right approach when working with them.
     
    This will give you the advantage, because you have accelerated your knowledge and now have the edge you need to succeed in all your business transactions. (If someone else knows you better than you know yourself, you will continually find yourself "in a mess" wondering how you got there.)
     
    8. The sincere desire to understand and help people, putting their needs above your own. When you find unique ways to help enough other people WIN, you will get what you need as a result. Discover ways to give other people what they are seeking in an entertaining style, and you will set yourself apart from your competition.
     
    Positive relationships in all areas of your life will accelerate your business success. In this day and age, "soft skills" are more important than technical skills, especially for business owners. (If you get it right in the small areas of your life, you´ll get it right on a larger scale as well. The results you experience in your personal life will be multiplied in your business life, whether positive or negative.)
     
    9. Kick it up a Notch! Gain and maintain a positively high level of belief for everything that is possible. Set lofty goals and expand your personal vision for what it possible. The leaders who set and evaluate their goals regularly are the ones who achieve more tan 92% of the population combined!
     
    Once a goal is obtained, high achievers raise the bar incrementally again and again. They are not afraid of failure because failure for the common person is just a learning experience for an achiever. Achievers continually set goals despite the uncertainty of whether it looks at the time like they can accomplish the goal or not.
     
    10. Giving Back. The companies who give a minimum of 10% to worthwhile charities or causes, and contribute to their community will be the ones who experience an over abundance of blessings in their business - often from unexpected sources. This is a fundamental law of finance that has been proven time after time. These are the people who attract clients to them instead of always "marketing to clients" trying to chase clients down
     
    Becoming an entrepreneur is not an easy task! There are certain qualities that are absolutely necessary if you would like to become successful in your business ventures. Some of these qualities are built-in parts of your inherent personality, and some of them get developed over time. Knowing these characteristics and identifying your weak ones - those, which need strengthening - will, eventually, help you become a successful entrepreneur.
    1. Common Sense
    Studies show that most successful businessmen consider common sense as the foundation of their success. Common sense is defined as an ability to make sound judgments on the issues, which you encounter in everyday situations.
    Good judgment depends on acquired knowledge and past experience. The combination of these two creates necessary prerequisites in developing common sense in a person. Common sense allows you to understand complex issues in simpler terms and get into the core of a problem.
    2. Specialized Knowledge of your field
    It is easier to start a successful business, if you have deep knowledge of the business field that you decide to pursue. About half of all home-based start-ups are launched by people who decide to use the knowledge, which they gained from their previous work experience of a particular niche area.
    Philip Green, a billionaire, who made his fortune in garments retailing, claims that corner stone of his success is his knowledge of rag trade. He, presumably, can price a fabric simply by rubbing it between his fingers. Just by looking at a rack of coats he can predict which ones won't sell next season. That's the kind of knowledge required in order to become successful in entrepreneurship.
    Around 45 percent of all start-ups fail to survive more than two years. One of the main reasons is many entrepreneurs do not accumulate needed industry knowledge before jumping into business world.
    3. Self-confidence
    Self confidence is a key entrepreneurial skill for success. It is easy to become demoralized, frustrated and resentful if you lack self-confidence.
    Self-confidence is concerned with how a person feels about his ability. A successful entrepreneur believes in his abilities. He is not scared to explore un-chartered territories, take risk and take difficult decisions.
    Self-confidence, however, is not a personal trait that either you have or you don't. A person can have high self-confidence in one situation and totally lack in another. This is one of those skills that can be developed by training.
    4. Ability to get things done
    Successful entrepreneurs are persistent and hardworking. They master self-discipline to such extent that if a work is important and related to their goals, they will, eventually, complete it.
    Getting things done is the vital link between motivations and their outcome. At times, entrepreneurs force themselves to choose work over fun, a boring job against a pleasant one, working on tax papers rather than reading a glamour magazine. This requires a self-control that many people simply fail to develop in them.
    5. Creativity
    Creativity is the ability to use your insights and come up with new solutions to old problems, get things done in a different way or find a totally different approach for conventional things to work together. Entrepreneurs need creative thinking ability virtually in everything. Each new product, each new marketing method, each business decision - all these are fertile ground for creative thinking.
    Often, entrepreneurs become immensely successful thanks to one single creative idea!
    6. Ability to lead
    Successful entrepreneurs are capable of leading people and get work done by them. They use a combination of various methods - effective motivation, planning, coaching and evaluation - to lead people. They are concerned about the wellbeing of others and easily get along with people.
    7. Self reliance
    Successful entrepreneurs try to take full responsibility for their actions. They know that what they are today, and what they are going to be tomorrow, depend solely on themselves, as it is the outcome of their own choices and decisions. They are proactive people, who set goals, walk an extra mile to achieve them and rely, primarily, on their own resources and abilities.
    If you would like to check out if your personality fits the typical entrepreneurial profile, the following site has questionnaire that will help you asses your entrepreneurial skills:
    [http://www.rateyourself.com/subject.cfm/Subject_ID/2]
     
     
  • There are many types of business ,and as a result ,business can be classified in many ways .One oof the most common classification is based on profit generating activities of business
    Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business.There are many types of businesses, and because of this, businesses are classified in many ways. One of the most common focuses on the primary profit-generating activities of a business:
    There are many other divisions and subdivisions of businesses. The authoritative list of business types for North America is generally considered to be the North American Industry Classification System, or NAICS. The equivalent European Union list is the NACE.
     
