Nature of Prodeuction of Expert Job work purchase and sale serve performance 4. Qualification Undefined Professional As per the need training of the employer 1. Business is an economic activity 2. It includes the activities of production or purchase and distribution. It deals in goods and services.
It implies regularity of transactions. It aims at earning profits through the satisfaction of human wants. It involves risk; it is not certain that adequate profit will be earned.
It creates utilities. Nature and Scope of Business :: 5 8. Objectives of business Success in business depends on proper formulation of its objectives. Objectives must be clear, and attainable. Objectives may be divided into two parts - i economic and ii social. Economic Objectives : Economic objectives of business include earning adequate profit or satisfactory return on capital invested, survival in the case of competition and growth to maintain progress.
Social Objectives: Social objectives include providing employment opportunities, supply of quality goods and services at reasonable price, improving the standard of living and contributing to environmental protection. It also includes justice to workers in terms of wages, welfare amenities, improved service conditions and professional growth. It is an organised and systematised activity for profit. It is concerned with activities of people working towards a common goal. The modern society can not exist without business.
The need and importance of business in society can be described as follows: 1. Improvement in standard of living: Business helps people in general to improve their standard of living. Proper utilization of resources: It leads to effective utilization of the scarce resources of society. It provides facility of mass production.
Services such as supply of water, electricity etc. Creates utilities: Business makes goods more useful to satisfy human wants. It adds to products the utilities of person, time, place, form, knowledge etc. Thus, people are able to satisfy their wants effectively and economically. Employment opportunities: It provides employment opportunities to large number of people in society.
Workers' welfare Business organisations these days take care of various welfare activities for workers. They provide safer and healthier work environment for employees. Intext Questions 1. Match the following statements with appropriate term: Statement Term 1 An occupation which involves the use of a Occupation some basic skills which can be developed by practice.
Nature and Scope of Business :: 7 2 It includes human activities of production, b Profession buying and selling. We may classify business activities on the basis of functions into two broad categories a Industry and b Commerce. Industry is concerned with the production and processing of goods. Let us examine the characteristics of industry and commerce.
Industry and its Types Industry means production of goods for sale by the application of human or mechanical power. In other words, industry refers to economic activities which are connected with raising, producing and processing of goods and services. Types of Industries Industries are divided into two broad categories: i Primary industries ii Secondary industries.
Primary industries include all those activities which are connected with extraction, producing and processing of natural resources. These industries may be further sub-divided into two types: a extractive and b genetic. Secondary industries are concerned with the materials which have already been produced at the primary stage.
For example, mining of iron ore is a primary industry, but manufacture of steel is a secondary industry. Products of these industries are used either directly for consumption such as food grains, fruits and vegetables or as raw materials such as cotton, sugar-cane, etc. Reproduction and multiplication is the main activity in these industries, such as, agriculture, animal husbandry, dairy, poultry, pisciculture etc. Main products are milk, wool, butter, cheese, meat, egg, fish, seeds of plants, etc.
Secondary industries may also be of two types: a manufacturing, and b construction. Cotton is converted onto textiles and iron one is converted into in these industries.
It creates a form utility of the product. Their output do not consists of movable goods. It makes use of the output of other industries like brick, cement, steel etc. Characteristics of Commerce Commerce is the sum total of all the activities connected with the placing of the product before the ultimate consumer.
It provides the necessary link between the producer and the consumer of goods. Commerce includes all those business activities which are undertaken for the sale or exchange of goods and services and facilitates their availability for consumption and use - through trade, transport, banking, insurance, and warehousing. Thus commerce includes trade and auxiliaries to trade, that is transport, banking, insurance and warehousing.
The main characteristics of commerce are as follows: i Commerce is the sum total of activities which facilitate the availability of goods to consumers from different producers.
Trade and its types Trade is an integral part of commerce and refers to sale and transfer of goods. It involves actual buying and selling of goods. It means exchange of goods and services for cash or credit. Traders help in directing the flow of goods to the most profitable market. They also bring about equitable distribution of goods on a national and international scale.
It is because goods are produced on a large scale and it is difficult for producers to reach individual customers, that trade is said to remove the hindrance of persons through traders.
Goods acquire place utility through trade. The primary object of home trade is to bring about proper distribution of goods within the country. It may be divided into two types a Wholesale Trade and b Retail Trade a Wholesale Trade: Wholesale trade involves buying goods from producers and selling them in small quantities to retailers.
