- \n
- Economic and non-economic activities<\/li>\n
- Business and its characteristics<\/li>\n
- Business, Profession and Employment<\/li>\n
- Classification of business activities<\/li>\n
- Industry and commerce<\/li>\n
- Objectives of business<\/li>\n
- Business risk<\/li>\n
- Factors to be considered before starting a business.<\/li>\n<\/ul>\n
Activities which human beings undertake are known as human activities. We can divide these activities into two categories.<\/p>\n
- \n
- Economic activities<\/li>\n
- Non-economic activities<\/li>\n<\/ol>\n
1. Economic Activities:
\nThe human activities that are undertaken with an objective to earn money or livelihood is known as economic activities. eg: A worker working in a factory, a doctor operating in his hospital, a manager working in the office, a teacher teaching in a school etc.<\/p>\n2. Non-economic activities:
\nActivities are undertaken to derive psychological satisfaction are known as non economic activities. eg: Mother preparing food for her children, Praying, listening to radio or watching television, playing football with friends, etc.<\/p>\nTypes of economic activities:<\/p>\n
- \n
- Business<\/li>\n
- Employment<\/li>\n
- Profession<\/li>\n<\/ul>\n
Business:<\/span>
\nBusiness may be defined as an economic activity involving the production or purchase and sale of goods and services with the main object of earning profit by satisfying human needs in the society.
\nCharacteristics of business<\/p>\n- \n
- Business is an economic activity with the object of earning profit.<\/li>\n
- Business includes all the activities concerned with the production or procurement of goods and services.<\/li>\n
- There should be sale or exchange of goods and services for the satisfaction of human needs.<\/li>\n
- Business involves dealings in goods or services on a regular basis. Normally, one single transaction of sale or purchase is not treated as business.<\/li>\n
- One of the main objectives of business is to earn maximum profit.<\/li>\n
- Business involves risk and uncertainty of income. Risk means the possibility of loss due to change in consumer taste and fashion, strike, lockout competition, fire, theft etc.<\/li>\n<\/ol>\n
Employment:<\/span>
\nEmployment refers to that type of economic activity in which people engage in some work for others regularly and get salary or wages in return of their services.
\nCharacteristics of Employment<\/p>\n- \n
- There must exist employer-employee relationship.<\/li>\n
- There must be a service contract between the employer and employee.<\/li>\n
- Employees get salary or wages for their services<\/li>\n
- Regularity in service.<\/li>\n<\/ol>\n
Profession:<\/span>
\nProfession refers to an occupation which requires specialized knowledge, skip and training. Its objective is to provide service to the society.
\nCharacteristics of Profession<\/p>\n- \n
- A profession requires specialized knowledge, training and skill<\/li>\n
- The membership of a professional body is a must<\/li>\n
- Professionals have a code of conduct<\/li>\n
- They charge fee in return of their service.<\/li>\n<\/ol>\n
Comparison of Business, Profession and Employment:
\n![\"Plus](\"https:\/\/www.aplustopper.com\/wp-content\/uploads\/2019\/07\/Plus-One-Business-Studies-Notes-Chapter-1-Nature-and-Purpose-of-Business-1.png\")
\nClassification of Business Activities: Business activities may be classified into two categories<\/p>\n- \n
- Industry<\/li>\n
- Commerce.<\/li>\n<\/ul>\n
Chart showing business activities
\n![\"Plus](\"https:\/\/www.aplustopper.com\/wp-content\/uploads\/2019\/07\/Plus-One-Business-Studies-Notes-Chapter-1-Nature-and-Purpose-of-Business-2.png\")
<\/p>\nIndustry:<\/span>
\nIndustry refers to economic activities, which are connected with conversion of resources into useful goods. Industries may be divided into 3 categories.
\nThey are
\n1. Primary industries:
\nPrimary industries are connected with the extraction and production of natural resources and reproduction and development of living organisms, plants, etc. Such industries are further divided into two.
\n(i) Extractive industries:
\nThese industries extract products from natural resources. eg: mining, farrqing, hunting, fishing etc.<\/p>\n(ii) Genetic industries:
\nThese industries are engaged in activities like rearing and breeding of animals, birds and plants. eg: diary faming, paultry farming, floriculture, pisciculture etc.<\/p>\n2. Secondary industries:
\nSecondary industries deal with materials extracted at the primary stage. Such goods may be used for consumption or for further production. Secondary industries are classified into two.
\nThey are:
\n(i) Manufacturing industries:
\nManufacturing industries engage in converting raw materials into finished goods. eg: Conversion of rubber into cotton, timber into furniture rubber into tyres etc. Manufacturing industries may be further divided into four categories. They are,<\/p>\n- \n
- Analytical industry which analyses and separates different elements from the same materials. eg: Oil refinery<\/li>\n
- Synthetical industry which combines various ingredients into a new product. eg: cement<\/li>\n
- Processing industry which involves successive stages for manufacturing finished products. eg: Sugar and paper industry.<\/li>\n
- Assembling industry which assembles different component parts to make a new product. eg: television, car, computer, etc.<\/li>\n<\/ul>\n
(ii) Construction industries:
\nThese industries are involved in the construction of buildings, dams, bridges, roads etc.<\/p>\n3. Tertiary industries:
\nThese are concerned with providing support services to primary and secondary industries. eg: Transport, banking, insurance, warehousing, communication, advertising etc.<\/p>\nCommerce:<\/span>
\nCommerce is defined as all activities involving the removal of hindrances in the process of exchange of goods. It includes all those activities, which are necessary for the free flow of goods and services from the producer to the consumer. Commerce includes trade and auxiliaries to trade.
\nCommerce = Trade + auxiliaries to trade
\nFunctions of commerce:<\/p>\n
![\"Plus](\"https:\/\/www.aplustopper.com\/wp-content\/uploads\/2019\/07\/Plus-One-Business-Studies-Notes-Chapter-1-Nature-and-Purpose-of-Business-3.png\")