  • Ratan Tata , tata ,Aditya Birla
    Sole propiership is a business owned by one person and general partnership is a business owned by two or more people, and a corporation is owned by lots of people who have stocks with the company
    Proprietorship is a company made up of one person. Examples would be a housekeeper, a plumber or dog groomer. Their personal finances and the finances of the business can both be attached in the event of a law suit. A partnership would be two or more individuals who decide to share the risk and rewards of the business. Partners may run a restaurant, and accounting firm, or a beauty salon. Corporations are like individuals in the eyes of the law. They are a legal entity separate from the people who operate it. For example, the plumber who was a sole proprietor may choose to incorporate his business - making his business a separate entity from him. He is a paid employee of the corporation. Corporations have all the same rights as an individual in the eyes of the law. If the corporation fails, it is the corporate assets that are lost, not the assets of the employees - even the individuals who may have created the corporation.
    A cooperative is a business or a firm. It belongs to the people / employees - they are therefore owners - and they therfore have an invested stake in the business. Members invest in shares in the business to provide working capital. All profits are set aside for operations and improvements, are returned to co-op members
    Cooperatives can take many forms. For example, a group of single parents may decide to band together to provide a child-care facility so they will have reliable day care for their children. Each parent contributes a certain amount of money and/or time, and in exchange they all have a safe place to leave their children. A credit union is also a type of cooperative. The purpose of a credit union is not to make a profit for itself, but to help each member be more financially secure. By creating their own financial institution, members can receive a higher interest rate on the money they have placed in savings and receive a lower interest rate on loans. Retailers have also started establishing co-ops. Ace Hardware, for example, is a co-op of independent hardware store owners. By banding together, the hardware owners can share advertising costs and receive discounts for bulk ordering of materials and supplies. Sharing costs and discounts allows small hardware stores to compete with large chain hardware stores.
    Cooperative Business is an association of people who are united voluntarily to meet common social, cultural and economic needs. This is done by a jointly owned enterprise.There are many advantages of Cooperative business such as:- It serves the interest of the members rather than the capital invested. - It promotes self help, self responsibility and self organization.- It is considered as a more stable form of business.- This kind of business is more responsible to the customers.- This kind of organization gives more job satisfaction and variety
    The biggest difference between these three is the level of individual financial risk involved.
  • The efficient and effective operation of a business, and study of this subject, is called management.
    Management is sometimes listed as a ‘department ‘but typically refers to the top level of leadership within the business regardless of their functional role 
    The major factors affecting how a business Is organized are usually
    The size & scope of the business more flexible, while larger business ,or those with wider ownership or more functional structures, will usually tend to be organized as partnership or( more commonly) corporations .In addition ,a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so
    Management
    The efficient and effective operation of a business, and study of this subject, is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, operation management, service management and information technology management.
     
    [edit] Reforming State Enterprises
    In recent decades, assets and enterprises that were run by various states have been modeled after business enterprises. In 2003, the People's Republic of China reformed 80% of its state-owned enterprises and modeled them on a company-type management system.[2] Many state institutions and enterprises in China and Russia have been transformed into joint-stock companies, with part of their shares being listed on public stock markets.
     
    [edit] Government regulation
    This section may require cleanup to meet Wikipedia's quality standards. Please improve this section if you can. (August 2007)
    The examples and perspective in this section may not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (May 2009)
     
    Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.
     
    [edit] Organizing
    The major factors affecting how a business is organized are usually:
     
    The Bank of England in Threadneedle Street, London, England.The size and scope of the business, and its anticipated management and ownership. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as partnerships or (more commonly) corporations. In addition a business that wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
    The sector and country. Private profit making businesses are different from government owned bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.
    Limited liability. Corporations, limited liability partnerships, and other specific types of business organizations protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
    Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
    Disclosure and compliance requirements. Different business structures may be required to make more or less information public (or reported to relevant authorities), and may be bound to comply with different rules and regulations.
    [edit] Capital
    Mexican Stock Exchange in Paseo de la Reforma, Mexico CityWhen businesses need to raise money (called 'capital'), more laws come into play. A highly complex set of laws and regulations govern the offer and sale of investment securities (the means of raising money) in most Western countries. These regulations can require disclosure of a lot of specific financial and other information about the business and give buyers certain remedies. Because "securities" is a very broad term, most investment transactions will be potentially subject to these laws, unless a special exemption is available.
     
    Capital may be raised through private means, by public offer (IPO) on a stock exchange, or in many other ways. Major stock exchanges include the Shanghai Stock Exchange, Singapore Exchange, Hong Kong Stock Exchange, New York Stock Exchange and Nasdaq (USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and so on. Most countries with capital markets have at least one.
     
    Business that have gone "public" are subject to extremely detailed and complicated regulation about their internal governance (such as how executive officers' compensation is determined) and when and how information is disclosed to the public and their shareholders. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other Western nations have comparable regulatory bodies. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC), in China. In Singapore, the regulation authority is Monetary Authority of Singapore (MAS), and in Hong Kong, it is Securities and Futures Commission (SFC).
     
    As noted at the beginning, it is impossible to enumerate all of the types of laws and regulations that impact on business today. In fact, these laws have become so numerous and complex, that no business lawyer can learn them all, forcing increasing specialization among corporate attorneys. It is not unheard of for teams of 5 to 10 attorneys to be required to handle certain kinds of corporate transactions, due to the sprawling nature of modern regulation. Commercial law spans general corporate law, employment and labor law, healthcare law, securities law, M&A law (who specialize in acquisitions), tax law, ERISA law (ERISA in the United States governs employee benefit plans), food and drug regulatory law, intellectual property law (specializing in copyrights, patents, trademarks and such), telecommunications law, and more.
     
    In Thailand, for example, it is necessary to register a particular amount of capital for each employee, and pay a fee to the government for the amount of capital registered. There is no legal requirement to prove that this capital actually exists, the only requirement is to pay the fee. Overall, processes like this are detrimental to the development and GDP of a country, but often exist in "feudal" developing countries.
     