The wholesaler generally deals in large quantities of goods of a limited number of varieties. He serves as a connecting link between the producer and the retail dealer. A retailer usually purchases goods from wholesalers or manufacturers and deals in a variety of goods of different manufacturers. It implies buying and selling of goods by traders of two different countries.
It creates a very wide market for goods produced in different countries. External trade involves a Export and b Import. Export is concerned with the sale of goods to foreign countries. Import trade relates to the purchasing of goods from other countries. Meaning Production of Sum total of Exchange of goods goods and activities for price through services for connected with buying and selling sale transfer of goods from producers to consumers 2.
Utility Creates form Creates time Creates time and utility and place place utility and utility removes hindrance of persons 3. Broad Four types: Two types: Two types: classifi- genetic, Trade and internal and cation extractive, auxiliaries external manufacturing to trade and construction Inter-relationship between Industry, Trade and Commerce All the three branches of business are closely related to each other.
Each depends upon the other for the achievement of aims and objectives of business. For example, industry is concerned with the production of goods and services, trade is related with sale and purchase of products, and commerce arranges for their distribution. Industry can succeed only if goods are marketed and without production of goods, there cannot be commerce and trade.
Hence, trade provides necessary support to industry and commerce. Thus, industry, trade and commerce are inter-dependent and cannot operate in isolation. Service facilities also provide necessary support to trade. Nature and Scope of Business :: 13 II. Transportation helps trade by facilitating the movement of goods and passengers from one place to another.
All kinds of goods can be transported in large quantities over long distances. A business can depend upon a number of modes of transportation - land transport road, railways, and pipeline , water transport inland waterways, coastal and sea and air transport domestic and international. Communication : Now-a-days it is not possible to have business without communication.
Communication implies transmission of information, ideas, opinions, etc between two or more persons. It is a systematic and continuing process of telling, listening and understanding. Communication may be of two types - i internal and ii external. Internal communication refers to transmission of information by a person to another of the same organisation.
Methods of communication may include face to face, by telephone, postal mail, etc. On the basis of means of communication, there are two types of communication —oral and written. Banking and Finance Banking provides safe, efficient and convenient mode of payment for goods in inland trade as well as in foreign trade. Banking helps business firms to overcome the problem of finance by lending money as and when required.
Banks accept deposits and lend money. The other services of banks are: discounting of bills, collection of cheques, acting as agent. A bank accepts deposits on various accounts such as fixed deposit, savings, recurring deposit, and current.
Loans are granted through over-draft, cash credit, loans and advances, discounting of bills. Other services of banks include collection of payments on cheques, bills, drafts etc. Banks are of various types: commercial, agricultural, indigenous, rural, cooperative, exchange, central, etc. In fact banking is the lifeline of business.
Finance: Finance is the life blood of business. It implies provision of money at the time it is required by business. Provision of funds is essential for every type of trade. It means arrangement of cash and credit to carry out business activities. Types of finance required by business are long—term, medium—term and short—term.
Customer satisfaction is a vital factor in successful business strategy. The name of a company should evoke trust and respect among customers for enduring success. This is achieved by a company that adopts ethical practices. When a company because of its belief in high ethics is perceived as such, any crisis or mishaps along the way is tolerated by the customers as a minor aberration. Such companies are also guided by their ethics to survive a critical situation.
Preferred values are identified ensuring that organizational behaviours are aligned with those values. Ethical conduct towards customers builds a strong competitive position. It promotes a strong public image. Regulators eye companies functioning ethically as responsible citizens. The regulator need not always monitor the functioning of the ethically sound company. The company earns profits and reputational gains if it acts within the confines of business ethics.
Here are corporations with policies we can support:. The company is also a staunch advocate of free speech, which can be observed from its frequent conflicts with the Chinese government.
Google is also an open supporter of gay rights. Just to name a few, Google employees have access to free health care and treatment from on-site doctors, free legal advice with discounted legal services, a fully stock snack pantry and onsite cafeteria staffed by world-class chefs, no less , and a free on-site nursery. With such a stellar record of social awareness and positive employee relations, Google is easily the best example of ethics in the corporate world today.
Through the TEALS program, Microsoft employees are encouraged to volunteer at local schools to instruct students in computer science, in the hopes that it will inspire them to enter the technology industry. Intel is also interested in making these areas more diverse; the company has many donation funds and programs to encourage girls and underprivileged minorities to study in these fields. Two Indian companies among most ethical in the world:.
Man is a social animal and cannot live in isolation. He is expected to behave in a manner that is socially and morally acceptable to others. The same applies to businesses. Though the primary objective of any business is to earn maximum profits for the owners and shareholders, it is also expected to conduct its operations in a manner that it fulfils its social obligations also.
