summary grade 11/ first year Nature and meaning of business
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Module
BBA
Institution
Maharishi Dayanand University
The summary of business studies grade 11 textbook. Easy to understand and summarized to succeed in tests and exams. The points are explained very well and in easy language.
Introduction to Business, Nature of
Business, Objectives of Business
Humans are busy in doing some activities or the other. There are some activities
which are undertaken to earn money and there are some activities which are
undertaken not for earning money, but for satisfaction. The first type of activities
are called Economic Activities, while the second type of activities are called Non-
Economic Activities. If we talk about business, then business refers to that
economic activity which is conducted on regular basis to earn profit through the
production and sales of goods and services.
Meaning of Business:- Business is the sum total of all the activities which
starts right from the production of goods and 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.
Definition of Business:- According to L.H. Haney, “Business may be defined as
human activity directed towards producing or acquiring wealth through buying or
selling goods.”
Nature of Business:-
An Economic Activity
Exchange of goods and services
Regularity in dealing
Profit Motive
Element of risk
Creation of Utility
Consumer Satisfaction
Create Employment Opportunities
, 1. An Economic Activity:- Economic activities mean the exchange of goods
and services with the purpose of earning money. It is essential to see that
any activity performed by an individual should be economic in nature in
order to be called business, for example, the purchase – sale of goods by a
shopkeeper.
2. Exchange of goods and services:- In business, if we purchase any material
for our personal use them it will not be called business, the material should
only be purchased for sale. For example, if I purchase a bed for my
bedroom then it is not business, but if I purchase it for a sale then it’s called
business.
3. Regularity in dealing:- In business regularity is important. For example, if a
person purchase a bicycle and sold it but for next few months he does not
perform any transaction then it is not called business. The purchase and
sale should be on regular basis to be called a business.
4. Profit Motive:- The purpose of the person who is doing transactions is to
earn profit. If your purpose is to earn profit only then it will be called
business.
5. Element of risk:- It is not easy to do a business, there will always be many
difficulties in front of you. A little mistake in finding a solution to problem
can destroy whole business. But if you want to do business you must have
the guts to bear risks.
6. Creation of utility:- In order to make things more useful to society their
utility is enhanced by the efforts of businessman. Utility is created in
various ways, like the utility of place, form, time, and ownership. Utility of
place is created by carrying goods from the place of production to the place
of consumption, utility of form is created by changing their size or
form,utility of time is created by storing them in godowns etc.
7. Consumer Satisfaction:- Consumer satisfaction is important in business as
well as earning profit. You cannot get success without consumer
satisfaction , so businessman should make goods and services according to
needs of consumers.
8. Create Employment Opportunities:- Businesses help in creating
employment opportunities. Because when a business is opened it will need
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