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Every business
Every business must enterprise must aim
earn a reasonable at greater
profit to survive and productivity to
grow. ensure continuous
survival and growth.
Profession
Employment
Economic activities
Religious
Social
Activities
Parental
Human activities
Non Economic
Patriotic
When a teacher is
teaching in a
school and gets
salary, it is an
economic activity
but when a teacher
is teaching her
son/daughter at
home, then it is a
non-economic
activity.
Comparison of business, profession and
employment.
Profession
• Accounting(C.A)
• doctor
Business Employment
• Farming • Workers
• banking • employees
Economic
activities
Differentiation between economic and non-economic
activities.
Purpose/Moti These activities are under taken to earn These activities are
ve/Expectatio money and to create wealth. undertaken to satisfy social,
n. psychological and emotional
needs.
Business should
generate
Large business units Social employment
opportunities to the
should undertake
community services objectives disadvantaged
sections of the
like setting up society(e.g.
charitable physically
dispensaries, handicapped
schools etc. people).
Welfare of
employees
Business should provide good working conditions and
pay satisfactory wages/salaries to its employees.
• Business provides jobs to the
population who in turn are able
to buy goods and services.
Businesses pay taxes, that
finance government spending for
infrastructures and operations.
Goods produced and services
rendered satisfy the needs of
consumers.
• Business introduce new
products and innovations that
improve the standards of living.
Economic competition drives
business to act socially desirable
manner. Many exercise
corporate social responsibility,
also referred to as service
beyond profit.
Comparison of business, profession and
employment.
Profession
• Accounting(C.A)
• doctor
Business Employment
• Farming • Workers
• banking • employees
Economic
activities
The Role of Business in Society
•Only business can create prosperity
•Healthy businesses need a healthy
• community
The Role of a Company in Its
Communities
Evolving Approaches
Source of income for Source of funds for business
businessmen growth
• As a source of income for the • Profits can be a source of finance for
businessmen, profit provide the meeting growth and expansion
means of livelihood for them. requirements of business.
Role of profit
in business
Index of performance Reward of risk taking
• Profits indicate whether a business is • It is in the hope of earning sufficient
being managed efficiently or not. It is profits that a businessman invests
a measure of performance and money in business and undertakes
success of a business. risks. profit is essential for covering
costs and risks of the business.
industry
Secondary Tertiary
primary
industry industry
Extractive Genetic
Cattle
Poultry
Farming Mining Fishing breeding
farms
pisciculture
farms
Secondary
industry
Manufacturing Construction
industry industries
An oil refinery
Cement, soaps, TV, car,
separates crude Sugar,
oil into kerosene, plastics, paints, computer,
diesel, petrol. fertilizers etc. paper watches etc.
commerce
Auxiliaries to
trade trade
Wholesale trade refers to Retail trade refers to If goods are If goods and Where goods are
buying and selling of goods buying of goods and purchased from services are sold to imported for export
and services in large services in relatively
quantities for the purpose small quantities; and
another country, it other countries, it to other countries,
of resale or intermediate selling them to ultimate is called import is called export it is called entrepot
use. consumers. trade. trade. trade.
Auxiliaries to trade
Transport and Banking and Warehousing Advertising
communication finance • It refers to the • Advertising brings
• Transport(road,rail or • Business needs funds holding and goods and services to
coastal) facilitates for acquiring assets, preservation of goods the knowledge of
movement of –raw until they are finally prospective buyers.
purchasing raw
materials to the place materials and consumed. • With the help of such
of production,and –the • It helps business knowledge, consumers
meeting day-to-day
finished goods from can obtain better value
expenses. firms to overcome
factories to the place of for their money
consumption • Necessary funds can the problem of
be obtained by storage of goods and • Thus, advertising helps
• Communication to promote the sale of
businessmen from facilitates the
facilities like postal products like electronic
services and telephone commercial banks. availability of goods goods, automobiles,
facilities enable • Thus banking helps when needed. soaps etc by providing
businessmen to business activities • Warehousing creates information about
exchange information overcome the time utility. them.
with one another. problem of finance.
Answer the following not less than 5
sentences each item
1. Discuss purpose and importance of
the business
2. Compare economic and non-
economic activities of business