Business Studies - Mr. Kailash Gururani
Economic and Non Economic Activities :
All Human beings have different types of needs. So, in order to fulfill those needs they have to perform some activities. Human activities are classified into Economic & non economic activities.
Basic Economic Non-Economic Purpose / Notice Those activities whose Those activities whose Objective is to earn money aim is not to earn money, and to create wealth. but to satisfy social, psychological and emotional needs. Examples People working in factories A house wife cooking food for her family A teacher teaching in a school A teacher teaching his/her Son/Daughter at home. Concept of Business :
Business refers to those economic activities involving the purchase production and / or sale of goods and services with a motive of earning parts by satisfying human needs in society.
Characteristics of Business:
- An economic activity : Business is considered an economic activity as it is undertaken with the objective of earning money.
- Production or procurement of goods and services: Business includes all the activities concerned with the production or procurement of goods & services for sale services include transportation, banking, Insurance etc.
- Sale or exchange of goods & services: These should be sale or exchange of goods & service between the seller & the buyer.
- Dealing in goods & services an a regular basis : These should be regularity of dealings or exchange of goods & services. One single transaction of sale or purchase does not constitute business.
- Profit Earning: The main purpose of business is to earn profit. A business cannot survive without making profits.
- Uncertainty of return : Every business invests money with the objective of earning profit. However there is always a possibility of losses.
- Element of risk: All business activities carry some elements of risk because future is uncertain and business has no control over several factors like, strikes, fire, theft, change in consumer taste etc.
Comparison of Business Profession and Employment :
Business : Refers to Purchase production and / or sale of goods & services with the objective of earning profit.
Profession : Includes those activities which require special knowledge & skills in the occupation.
Employment : Refers to the occupation in which people work for others and get remuneration in return.
Business Profession Employment Fishing
Medical (Doctor)
Worker
Manufacturing goods
Legal (Lawyer)
Employ Mining Accountancy (C.A)
Basis of Distinction Business Profession Employment Mode of Establishment Starts after completing some legal formalities if needed Membership of a professional body and certificate of practice required Start after getting appointment letter
Nature of work Provision of goods and services to the public. Personalized services of expert nature Work allotted by the employee according to the contract. Qualification No minimum Qualification is necessary Professional Qualification and training required Qualification and training required prescribed by the employer. Capital Investment Capital needed according to nature & size of business. Limited capital for establishment No capital required
Reward /Return Profits Professional Fee Salary or wage Risk It Involves high risk The degree of risk is low. No risk in it.
Code of conduct No code of conduct Professional code of conduct is to be followed The terms and
conditions of service contract are to be Followed.
CBSE Business Studies Class XI ( By Mr. Kailash Gururani )
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