This document provides an overview of business and related concepts. It defines business as the sum of all economic activities from production to consumption of goods and services. Key points made include: - Human activities are classified as either economic, which aim to earn money, or non-economic. Business falls under economic activities. - Business encompasses industry, which is production, and commerce, which is the transportation of goods to consumers. - Industry is further divided into primary, secondary and tertiary. Commerce involves trade and aids to trade like transportation and warehousing to overcome barriers. - Characteristics of business are that it is an economic activity, involves exchange, has regular dealings, profit motive, risk, and

1. Chapter-1
Business: An Introduction
BY: ISHA KALRA
ASSISTANT PROFESSOR [BBA AND MBA]

2. Business = Industry + Commerce
 Everybody is busy in doing some activity or the other, like:
1. Some people are busy in producing things.
2. Some people are busy in Buying & selling things.
3. Some people are busy in the profession of law.
4. Some people are busy in treating patients.
5. Some people are serving in factories.
6. Some people are serving in government offices.
7. Some people are busy in Propagating religion, and
8. Some people are busy in doing social work.
All these activities are called human activities.

3. Human Activities
Economic Activities
Business
1. Buying & selling
2. Industry
3.Insurance
4. Transport
5.Warehousing
6. Advertising, etc.
Profession
1. Law
2. Medical
3. Chartered
Accountancy, etc.
Employment
1. Manager
2. Supervisor
3. Workers, etc
Non-Economic Activities
1. Religious, Preaching,
etc.,
2. Social Work, etc.

4. Human Activities
Economic Activities
 It refers to all that activities which is
undertaken with the objective of
earning money.
 It includes buying & selling of things ,
doing legal practices, working in some
factory
Non-Economic Activities
 It Refers to all those activities which
aims not to earn money but to gain
mental satisfaction.
 For example: Propagating Religion,
doing social work, etc.

5. Meaning of Business
 Business is the sum total of all those activities which starts right from the
production of goods & services down to the task of taking them to the
consumers.
 Here services means those activities which are connected with the carrying of
goods from the place of production and taking them to the place of
consumption.
For Example: they include transport and communication, insurance, storage,
banking, etc.

6. Definitions of Business
 According to Dr. W.R. Spriegel, “ All of the activities included in the
production & sale of goods or services may be classified as business
activities.”
 According to L.H.Haney, “Business may be defined as human activity
directed towards producing or acquiring wealth through buying or selling
goods.”

7. Characteristics of Business
1. Economic Activity
2. Exchange of goods & services
3. Regularity in dealings
4. Profit Motive
5. Element of Risk
6. Creation of Utility
7. Consumer satisfaction

8. Classification of Business Activities
Business Activities
Industry
Commerce
Trade Aids to Trade
The activities
connected with
the production
are called
Industry
the activities
connected
with the
transport of
goods
produced from
the factories
to the
consumers
are called
commerce

9. Industry
 Industry includes all those activities through which the raw material is
converted into finished goods. In other words, industry means the
production and manufacturing of goods.
 Three types of goods manufactured in the industry
1. Producer’s or capital Goods
2. Consumer’s Goods
3. Intermediate Goods

10. Types of Industry
 Primary Industry: It refers to that industry which produces unrefined raw
material out of which finished products are made.
 Secondary Industry: It refers to that industry which uses the raw material
produced by primary industry and changes them into finished items.
 Tertiary Industry: It refers to that industry which produces services.

11. Types of Industry
Primary
Genetic Industry
1. Animal Husbandary
2. Poultry Farming
3. Plantation
Extractive Industry
1. Mining
2. Agriculture
Secondary
Manufacturing
Industry
1. Sugar
2. Cement
3. Textile
Constructive
Industry
1. Building
2. Road
3. Bridge
Tertiary industry or
Service Industry
1. Transport
2. Banking
3. Insurance
4. Advertising
5. Warehousing

12. Commerce
 It refers to the sum total of all those activities which are engaged in the removal of
hindrances of person, place, time, Risk, Finance, and Information in the exchange of
commodities.
 Commerce is the sum total of all those activities, which have to be undertaken in carrying
things from the place of production to the place of consumption
Factories
Wholesale
Dealer
Retailer
Consumers

13. Definitions of Commerce
 According to James Stephenson, “ Commerce embraces all those
processes, which help to the break the barriers between producers and
consumers. It is the some total of all those processes, which are engaged
in the removal of hindrances of person (trade), place (transport &
insurance) and time (warehousing) in the exchange ( banking) of
commodities.”

14. Components of commerce
Commerce
Trade
It refers to purchase & sale of
goods & services with profit
motive.
Aids to
Trade
It refers to all those activities which are
undertaken to overcome the hurdles
appearing in the way of trade

15. Trade
Home trade
 When buying & selling of things takes
place within the national boundaries,
it is called home trade.
 Local Level
 State level
 National Level
Foreign Trade
 When the conduct of trade crosses
the national boundaries and reach the
foreign land, foreign trade is born.
 Import Trade
 Export trade
 Entreport trade

16. Aids to trade
 It refers to all those activities which are undertaken to overcome the hurdles appearing in the
way of trade are called aids to trade.
Hindrances Solutions
Persons Middlemen
Place Transport & communication
Time Warehousing
Risk Insurance
Finance Banking
Information Advertising