For example, though it is not binding on any private sector company to provide employment to the disabled or weaker sections of the society, it is considered to be a part of the social responsibility of the company to absorb people from such sections of the society. Similarly though there is not written law to compel a company to engage in acts to do something to reduce pollution or to do something for the betterment of environment, taking up projects to clean up environment are considered to be a part of the social responsibility of the company.
Corporate Social Responsibility CSR is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.
This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. While CSR encompasses the economic, legal, ethical, and discretionary responsibilities of organizations, business ethics usually focuses on the moral judgments and behavior of individuals and groups within organizations.
Thus, the study of business ethics may be regarded as a component of the larger study of corporate social responsibility. The rules came into effect from 1 April Though business ethics and social responsibility seem to be overlapping, there has always been a contradiction between the two. Companies, though they are committed to be socially responsible for their behaviour have been found to be engaging in acts that cannot be called ethical.
What is good for the society is sometimes not good for the business, and what is good for the business is almost always not good for the society. If the society is conscious, it responds in such a way that businesses are forced to behave responsibly. The same applies to the administration and the judiciary of any country. Selling of liquor and tobacco in any society is not against business ethics though it may be against the principles of social responsibility.
The same applies to lotteries and gambling. But it is certainly against business ethics as well as against social responsibility to entice minors to engage in smoking and drinking. Ethics are the building block of our society and thus should be the building block of our corporations. It can be concluded that it is the high time business ethics should be practiced all over the globe in the benefit of the common society as described in the paper.
It is not only in the favour of the mass but also has advantages for the corporate. Like Liked by 1 person. Definition of business … […]. Like Like. Now-a-days many MBA courses in leadership and management include lessons which are derived from values, practices and culture of India. I believe that Indian ethos can help in creating strong relationships, uprooting unethical practices and improve work-life balance.
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Notify me of new posts via email. March 25, August 12, Amit Kumar. Ethics Ethics is a branch of social science. What does Business Ethics mean?
It tells what to do and what not to do for the welfare of the society. All businessmen must follow this code of conduct. Based on moral and social values : Business ethics is based on moral and social values.
It contains moral and social principles rules for doing business. This includes self-control, consumer protection and welfare, service to society, fair treatment to social groups, not to exploit others, etc. Gives protection to social groups : Business ethics give protection to different social groups such as consumers, employees, small businessmen, government, shareholders, creditors, etc.
Provides basic framework : Business ethics provide a basic framework for doing business. It gives the social cultural, economic, legal and other limits of business. Business must be conducted within these limits. Voluntary : Business ethics must be voluntary. The businessmen must accept business ethics on their own.
Business ethics must be like self-discipline. It must not be enforced by law. Requires education and guidance : Businessmen must be given proper education and guidance before introducing business ethics. The businessmen must be motivated to use business ethics.
They must be informed about the advantages of using business ethics. Trade Associations and Chambers of Commerce must also play an active role in this matter.
Relative Term : Business ethics is a relative term. That is, it changes from one business to another. It also changes from one country to another.
What is considered as good in one country may be taboo in another country. New concept : Business ethics is a newer concept. It is strictly followed only in developed countries. It is not followed properly in poor and developing countries. Importance of Business Ethics Long-term growth : sustainability comes from an ethical long-term vision which takes into account all stakeholders. Smaller but sustainable profits long-term must be better than higher but riskier short-lived profits. Cost and risk reduction : companies which recognise the importance of business ethics will need to spend less protecting themselves from internal and external behavioural risks, especially when supported by sound governance systems and independent research Anti-capitalist sentiment : the financial crisis marked another blow for the credibility of capitalism, with resentment towards bank bailouts at the cost of fundamental rights such as education and healthcare.
Limited resources : the planet has finite resources but a growing population; without ethics, those resources are repleted for purely individual gain at huge cost both to current and future generations. Ethics in Compliance Compliance is about obeying and adhering to rules and authority. Ethics in Finance The ethical issues in finance that companies and employees are confronted with include: In accounting — window dressing, misleading financial analysis.
Executive compensation. Bribery, kickbacks, over billing of expenses, facilitation payments. Fake reimbursements 3. The issues of ethics faced by HRM include: Discrimination issues i. Sexual harassment. Affirmative Action. Issues surrounding the representation of employees and the democratization of the workplace, trade ization. Issues affecting the privacy of the employee: workplace surveillance, drug testing.
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