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Growth: Now the last step of undefined or natural objective is how to achieve growth and development. No business remains stagnant after entering in to the market. So next objective is to find the opportunities for the growth and development. To accept the opportunities and march towards the growth of the business. Thus the behavior of every business is natural like human being first to seek for survival and after surviving to achieve growth along with stability.

Profit: Business activities are done mainly for earning profit. A privately owned business earns profit to maximize wealth or for the growth According to Peter F. Drucker the problem of any business is not the maximization of profit but to earn or achieve profits to that extent that it covers the risk of economic activity undertaken by the firm and finally avoid loss.

Create Customers: Business activities mainly consist of transfer, sale or exchange of goods and services to satisfy the needs of customers. Thus it means that for the business to sustain it is very necessary that these goods and services should be bought by the people which is offered by the business. Thus creation of customers is one of the economic objectives for the existence of the business.

Customers Satisfaction: Only creation of the group or body of customers is not enough. Once the body customers are created it is very essential to hold them towards our goods and services. The satisfaction obtained from the goods and services in terms of quantity, quality and price should be given at most important for holding the customers towards our products. Along with it the after sales service e.g. free repairing, free services, replacement up to certain period etc

Maximum Utilization of Resources: Every business has scarce resource, so it becomes important for every business to check the use of resources and try to make best and maximum utilization of it. Resources should not remain unutilized and at the same time there should not be shortage or scarcity of required resource. Thus by taking these measures the cost of product can be maintained to the minimum possible level and also the resources available will be utilized at their best.

Maximization of Wealth: As every person faces the financial crisis and also face the contingences at any stage of life. Business also faces financial crisis and also has to face the contingences during its life cycle. So one of the objectives is to keep business economically sound by retaining the part of profit in to the business.

Supply of desired goods: If the business fails to maintain a continuous and sufficient supply of unadulterated goods and articles of standard quantity, it will be failing in fulfilling its social objectives and is likely to incur the rage of the society.

Avoiding anti social practice: In the modern concept of the business it is necessary that business should work with the objective of minimum profit or reasonable profit. It is necessary that it does not charge the higher profit from the customers and aim at profiteering activity.

Employment generation: Being the part of the society its the business that has to create the employment opportunities. Sometimes it seems quite conflicting with another objective of business i.e. to curb the cost or reduce the cost.

Justice to Employees: The first and basic requirement for getting the best output from the people is to give justice to them at all the different levels especially in the form of fair wages and other incentives. This part has to be taken care because it directly affects the efficiency and also the productivity of the business.

Human Resource Development: The core objective of business is to innovate and create customers and these objectives can be fulfilled only when the employees are given appropriate opportunities for the development of their skills and abilities. The working atmosphere should be provided such that they grow and develop as mature and productive resource for the business.

Job Satisfaction: Employees are always in search of job satisfactory environment. Business has to take care that it provides interesting and challenging job to the employees that will create interest of employees towards their work, which will finally create the pleasant working atmosphere and satisfaction towards the work undertaken by them.

Participation in Management: The business enterprise will get the best consideration form their employees when they are given the chance to participate in some of the management decisions. It doesnt mean that participation in all the managerial decisions but in some of the decisions where it feels appropriate.

Industry includes all types of human efforts leading to generation of products to satisfy human wants -L. Dicksee Industry transforms the raw-materials obtained from nature in to such form which may satisfy human needs -R.L Stanton


Development of Trade and Commerce: Employment Opportunities:

Production of Various Commodities:

Mass Production:

Features of industry
Economic Development Human and Mechanical Labour:

Conversion: Natural Resources:

Economic Activity:

Features of an industry
Conversion: Industries basically convert the natural and other resources which directly cannot satisfy human wants into products and goods which satisfy the human wants. Thus conversion of materials into goods and services for the human satisfaction is the basic feature of the industry. Natural Resources: Natural resources are gift of god to mankind. But some of the natural resources can be directly utilized by human beings e.g. air, but there are many natural resources which human beings cannot use directly e.g. crude oil, minerals, etc.

Economic Activity: The activity which is carried out with the intention of earning profit is economic activity. Thus industries also have the same intention or concept behind carrying production and manufacturing activities. Human and Mechanical Labour: Industries makes the utilization of human and mechanical labour for production. For e.g. carpenter makes furniture, handicrafts, etc. Thus utilization of human labour for production along with mechanical labour is one of the distinct features of industry. For e.g. use of machines, cars, lifts etc.