    [edit] Intellectual property
     
     
    Businesses often have important "intellectual property" that needs protection from competitors for the company to stay profitable. This could require patents or copyrights or preservation of trade secrets. Most businesses have names, logos and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law. Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors. Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties.
     
    [edit] Exit plans
    Businesses can be bought and sold. Business owners often refer to their plan of disposing of the business as an "exit plan." Common exit plans include IPOs, MBOs and mergers with other businesses. Businesses are rarely liquidated, as it is often very unprofitable to do so.
     

Transcript

  • 1. Business Organization & systems BBA –1 Supreet Wahee Copyright © 2004 Pearson Education, Inc. Slide 6-1
  • 2. What is today about ?  Getting around ( Self Introduction Exercise) Name School Career Aspirations  An adjective that describes you starting from the first alphabet of your name  Ground rules Copyright © 2004 Pearson Education, Inc. Slide 6-2
  • 3. Ground Rules
  • 4. Ground Rules Enjoy Learning
  • 5. Unit 1 Nature of Business Copyright © 2004 Pearson Education, Inc. Slide 6-5
  • 6. Learning Objectives • • • • • • • • • • Introduction Economic & Non-economic Activities Concept of Business Comparison between Business ,Profession ,Employment Nature & characteristics of Business Scope of Business Objectives of a Business System Structure of Business Requisites of success in Modern Business Qualities of successful businessman
  • 7. Overview Business Copyright © 2004 Pearson Education, Inc. Slide 6-7
  • 8. Human Activities and Business All human activities are broadly divided into two categories: (i) economic activities (ii) non-economic activities. The work of a farmer, manufacturer, teacher, doctor, trader etc. are some examples of economic activities. They are primarily concerned with the production, distribution and consumption of goods and services Economic activities are undertaken to earn one’s living and for the production of wealth. Besides economic activities, people also undertake a number of activities for mental satisfaction. They engage in charitable work, practice religion, undertake recreational activities and also do many things out of love for others or out of patriotic feelings. These activities are known as non-economic activities. these activities are undertaken not for any material reward or gain but for one’s happiness, pleasure or satisfaction which can not be measured in terms of money.
  • 9. Distinction between economic and non-economic activities Economic Non-economic Economic activities are motivated by economic gain Non-economic activities are motivated by a desire to achieve mental satisfaction or happiness. Monetary gain is expected from economic activities There is no such satisfaction from non-economic activities Economic activities lead to creation of wealth. Non-economic activities lead to personal satisfaction.
  • 10. What is Business? • • • • • Wheeler –”An institution organized and operated to provide goods & services to the society under the incentive of private gain” L.H Haney “Business may be defined as human activities directed towards providing or acquiring wealth through buying and selling good” Economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth. Every business requires some form of investment and a sufficient number of customers to whom its output can be sold at profit on a consistent basis. A commercial activity engaged in as means of live hood or profit or an entity which engages in such activities
  • 11. Understanding The Business System Old concept of Business:  The exclusive objective of business in those was maximization of profit at any cost  Business begin merely as an as an institution for the purpose of making money  As long as one made money and kept himself out of jail he was considered as successful  He felt no particular obligation and acknowledged no responsibility to the community  He being the owner of business thought he had perfect right to do what he pleased
  • 12. New concept of Business:  The modern business enterprise is social & economic institution .It does not exist in a vacuum .  Business by itself is not an end but a means to achieve an end ,a means to achieve public welfare  Profit alone is no longer the main objective of business now .  The objective of business is to create customer .The customer is the master and to serve him well is the only purpose of business  Business cannot survive without customers  Modern business aims at profit through business
  • 13. Types of Economic Activities When a person is regularly engaged in a particular economic activity, it is known as his or her occupation or vocation. Occupations may be classified into three categories — (i) Business, (ii) Profession and (iii) Employment (Service).
  • 14. Concept of Profession & employment  Profession: A profession may be defined as an occupation which involves the rendering of personal services of a specialized nature ,based on professional knowledge ,education and training such as services rendered by physicians ,lawyers ,auditors etc .  Employment Service or employment involve working under a contract of employment for or under someone known as the employer in return for wages or salary .
  • 15. Comparison Between Business, Profession ,Employment
  • 16. Nature or characteristics of Business 1. Sale ,Transfer or Exchange for satisfaction of Human Needs 2. Dealings in Goods & services 3. Continuity in Dealings 4. Profit Motive 5. Risk or Uncertainty 6. Creation of Utilities 7. Economic Activity
  • 17. The nature business is best understood on the basis of its characteristics Natureofof Business or features which are as follows: 1. Business is an economic activity 2. It includes the activities of production or purchase and distribution. 3. It deals in goods and services. 4. It implies regularity of transactions. 5. It aims at earning profits through the satisfaction of human wants. 6. It involves risk; it is not certain that adequate profit will be earned. 7. It creates utilities. 8. It serves a social purpose by improving people’s standard of living.
  • 18. Objectives of Business - Meaning Business objectives are something which a business organization wants to achieve or accomplish over a specified period of time. These may be to earn profit for its growth and development, to provide quality goods to its customers, to protect the environment etc. These are the objectives of business. Classification of Objectives of Business
  • 19. Classification of Objectives of Business
  • 20. Economic Objectives Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objective, which include, creation of customers, regular innovations and best possible use of available resources. i. Profit earning  Profit is the lifeblood of business, without which no business can survive in a competitive market .Infact profit making is the primary objective for which a business unit is brought into existence.  Profits must be earned to ensure the survival of business, its growth and expansion over time.  Profits help businessmen not only to earn their living but also to expand their business activities by reinvesting a part of the profits.  In order to achieve this primary objective, certain other objectives are also necessary to be pursued by business, which are as follows:
