Introduction to Business Organisation Manish Kumar Manish kumariamr

Introduction to Business Organisation Manish Kumar Manish. kumar@iamr. ac. in

§ “Any organisation that fulfils itself through making a product or service is business. ” P. F. Drucker Business § “It is an institution organized and operated to provide goods and services to society under the incentive of private gain” B. O. Wheeler

§ Business is a social institutions § Dealings in goods and services § Sale, transfer or exchange § Regularity in dealings § Promoter/owner/entrepreneur Features of Business § Organisation and management § Capital, investment and finance § Risk taking § Forecasting § Surplus generation § Generation of values and utilities

§ Business plan Essentials of successful business § Measuring goals § Networking § Team of dedicated employees § Education and training § Tools and equipment

Scope of Business § The scope of business is very wide. It includes a large number of activities which may be classified under two broad categories , namely, Industry and Commerce.

Organic Human Objectives of business National Economic Social

§ A business enterprise consists of people organised to Organic Objective conduct business activity to meet and satisfy the needs of society. It is essentially an organic entity which has its own infancy, childhood, adulthood, and maturity. § The first concern of a business enterprise is to ensure its own survival for the continuance of business activity.

Participation Human Objectives Development of human resources Fair deal to employees Job Satisfaction

National Objectives Ensuring Social Justice Development of small entrepreneurs Production according to national priorities National Self. Sufficiency and Export Development of skilled personnel

Innovation Economic objective Creation of customers Earning of profit Best use of scarce resources

Social objective Supply of desired quality of products Avoidance of anti social and unfair trade practices Generation of employment Welfare of employees Avoidance of slums and pollution

Industry Classification of business activities Commerce Trade

Trade Internal or home trade External or foreign trade

§ Trade § Auxiliaries to trade § Middlemen Commerce § Transport and Communication § Warehousing § Insurance § Finance § Advertsing

Tertiary Industry Secondary Primary

Primary Industries Extractive Industries Genetic Industries

Construction Industries Manufacturing Industries Assembly line Secondary Industries Processing Steel Cement Lime Mortar Synthetic Buildings , Dams Bridges Analytical

§ Production of goods Benefits of business § Business supplies services § Creation of customers § Business has helped raising standard of living § Creation of customers

Business Organization

Introduction § Business organization is an economic arrangement of person where all efforts are directed to achieve a common economic goal.

§ Adequacy of capital § Flexibility of operation § Business secrecy Characteristics of Business Organization § Ownership management and control § Minimum government regulations § Limit of liability § Ease in formation § Tax consideration § Bargaining power

§ Aiming towards consumers satisfaction § Shouldering responsibility § Creation of employment opportunity Objectives of Business Organization § Welfare to employment § Optimum utilization of country’s natural resources § Maximum return on investment § Social welfare § National objective § Maintaining business ethics § Maintaining law and order.

§ Evolution of objective § Formulation of plan Setting up a business organization § Suitable location, layout and volume of business § Appropriate organization and management § Optimum financing § Trouble free production and distribution system § Risk bearing and sustaining capacity § Expansion and growth orientation

§ Distribution § Feedback § Finance management § Fixing of responsibilities Importance of business organization § Minimum cost § Minimum wastage § Product growth § Quick decision § Recognition problems § Reduces the cost § Skilled salesmen § Transportation

Modern business Old concept of business Modern concept of business

§ Business may be defined as human activity directed Old Concept towards producing or acquiring wealth through buying or selling goods. § Business may be defined as an activity in which different persons exchange something value, whether goods or services for mutual gains or profits

Modern concept of business § Business means the whole of complex of commerce and industry-the basic industries and the network of ancillary industries , banking, insurance , transport and so on.

§ Production and supply of quality goods and services § Contribution to the general welfare of the society § Social and psychological satisfaction of employees Changing objectives of modern business § Well-being of socially and economically backward § Promotion of social justice § Contribute to the revenue of the country § Adoption of fair trade practices § Development of human resources § Creation of employment § Self-sufficiency and export promotion

§ Foreign direct investment § Customization § Social media § E-business Trends in modern business § Business process outsourcing § Trade in agricultural and manufacturing goods § Containerized cargo § Cloud comp § Business combination § Green marketing § Corporate social responsibility

Business and profession BASIS FOR COMPARISON BUSINESS PROFESSION Meaning Business is an economic activity concerned with the production or purchase and sale of merchandise and rendering of services with the purpose of earning profit. Profession is a form of economic activities, wherein special skills, knowledge and expertise is required to be applied by the person, in his occupation. Basic objective Earning profit Rendering services Establishment Membership of the On the decision of respective professional entrepreneur and fulfillment body and certificate of of legal formalities. practice. Qualification No minimum qualification. Specialized knowledge of study is required. Capital Required as per the size and nature of business. Limited capital is required. Reward Profit Professional fee Code of conduct No prescribed code of conduct. Code of conduct prescribed by the professional bodies needs to be followed. Advertisement is prohibited Products and services are as per professional code of advertised to increase sales. conduct.