Mass Production: As the demand for the goods and services are increasing it has become very necessary that production process should be given impetus. Industries help in bulk or mass production which will help to meet the increasing demand. Employment Opportunities: Industry being one of the important parts of the economy helps to stabilize it by creating and providing employment opportunities. and also too many other number of people.

Utility: Industry increases the utility of various resources by changing their forms, e.g. furniture from woods, shoes from leather etc. Thus industry increases the utility of various materials. Thus industries increase the form, time, and place utility of the goods and services. Development of Trade and Commerce: Industrial development results into the development of trade and commerce. Development of industry is rapid development of trade and commerce

Production of Various Commodities: Production of variety of commodities has been possible with the help of industry, and they can be used by the consumers. These industries undertake research activities with the help of it they innovate and improve the existing products Economic Development: Industries give a boost to the economy. With establishment of new industries, there is an increase in production, trade and commerce, development. There is reduction in unemployment so there is an increase in national income.



Ancillary services

Internal Trade Retail trade Wholesale trade

External Trade Export Import Re-export

Transportation Warehousing Insurance Financing Banking Advertising Agent communication

Definition of commerce
Commerce includes all those activities which are connected with exchange of goods and services -Palekar Trade and its ancillary services mean commerce. -Prof. Savarkar Commerce means the process of distribution of goods and services. -Prof. G.K. Buknole COMMERCE = TRADE+ANCILLARY SERVICES

Features of Commerce
Exchange: Trade is a precondition of commerce. Commerce starts with exchange of goods and services. This exchange should be continuous and regular. Economic Activity: Commerce is an economic activity. Commercial activities are carried out with idea of gaining financial returns or profit, Continuity of Services: Development of commerce depends upon trade, the various auxiliary services like transportation, insurance, banking, means of communication brokerage (agency) etc. Economic activities will develop these services & remain regular and continuous.

Increase in Utility: Industry increases the form utility of a product while commerce increases the place and time utility of the product. Commercial activities are required to reduce the obstacles between producer and the consumers. Consumer-oriented: Various commercial senders are carried out with the aim of satisfying the consumers and the numerous needs of the consumers. Thus trade and auxiliary services should be according to the expectation of the consumer's wishes

Importance of Commerce
Exchange: Exchange becomes easy and speedy due to commerce. Product of one country of the world can "reach the other countries of the world through commercial activities, commerce provides a boost to the economic development with the help of auxiliary services like banking, insurance, warehousing, means of communication, etc. Ancillary Services: These Ancillary services make the exchange easy, fast and continuous. The economic development of a nation is made possible by the various ancillary services of commerce. Development of Banking and means of transportation in a country are the measures of the country's development. In absence of ancillary services, the exchange would be less speedy and difficult.

Time Utility: Warehousing facilities increase the time utility of various products. Commercial brokers solve the difficulties of traders. Economic Development: All the nations of the world are ready to, attain economic development. Commerce helps the nations in attaining economic progress. Importance of commerce is increasing day by day throughout the world.

Availability: The certainty of availability of the various commodities depends upon the auxiliary services. Human needs constantly multiply. We satisfy our needs by exchange of money, but little do we realize that how many efforts were made to provide as the various commodities.


Economic system
The term Economic System refers to an organization consisting of certain institutions, which are developed with a view to utilize productive resources for the purpose of satisfying human wants.

The economic system of any nation is essentially, man-made and influenced by the philosophy, ideals, desires and attitudes of its people and the methods they want to pursue to fulfill their chosen ideals and goals. The economic system helps human wants, such as earning, spending and saving. The economy of a country in terms of consumption, production and should be strong.

Types of economic system

Capitalist Economic System of U.S.A & Japan, Communist Economic System of China, Yugoslavia, Poland and Cuba Mixed Economic System of Britain, India, France, Sweden and Holland.


Capitalism is an economic system in which individuals are relatively free to determine how goods and services shall be produced and allocated. In this system capital is owned and invested by individuals and private-owned institutions to earn profit. The most fundamental feature of capitalism is the right of the individuals to own tangible and intangible private property. This right is expected to provide the incentive to initiate and continue the economic activity. The system is marked by little or no interference by the Government in business run by private individuals or institutions.