  • 21. a) Creation of customers  A business unit cannot survive unless there are customers to buy the products and services.  Again a businessman can earn profits only when he/she provides quality goods and services at a reasonable price. For this it needs to attract more customers for its existing as well as new products. This is achieved with the help of various marketing activities. b) Regular innovations  Innovation means changes, which bring about improvement in products, process of production and distribution of goods.  Business units, through innovation, are able to reduce cost by adopting better methods of production and also increase their sales by attracting more customers  because of improved products. Reduction in cost and increase in sales gives more profit to the businessman. Use of power-looms in place of handlooms, use of tractors in place of hand implements in farms etc. are all the results of innovation.
  • 22. c) Best possible use of resources  As you know, to run any business you must have sufficient capital or funds. The amount of capital may be used to buy machinery, raw materials, employ men and have cash to meet day-to-day expenses.  Thus, business activities require various resources like men, materials, money and machines.  The availability of these resources is usually limited. Thus, every business should try to make the best possible use of these resources.  This objective can be achieved by employing efficient workers, making full use of machines and minimizing wastage of raw materials.
  • 23. Quick check Given below are some statements relating to the economic objectives of business. Some statements are true and some are false. Identify the true statements: i Creation of demand for goods is the primary objective of business. ii. Profits are expected to be earned by businessmen in proportion to the amount of capital invested in business. iii. It is not always necessary for businessmen to make the best possible use of materials. iv. Businessmen should use profits earned from the business only for their own living. v. Generation of employment is the primary economic objective of business .
  • 24. Social Objectives  Social objectives are those objectives of business, which are desired to be achieved for the benefit of the society.  Since business operates in a society by utilizing its scarce resources, the society expects something in return for its welfare. No activity of the business should be aimed at giving any kind of trouble to the society. If business activities lead to socially harmful effects, there is bound to be public reaction against the business sooner or later.  Social objectives of business include production and supply of quality goods and services, adoption of fair trade practices and contribution to the general welfare of society and provision of welfare amenities.
  • 25. i. Production and supply of quality goods and services  Since the business utilizes the various resources of the society, the society expects to get quality goods and services from the business.  The objective of business should be to produce better quality goods and supply them at the right time and at a right price. It is not desirable on the part of the businessman to supply adulterated or inferior goods which cause injuries to the customers.  They should charge the price according to the quality of the goods and services provided to the society.  Again, the customers also expect timely supply of all their requirements. So it is important for every business to supply those goods and services on a regular basis.
  • 26. ii. Adoption of fair trade practices  In every society, activities such as black-marketing and over-charging are considered undesirable.  Besides, misleading advertisements often give a false impression about the quality of products. Such advertisements deceive the customers and the businessmen use them for the sake of making large profits. This is an unfair trade practice.  The business unit must not create artificial scarcity of essential goods or raise prices for the sake of earning more profits.  All these activities earn a bad name and sometimes make the businessmen liable for penalty and even imprisonment under the law.  Therefore, the objective of business should be to adopt fair trade practices for the welfare of the consumers as well as the society.
  • 27. iii. Contribution to the general welfare of the society  Business units should work for the general welfare and upliftment of the society. This is possible through running of schools and colleges for better education, opening of vocational training centers to train the people to earn their livelihood, establishing hospitals for medical facilities and providing recreational facilities for the general public like parks, sports complexes etc.
  • 28. Quick Check Which of the following statements relating to social objectives of business are right and which are wrong? i) Social objective of business is based on the assumption that what is good for business is also good for society. ii) Production and supply of quality goods to the consumer is the social objective of business. iii) Creation of demand for the product is a social objective of business. iv) Establishment of sports complex for the public is the economic objective of business. v) Hoarding and black-marketing are considered desirable on the part of business.
  • 29. Human Objectives  Human objectives refer to the objectives aimed at the well-being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped and deprived of proper education and training.  The human objectives of business may thus include economic well-being of the employees, social and psychological satisfaction of employees and development of human resources. i. Economic well being of the employees  In business employees must be provided with fair remuneration and incentives for performance, benefits of provident fund, pension and other amenities like medical facilities, housing facilities etc. By this they feel more satisfied at work and contribute more for the business.
  • 30. ii. Social and psychological satisfaction of employees  It is the duty of business units to provide social and psychological satisfaction to their employees.  This is possible by making the job interesting and challenging, putting the right person in the right job and reducing the monotony of work.  Opportunities for promotion and advancement in career should also be provided to the employees.  Further, grievances of employees should be given prompt attention and their suggestions should be considered seriously when decisions are made.  If employees are happy and satisfied they can put their best efforts in work.
  • 31. iii. Development of human resources  Employees as human beings always want to grow. Their growth requires proper training as well as development.  Business can prosper if the people employed can improve their skills and develop their abilities and competencies in course of time.  Thus, it is important that business should arrange training and development programmes for its Employees.
  • 32. iv. Well being of socially and economically backward people  Business units being inseparable parts of society should help backward classes and also people those are physically and mentally challenged. This can be done in many ways  . For instance, vocational training programme may be arranged to improve the earning capacity of backward people in the community.  While recruiting it staff, business should give preference to physically and mentally challenged persons.  Business units can also help and encourage meritorious students by awarding scholarships for higher studies
  • 33. Quick Check Below are given some statements regarding human objectives of business. State which of them are “true” and which are “false”: i. Businessmen should pay proper remuneration which will motivate the workers for work. ii. Business units should provide social and psychological satisfaction to the employees. iii. Businessmen should not help disabled persons unless they are employed in business. iv. Business units should ignore the suggestions given by the employees while taking important decisions. v. Helping physically handicapped persons in the society is an economic objective of Business.
