Definition of Business, Characteristics or Features and Objectives of Business - PPT for Junior Intermediate - Commerce - Andhra Pradesh State in India

1. UNIT -1
CONCEPT OF BUSINESS
Dr. K. THULASI KRISHNA, Ph.D.
AP MODEL SCHOOL & JUNIOR COLLEGE,
KANEKAL, ANANTHAPUR – Dist., A.P., INDIA
• tkk2007@gmail.com

2. Definition of ‘Business’
• The term ‘business’ refers to the ‘the state of being
busy’.
• L.H. Honey defined business as “a human activity
directed towards producing or acquiring wealth
through buying and selling of goods.
• Keith and Carlo defined business as “a sum of all
activities involved in the production and
distribution of goods and services for private
profits”.

3. Characteristics or Features of Business
Creation of utilities:
• Business makes goods more useful to
satisfy human wants.
• It enables people to satisfy their wants
more effectively and economically.
• It carries goods from the place of
production to the place of consumption
(utility).
• It makes goods available for use in future
through storage (time utility).

4. Deals with goods and services:
• Every business enterprise produces or buys goods and
services for selling them to others for a profit.
• Goods may be consumer goods or producer goods.
• Consumer goods are meant for direct use by the ultimate
consumers (Ex: Bread, tea, vegetables, etc.), whereas the
producer goods are used for the production of consumer or
capital goods like raw materials, machinery, etc.

5. Continuity in Dealings:
• Dealings in goods and services become
business only if undertaken on a
regular basis.
• A single isolated transaction of
purchase and sale does not constitute
business.

6. Sale, Transfer, or Exchange:
• All business activities involve transfer or exchange
of goods and services for some consideration.
• The consideration, called price is usually expressed
in terms of money.
Profit Motive:
• The primary objective of business is to earn profits.
• Profits are essential for the survival as well as
growth of business.

7. Risk and Uncertainty:
• Profit is the reward for assuming risk.
• Risk implies uncertainty of profit or the possibility of loss. Risk is a part and
parcel of business.
• Business enterprises operate in uncertain and uncontrollable environment.
Economic Activity: Business is an economic activity as it involves production
and distribution of goods and services for earning money.
Art as well as Science: Business is an art because it requires personal skills
and experience. It is also a science because it is based on certain principles and
laws.

8. Objectives of a Business
Objectives of business are classified into 4
categories namely,
• economic,
• social,
• human, and
• national objectives.

9. Economic Objectives:
• Earning Profit
• Creating Customers
• Innovation

10. Social Objectives:
• Supplying Desired Goods at Reasonable
Prices
• Fair Remuneration to Employees
• Employment Generation
• Social Welfare
• Payment of Government Dues

12. Classification of Economic Activities

13. Profession:
• It is an occupation requiring specialized
education.
• It refers to body of people in learned
occupation.
• A professional renders services of expert
nature to his clients for consulting fee.
• Examples for Professionals: Doctors, Lawyers,
Chartered Accountants

14. Employment:
• It is a contract of service.
• A person who works under the contract for a salary
is called an employee and the person who has given
the job to the employee is called employer.
• An employee works under an agreement as per the
rules of service and performs tasks assigned to him
by the employer.
• The relationship between the employer and the
employee is that of master and servant.

15. Business:
• It is an economic activity involving
production, exchange, distribution and sale
of goods and services with an objective of
making profits.

16. Thank you for your attention