Capitalism is that system of economic organization in which free enterprise, competition and private ownership of property generally prevails. Prof. R.T. Bye Capitalism is a system of economic organization featured by the private ownership and the use for private profit of the man-made and nature-made capital. - William Loucks and Hoot Capitalism is a system in which property is privately owned and economic decisions are privately made.
Ferguson & Kreps

Features of capitalism
The Right of Private Property Productive factors such as land, factories, machinery, mines, etc are under private ownership. The owners of these factors are free to use them in the manner they like. However, the govt. may put some restrictions for the benefit of the society. Price Mechanism It is regulating mechanism in capitalist society. Here the forces of demand and supply in capitalist society bring equilibrium between different economic activities.

Freedom of Enterprise Everybody can be engaged in any economic activity, he likes. He is free to set up any firm to produce goods. Thus there is full freedom as to choice of work, occupation and enterprise. Everybody is free to take economic decisions. Freedom of consumers People are free to spend their income as the like. Producers produce only those goods which consumers wish to buy so, consumers can have a wide range of choice. We can say that economy is dictated by the wish and preference of the consumer. He is free to choose his goods and services. Profit Motive People are forced or induced to work and produce for getting more and more profits. It is the basic motivating force in a capitalist economy.

Competition Competition among sellers to sell their goods and among buyers to obtain goods to satisfy their wants. Advertisements, discount, price cutting, etc. Thus competition is another main feature in product market or factor market. They face it to excel. Inequalities of Incomes This economy creates the inequalities in the society as it contains two major classes of laborer and capitalist. Wide gap of income between the rich and the poor is created and thus results in conflicts. Unequal distribution of property is also observed in this economy.

Economic Freedom: There is no interference in economic matters. Every individual is free to take the decisions regarding the economic activities undertaken by them thus there is freedom in the economic field keeping in view the self interest of individuals. Efficient Use of Resources: In a competitive market only those producers can survive who can produce maximum with minimum cost and uses resources efficiently and economically. Thus the wastage of resources will be reduced and all this will give rise to better and efficient and maximum utilization of resources. Flexibility and automatic equilibrium: This system can be changed according to the needs and circumstances of the economy. It has inbuilt flexibility. An automatic equilibrium is brought about by the operation of price mechanism and market forces.

Encourages development: It increases savings, investment and capital formation in the economy, encourages entrepreneurship and individual initiative and provides ample opportunities for technical progress. Diversification and increase in production: Every producer tries to earn as much as possible by increasing his output. To earn maximum profit, every producer tries to attract consumers by bringing newer commodities in the market.

Demerits of capitalism
Erosion of human values: in a capitalistic economy wealth enjoys the prestige in the society. Hence, to acquire more wealth, people generally disregard the human and moral values. Economic and social inequalities: In capitalistic system owners of the means of productions can earn more as compared to those who do not possess much means of productions. This brings wide inequalities in the distribution of income and wealth. Law of inheritance makes inequalities permanent.

Too much wastage : There is a large scale wastage of resources due to unnecessary competition. A commodity is produced by a number of producers and every one tries to sell as much as possible to earn the maximum creating the problem of over-production. Problem of unemployment: This system creates problem of unemployment also. Since laborers are not paid fully their purchasing power becomes low.

Socialism is the philosophy of the Government and economic system based on the belief in the worth of each individual. The basic philosophy of socialism is the provision of certain goods and services to all individuals in the nation.

Socialist economic system

A socialist economy is one in which material instruments of production are owned by a public authority and operated for the direct service of those whom the authority represents. Prof. Pigou The only essential feature of socialism is that instruments of production are not owned by individuals and that they should not be organized for the purpose of obtaining private profit. -Mr. & Mrs. Webb

Feature of socialism
Collective ownership Collective ownership of all means of production except small farms, workshops and trading firms which may remain in private hands. Profit motive and self interest are not driving force. Use of resources for socio-economic objectives Central authority -Central authority to set and accomplish socio-economic goals- so called Central Planned Economy. Major economic decision such as what to produce, when to produce, how to produce etc. are taken by the central authority

Limited range of choice -Consumers may not enjoy wide range of choice due to selective production. However, with that range an individual is free to choose what he likes most.