  • 34. National Objectives  Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations.  The goal of the country may be to provide employment opportunity to its citizen, earn revenue for its exchange, become self-sufficient in production of goods and services, promote social justice, etc.  Business activities should be conducted keeping these goals of the country in mind, which may be called national objectives of business. The following are the national objectives of business. i. Creation of employment  One of the important national objectives of business is to create opportunities for gainful employment of people.  This can be achieved by establishing new business units, expanding markets, widening distribution channels, etc.
  • 35. ii. Promotion of social justice  As a responsible citizen, a businessman is expected to provide equal opportunities to all persons with whom he/she deals.  He/She is also expected to provide equal opportunities to all the employees to work and progress.  Towards this objective special attention must be paid to weaker and backward sections of the society. iii. Production according to national priority  Business units should produce and supply goods in accordance with the priorities laid down in the plans and policies of the Government.  One of the national objectives of business in our country should be to increase the production and supply of essential goods at reasonable prices.
  • 36. iv. Contribute to the revenue of the country  The business owners should pay their taxes and dues honestly and regularly.  This will increase the revenue of the government, which can be used for the development of the nation. v. Self-sufficiency and Export Promotion  To help the country to become self-reliant, business units have the added responsibility of restricting import of goods. Besides, every business units should aim at increasing exports and adding to the foreign exchange reserves of the country
  • 37. Quick Check Fill in the blanks with suitable word(s) from those given in brackets: (i) To produce and distribute essential goods at a reasonable price is a/an _____________ objective of business. (social, national, human) (ii) To help the country to become self-reliant business units should aim at increasing ________________. (export import, prices) (iii) Business units should pay taxes honestly and______________. (occasionally, frequently, regularly) (iv) Business should provide equal opportunities to all its ________________.(owners, employers, suppliers)
  • 38. Global Objectives  Earlier India had a very restricted business relationship with other nations. There was a very rigid policy for import and export of goods and services.  But, now-a-days due to liberal economic and export–import policy, restrictions on foreign investments have been largely abolished and duties on imported goods have been substantially reduced.This change has brought about increased competition in the market.  Today because of globalization the entire world has become a big market. Goods produced in one country are readily available in other countries. So, to face the competition in the global market every business has certain objectives in mind, which may be called the global objectives. Let us learn about them.
  • 39. i. Raise general standard of living  Growth of business activities across national borders makes available quality goods at reasonable prices all over the world.  The people of one country get to use similar types ofgoods that people in other countries are using.  This improves the standard of living of people. ii. Reduce disparities among nations  Business should help to reduce disparities among the rich and poor nations of the world by expanding its operation.  By way of capital investment in developing as well as underdeveloped countries it can foster their industrial and economic growth.
  • 40. iii. Make available globally competitive goods and services  Business should produce goods and services which are globally competitive and have huge demand in foreign markets.  This will improve the image of the exporting country and also earn more foreign exchange for the country.
  • 41. Quick check Match the following. (A) (B) i. Lower Interest rate a. Political factor ii. Demand for Packaged Food b. Technological factor iii. Strike in the factory c. Social factor iv. New Methods of Production d. Economic factor
  • 42. Requisites of Success in Modern Business & Qualities of a Successful Businessman Copyright © 2004 Pearson Education, Inc. Slide 6-42
  • 43. Ingredients of Good Business  Scan Pg 1.16 in modern business org and mngments.a sherlekar
  • 44. Requisites of Success in Modern Business          Clear –cut Objectives Efficient Business planning Proper Size Location ,and Layout Sound Organization ‘Financial Planning Marketing network Executive Development Dynamic Management Human Relations Research & Development
  • 45. Qualities of a Successful Businessman          Wide Knowledge Initiative Physical energy Foresight Business Morality Dependability & consistency Ability to cooperate Self-Confidence Aptitude for research & Analysis Winning Personality
  • 46. Besides the above traits, the most important qualities of a businessman are as follows: Initiative and capacity to take prompt decision: Now-a-days, things move very fast and as such the businessman should have the capacity to take initiative and prompt decision. Determination, courage and perseverance: He must have strong will power and determination. He must have courage and perseverance to face the initial and future problems of the business. Intelligence and alertness: The businessman should be alert to his surroundings and he must be aware of the possible changes otherwise he will fail in business. He should be intelligent enough to utilize business opportunities. Quality of leadership: He should have the quality of leadership because today's business require loyalty and co-operation of all employees. Morality and integrity: The businessman should be honest, straight-forward, fair in dealings, dependability, and moral character. If a businessman intends to make money in a dishonest manner, he cannot establish in business for a long period. Training and Education: The businessman should learn the intricacies of modern business through training and education. These are thus essential for a successful businessman. Besides the above qualities, the businessman should posses the qualities of tact, patience, foresight, frankness, common sense and charming.
  • 47. Qualities Of a successful business                   Independent Risk bearing Locus of Control , Preservance Positive self concept Analytical ability of mind Sense of Afficacy Openness to feedback & learning from Experience Confronting Uncertainty Interpersonal skills Need to influence others Stress takers Time Orientation Innovators Business communications skills Telescopic Faculty Leadership Business Planning
  • 48. Significance of Business in Modern Society Business is an integral part of modern society. It is an organized and systematized activity for profit. It is concerned with activities of people working towards a common goal. The modern society can not exist without business. The need and importance of business in society can be described as follows: 1. Improvement in standard of living: Business helps people in general to improve their standard of living. 2. Proper utilization of resources: It leads to effective utilization of the scarce resources of society. It provides facility of mass production.
  • 49. 3. Better quality and large variety of goods and services: It involves production, purchase and sale of goods and services for price. Customer’ satisfaction is the backbone of modern business. Services such as supply of water, electricity etc. may be considered highly significant for the community. 4. Creates utilities: Business makes goods more useful to satisfy human wants. It adds to products the utilities of person, time, place, form, knowledge etc. Thus, people are able to satisfy their wants effectively and economically. 5. Employment opportunities: It provides employment opportunities to large number of people in society. 6. Workers' welfare Business organisations these days take care of various welfare activities for workers. They provide safer and healthier work environment for employees.
  • 50. Structure of Business Copyright © 2004 Pearson Education, Inc. Slide 6-50
  • 51. Business Departments Accounting Accounting departments examine and analyze money within the company. ● Management Accounting – Provides accounts for management ● Financial Accounting – Provides accounts for external reports Human Resources (Personnel) Human resources hires, fires, administrates, motivates and provides services for employees ● Payroll – Provides salaries for staff ● Recruitment – Recruits new staff ● Training – Trains staff ● Talent Management – In some companies there will be a special department to manage the needs of specialist personnel. e.g. Actors, singers or engineers with specialist skills.
  • 52. Marketing and Sales Marketing and sales deal with customers and sell the company's products. ● Sales – Sell the company's products ● New Business – Gets in new customers ● Account Management – Manages existing customers ● Telesales – Sells via the telephone ● Customer service – Provides service after the customer has bought a product ● Strategic Marketing – Plans future marketing Market Research – Analyses customers wants and needs ● Advertising – Manages advertising and promotions ● Corporate Communications – Provides information to shareholders, customers, employees and other stakeholders ● Public Relations – Deals with the press Operations Operations will depend on the type of company. It could be: Production, manufacturing, assembly, design or retail.
  • 53. Procurement ● Strategic Sourcing – Plans materials and suppliers requirements ● Purchasing – Purchases supplies on a day to day basis Research and Development Develop new products Information Technology ● IT Support – Looks after computers and solves employees' IT problems ● Strategic Information Systems – Plans new technology ● Data Entry – Enters in information Administration Deals with paperwork within a company. Logistics Deal with transporting resources. Can be supplies, products and internal transfers.
  • 54. Which Department? Which department would deal with the following: 1. There is something wrong with the accounts computer 2. Management need the latest sales figures 3. There is lead in the toys we manufacture and a reporter is asking questions 4. We need a better phone to compete with Apple's iPhone 5. We need to improve the quality of our Radio adverts 6. We need to ensure that our key design team do not find jobs with our competitors 7. We need to hire more people 8. We need to do the annual accounts 9. We need to find a way to increase sales by 20% over the next three years. 10. We need to find out why customers are not buying our orange paint.
  • 55. Forms of business organization Although forms of business ownership vary by jurisdiction, there are several common forms: Sole proprietorship: A sole proprietorship is a business owned by one person. The owner may operate on his or her own or may employ others. The owner of the business has personal liability of the debts incurred by the business. Partnership: is a form of business in which two or more people operate for the common goal which is often making profit. In most forms of partnerships, each partner has personal liability of the debts incurred by the business. There are three typical classifications of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
  • 56. Corporation: is either a [limited liability ] or unlimited liability entity that has a separate [legal personality] from its members. A corporation can be organized for-profit or notfor-profit. A corporation is owned by multiple shareholders and is overseen by a board of directors, which hires the business's managerial staff. In addition to privately owned corporate models, there are state-owned corporate models. Cooperative: Often referred to as a "co-op", a cooperative is a limited liability entity that can organize for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, as opposed to shareholders, who share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy. For a country-by-country listing of legally recognized business forms, see Types of business entity.
  • 57. Scope of Business Organization / Classification of Business Activities Copyright © 2004 Pearson Education, Inc. Slide 6-57
  • 58. Scope Of Business
  • 59. Classification of Business Activities    Industry :is that branch which is concerned with the production of good & services . the term industry is used to refer to useful things are extracted from environment and transformed ,processed ,fabricated and multiplied into other products Commerce :is concerned with the exchange of goods & services with all that is involved buying & selling of goods at any stage in their progress from raw materials to finished good on consumer hands
  • 60.  • • • • Primary Industries :Primary businesses and industries are those which extract (i.e. mine, farm, fish or drill) things normally provided by nature, e.g. ~ fish from the sea; ~ metal from the earth; ~ food from the land. They produce raw materials in the form of oil, iron, coal or limestone, which are used to make other products. Also, they may also produce final products such as fish or fruit. Extractive Industry :These industries extract or draw out products from natural sources such as earth ,soil ,water ,air etc Examples: Farming ,mining ,Hunting ,fishing etc Genetic Industry :means parentage or hereditary .Genetic Industries are engaged in multiplying or reproduction of certain species of plants & animals Example: Cattle breeding farms, poultry farms ,fish farms ,hatcheries & commercial kernels
  • 61. • • • • Secondary Industries :Secondary businesses and industries are those involved in manufacturing products. That is, they turn the raw materials produced by the primary industries into things that can be sold and used. e.g. ~ metal into cars ~ wood into furniture ~ wheat into bread Manufacturing Industries :these industries are concerned with conversion of raw material & semi finished products into finished products .They create form Utility Analytical :The Basic material is analyzed & separated into a number of products .Oil refinery-crude oil is extracted from beneath the earth and is processed into petrol ,diesel ,kerosene ,gasoline ,lubricating oil etc . Syntactical: Two or more products mixed together in the manufacturing operations to obtain some new products :example Soap ,cement ,paints ,fertilizers ,cosmetics etc
  • 62. • • • • Processing: Raw ,materials are processed through a series of manufacturing operations .examples-textile sugar ,steel Assembling :various components or parts are brought together to produce finished products Manufacture of Radio ,bicycle TV . Watches automobiles etc Construction Industries :They are concerned with making of Buildings ,bridges ,dams ,roads ,canal etc
  • 63. National & International Business International business National Business International business carries out its business activities across the boundaries of the nation National Business carried out within the boundaries of the nation International Business faces more problems and National Business faces comparatively less problems in these complexities in terms polices ,legal and Financial Systems aspects . Other Challenges in this are the cross cultural & different Market Structures It is not in this case it is carried out in an unusual conditions like political differences of the countries ,legal aspects that impose certain conditions ,rules and regulations on the conducting of international business the domestic business activities are free from these restrictions, as they are carried out in the same infrastructure environment and within the same rules & regulations Formulation of strategies by the organizations performing Formulation of strategies by the organizations performing international business is not an easy task domestic business is not as difficult . IB is prone to various risks like -Political ,Exchange rate risk this is free from all these risks Due too various reasons & decisions IB is very complex This is not as complex