Equality of income -No competitive market- no interference of private capital -Govt. will be aware of distribution of income- so, will plan as per requirement- Balanced growth

Limited economic freedom -Public ownership and central economic planning - Freedom of consumption is limited - Freedom of occupation is also limited -Consumers may not enjoy a variety of choice due to selective production

Absence of profit motive -Resources are owned by the state and are utilized for the benefit of the society as a whole Relatively equal distribution of income Perfect equality of income is not possible. Private property & profit motive is absent. So, the very important source of inequality is removed. Wage differences are reduced. Equal opportunities of education, training and skill formation are made available to individual

Reduction in economic and social inequalities: All people get income for their labour as salary or wages. Wage structure is designed so that there are no wide inequalities in it. Rapid economic development: It is said through planning system socialistic economy provides better opportunity for rapid development. Proper allocation of resources: The resources in different lines of production are allocated by the central authority keeping in view public interests are the best possible use of all.

End of exploitation: Since socialistic economy does not have social difference so there is no exploitation. Everybody gets his due share in the national product. End of unemployment: Generally socialist economy provides the job to each and every members of the society.

Demerits of Socialism
Centralization of economic and political powers in state: In socialistic economy state becomes powerful. It commands not only potential power but also the economic power. Lack of incentives and initiatives: One of the most important drawback of the socialistic system is the lack of incentives and initiatives in the country. Since, there is no right to have property, people are not motivated for work and savings.

Reduction of efficiency and production: In this system all economic affairs are managed by government servants . These salaried persons are more interested in their salaries than the productivity.

Mixed economy is the outcome of the compromise between two opposite ideologies- Capitalism & Socialism i.e. Individualism & Collectivism It tries to achieve the advantages of both the systems and to remove the defects of both the systems. It allows both private sectors and public sectors.

Co-Existence of Both- Private and Public Enterprise

A) Private Sector: Production and distribution are managed and controlled by private individuals and groups. Base is self- interest and profit motive System of private property exists Govt. control is direct or indirect by policy instruments B) Public Sector: Industries are not primarily profit oriented- but set up by the state for the welfare of the society/community. Heavy and basic industries- Ex: Iron-steel, production of defense equipments (atomic energy), transport and communication C) Combined Sector: Both the govt. and private enterprise join hands to produce a commodity.

Planned Economy:

Govt. has a clear and definite economic plan to bring co-operation and co-ordination between the two sectors. Public sector- direct planning; Private sectorregulations and guidance through indirect measures like economic policy, EXIM policy,

Price system:

Public sector- economic decision relating to investment, production, employment, etc. are taken by planning commission. Private sector- by entrepreneurs with the objective of profit but price system is not allowed to function freely. The govt. regulates price system to protect social interest. Ex: In India, price of cement, iron-steel, scooters, papers, agricultural products, sugar, wheat, kerosene-are controlled.

Balanced regional development:

Public sector enterprises may be located in the backward regions so as to ensure its development.

Merits of Mixed Economy

It is a system in which both the system work together. A rapid economic growth takes placed in this system of economy. Both private sector and public sector work for the welfare of people.

In such a system both the sectors have a good competition in the process of increasing production.

Demerits of Mixed Economy It is always short-lived because the process of socialization is limited.

There is lack of freedom to private sector. Government tries to put control over the functioning of free enterprise by means of license and other checks. The compromise of the system theoretically seems correct but in practice it does not prove to be a healthy one.

Profession is the systematized body of knowledge, which is studied in specialized institutions and practiced in the real situation of life.- L stanton Profession is an occupation for which specialized knowledge, skills and training are required and the use of these skills is not meant for self-satisfaction but these are used for larger interest of the society and the success of these skills is measured not in terms of money alone. -L.M.Prasad

Characteristics of Profession
Service to Society: Identified Area: Association: Own applied knowledge: Social Accountability: Special Training: Public Trust: Life time Commitment:

When the person works under an agreement or rules or contract of service and performs the work allotted to him by the employer (who gives job or service) and will be paid for it at regular interval is called employment.

Characteristics of Employment
Work: Qualification: Investment: Risk Factor: Return: Responsibility:

Thus since than vocation means the use of inbuilt talent and skill used by the individuals for earning their livelihood is the last extension to the meaning of vocation.