  • 64. What is a Business System A system is an organized or complex whole ,a combination of things or parts forming a complex or unitary whole . A system is an established arrangement of components which lead to the attainment of particular objectives according to the plan. A business enterprise is a system consisting of various sub-systems which operate in a balanced ,coordinated and integrated manner to make the whole as a business system The business system is a subsystem of the national economic system. Its is a combination of all resources ,institutions and organizations ,engaged ,directly or indirectly in production & distribution of goods & services desired by consumers The system includes all sectors viz private ,public ,joint ,cooperative sectors . Thus the business system has two parts :operating Structure & Environmental factors in which the structure operates . The operating structure is the entire group of business organization & enterprises Environmental Factors are economic ,human ,social, political ,technological factors
  • 65.  A business system is an organized or complex or whole, combination of things or parts forming a complex or unitary whole. A business system is an established arrangement of components which leads to the attainment of particular objective according to plan.
  • 66. On this basis of a business system may be presented as follows:  Inputs: consists of human and non-human resources like money, material, equipment and information.  Processing: Consists of production, finance, personnel, marketing, processing of information and  Output: Consists of goods and services, compensation to owners and employees, meeting societies expenditure  Feed back: Consists of (i) If result not acceptable adjust resources - like better machinery and better management.  Above all parts or components must be closely coordinated and properly integrated, so that the entire system is a unified whole and it can accomplish common objectives as per plan.
  • 67. Characteristics Of business system  Goal Orientation-directed towards achievement of specific objectives  Creativity-converts resources into useful products  Complexity-consists of innumerable elements and entities  Interdependence-various components are highly interacting and interdependent  Diversity-there is diversity in the range of output ,size ,ownership, location ,organization, management  Dynamism-the structure & operations of business system are continuously changing due to changes in its environment  Part of Socio-economic system-Business environment consist of all those economic ,social, political, legal ,technological and other forces which influence the functioning of business.  Control Mechanism-Control mechanism helps to coordinate the organizational activities and to respond to environmental opportunities and constraints
  • 68. THE END
  • 69. Business as a System    If we look at a business as a system ,it may be regarded as entity functioning in the social ,Economic ,political & cultural environment of a country or even world The structure of business system consists of subsystems of industry & commerce .These sub systems are made up of various forms of enterprise which are engaged in the production and supply of goods and services to the community. Each firm or enterprise is itself a system compromising sub-systems like production ,marketing ,financing ,personnel etc .
  • 70.  Each of these functions or systems has its own sub systems .The behavior of the business system as a whole depends on the functioning of and interrelationship among these sub systems .However these sub systems are the direct parts of the business system and these constitute the structure of business .The structure of business being a sub-system of the society is tied up with the environment in which it has to function
  • 71. Objectives Of business system  To convert inputs to outputs through coordinated efforts of all subsystems within the business system  To formulate the aims and objectives of the business  To ensure the integrated development of business plans and programmes in all the areas of business  To provide a good basis for the logical and orderly analysis of business activities  To stress on both internal & external linkages of business activities  To ensure good framework for managerial control  To use right information for decision making  To adapt to ever changing environment  To create opportunities for innovation  To provide for effective measurement and control
  • 72. Organizing a business The major factors affecting how a business Is organized are usually The size & scope of the business , and its anticipated management & ownership. Generally a smaller business is more flexible ,while larger business ,or those with wider ownership or more functional structures, will usually tend to be organized as partnership or( more commonly) corporations .In addition ,a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so The sector and country. Private profit making businesses are different from government owned bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.
  • 73. Limited liability. Corporations, limited liability partnerships, and other specific types of business organizations protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected. Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason. Disclosure and compliance requirements. Different business structures may be required to make more or less information public (or reported to relevant authorities), and may be bound to comply with different rules and regulations.
  • 74. What is a Business System A system is a set of parts ,elements or components which are interrelated and which interact with one another and make up the whole. these elements work together on the inputs as to accomplish common objectives ,that is the objective of the entire system In simplest form , *An environment *An Input *A processing Unit *Feedback *An output A business organization can be regarded as an open adhesive system with its environment acting as a supra –system.
  • 75. A Quick Check Copyright © 2004 Pearson Education, Inc. Slide 6-80
  • 76. Qualities Of a successful business Business Ability For the success of any business it is essential that a businessman must possess the sounds knowledge of market, product, technological development, scientific .inventions, innovation, organization and business laws. It requires an ability to initiate, direct and control, and even more important, the capacity to win and hold the respect and loyalty of fellow workers. It permits the businessman to work efficiently for the prosperity of his business. This type of quality depends first on temperament and second on training. Financial Ability Finance is an important factor for successful operation of the business. Without adequate finance no business can smoothly run. So a businessman must possess good financial position. The larger the amount of capital, the larger is the size of business and larger the volume
  • 77. Qualities Of a successful businessman . Good Appearance This is a prominent quality required in a businessman. It help him much to win the opinion of the public. Good appearance is a rare quality and depends on a combination of many other qualities of head and heart. It is the capacity of attracting and influencing other people without conscious effort. A businessman with sound personality can easily win the confidence of his prospect and convince him about his point of view. of profit.
  • 78. Spirit to Co-Operate This businessman shall be a good Co-operator, and so a good businessman. He must be able to compromise adjust, adapt, and be willing to admit that his judgment may on occasions be wrong. Besides he must be temperamentally fitted to exercise a divided authority. Well Balanced A businessman must be a well balanced man of talent. He must have a consistent mind for clearness, steadiness and firmness in his dealings with others. He must never be prey to moods, by being of complacent temper today. Sincerity and Honesty A businessman should be sincere and honest in his business activities. His own and the form's reputation depends on honesty. This honesty and sincerity which goes with it are attributes of the businessman at his best. Honesty with him is not only the best policy but also the best practice. Enthusiasms The next quality without which no one should consider a profession as a I businessman, is enthusiasm for his activities, for an unsettled life, and for long hours and for the people who is going to meet. Then the knowledge of product, knowledge of the marketing conditions and knowledge of the prospect to enthusiasm and you have unbeatable combination.
  • 79. Dependability The successful businessman should have the capacity of dependability. He should use every effort to hold it constant and dependable, so that those who work under it know what to expect as it remains unfluctuating from day today. It keep him much to win the heart of both customers and workers. Courtesy Courtesy is to business what oil is to machinery. It costs nothing but wins a reputation. So businessman has to win the heart of everyone with his polite manners. Every one cannot know how may down is head before the polite and courteous businessman. Alertness A businessman must be alert to the opportunities surrounding his business. He must keep in touch with the world, and not keep himself to himself. He should move about and see what is going on for he has to estimate new wants and new inventions for creating fresh demands. Sociability Another notable quality of the businessman is ability to mix with anyone within a minute or two. He must get himself introduced to an unknown persons within a short time. Thus a businessman of sociable nature can easily win the confidence of many persons and much popularity among them.
  • 80. Classifications Agriculture and mining businesses are concerned with the production of raw material, such as plants or minerals. Financial businesses include banks and other companies that generate profit through investment and management of capital. Information businesses generate profits primarily from the resale of intellectual property and include movie studios, publishers and packaged software companies. Manufacturers produce products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars or pipes, are considered manufacturers. Real estate businesses generate profit from the selling, renting, and development of properties, homes, and buildings.
  • 81. Retailers and Distributors act as middle-men in getting goods produced by manufacturers to the intended consumer, generating a profit as a result of providing sales or distribution services. Most consumer-oriented stores and catalogue companies are distributors or retailers. See also: Franchising Service businesses offer intangible goods or services and typically generate a profit by charging for labor or other services provided to government, other businesses, or consumers. Organizations ranging from house decorators to consulting firms, restaurants, and even entertainers are types of service businesses. Transportation businesses deliver goods and individuals from location to location, generating a profit on the transportation costs Utilities produce public services, such as heat, electricity, or sewage treatment, and are usually government chartered.
  • 82. Meaning of Business Organization Business organization is composed of two words, business and organization. In order to understand the nature of business organization, it is necessary that the meaning of these two words is made clear to the readers. (1) Business Business is a human economic activity. It involves continuous and regular production and distribution of goods and services with a view to earn profit. Money flowing in and earning of profit through the satisfaction of the customers are the two measuring rods of the success of a business. (2) Organization The meaning of the word organization is generally divided into two parts (i) material organization and (ii) human organization. (i) Material Organization The material organization is the determining and providing of necessary raw materials, tools, capital, personnel etc in an enterprise fonts smooth functioning. (ii) Human Organization It is the appointment of qualified staff, dividing the duties and responsibilities of the personnel employed. Then grouping these duties in the form of posts and delegating authority to each post so that work is carried out as planned. Business Organization Thus is a process or an art of establishing effective cooperation between the factors of production (land, material, capital equipment. personnel) for producing or acquiring wealth with a view to earn profit in an enterprise. Scope of business organization. Business organization thus is a process or an art of establishing effective cooperation between the factors of production (land, material, capital equipment. personnel) for producing or acquiring wealth with a view to earn profit in an enterprise.
  • 83.  sole proprietorship is one person ownership without incorporation, e.g., corner grocery store, a housekeeper, a plumber or dog groomer, Freelance writers, copy editors, photographers and craftspeople,  partnership involves two persons or more in a business venture, e.g., lawyer partnership, common forms of partnerships are law firms, doctors sharing a small clinic or office, accountants and real estate partnerships. The partners share proportionally the profits or losses.  A corporation is owned by many people, usually thousands of people through "shares" which is basically a document saying you own a certain percent of a company. The share holders hire "officers" to operate the business, and these officers are people like managers and stuff like that. So in a corporation, the people who own the business do not run it, instead hired officers run it. corporation is a company with limited liability and shareholders, e.g., IBM or MacDonald Restaurants. .  A cooperative (also referred to as a co-op)is a form of business ownership that consists of a group of people who have joined together to perform a business function more efficiently than each individual could do alone. The purpose of a cooperative is not to make a profit for itself, but to improve each member's situation. However, members of certain types of cooperatives do make a profit by selling their product and/or service to customers who are not co-op members. Cooperative Business is an association of people who are united voluntarily to meet common social, cultural and economic needs. This is done by a jointly owned enterprise.
  • 84. Management The efficient and effective operation of a business, and study of this subject, is called management. The main branches of management are financial management, marketing management, human resource management, strategic management, production management, operation management, service management and information technology management Organizing a business The major factors affecting how a business Is organized are usually The size & scope of the business , and its anticipated management & ownership. Generally a smaller business is more flexible ,while larger business ,or those with wider ownership or more functional structures, will usually tend to be organized as partnership or( more commonly) corporations .In addition ,a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so