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BUSINESS & INDUSTRY

MODULE 2
WHAT IS BUSINESS

Business denotes busi-ness, that is the state of


being busy any activity in which one keeps
himself busy.
But the economic term of business refers to work,
efforts, and acts of people or human busy in
connection with the production of wealth.
Business is the sum of total activities which are
connected with the production or purchase and
sale of goods and services with the
main objective to earn profit.
NATURE OF BUSINESS

Definitions of Business
According to Urwick and Hunt, Business is any
enterprise which makes, distributes or provides any
service which other members of the community need
and are willing to pay for it.
Nature of Business
Man always wants and wants more.
Insatiable innumerous wants.
For satisfying his wants he works and works harder
so as to make use of scarce resources available.
Making use of scarce resources to the best advantage
for the satisfaction of human wants is termed as
economic activity.
NATURE OF BUSINESS
Economic activities, thus deal with the activities
of living and making a living.
For this purpose everyone of us follow an
occupation according to our inkling, capacity,
knowledge and training.
One therefore, may either follow a profession
(rendering specialized expert and personal
service), or seek employment (under taking to
work for others according to terms and conditions
set for the purpose), or set up a business
engaging in production of wealth.
CHARACTERISTICS OF BUSINESS

1. Production or Acquisition of Goods


Every business whether small or large scale
deals with goods and services. The goods may
produce, manufacture or procure.
2. Profit The basic motive of business
Profit is an essential part of business,
infact profit is the motivation factor behind a
business one carries on. The efficiency of a
businessman depends on the profit which he is able
to make during the business operation. He renders
singular service to the continuity by satisfying the
needs of the people.
CHARACTERISTICS OF BUSINESS
3. Risk Uncertainty of future
Every business involves risk and uncertainty
while carrying on its operations. Future is
uncertain and business activity focuses on future.

4. Dealing in Goods and Services


Business refers to goods and services dealt
with a view to supply to those who need them and
are ready to make payment for the same.
CHARACTERISTICS OF BUSINESS
5. Regular Dealings
One of important characteristics of business
is regularity and recurrences. Business is not a
single operation.
FUNCTIONS OF BUSINESS
Production function
Marketing function

Finance function

Human Resource function

Management Information function

Innovation function (R&D)


INDUSTRY
Economic activity concerned with the processing
of raw materials and manufacture of goods in
factories.
An industry is a classification that refers to
groups of companies that are related based on
their primary business activities Three Types
Primary Sector
Secondary Sector
Tertiary Sector
IMPORTANCE OF INDUSTRY
Attracts huge investments
Industries play an important role in the economic
development of any nation .
Creates lot of employment

Promotes agriculture development

Contributes to tertiary sector

Maintains proper balance among sectors

Helps in growth and expansion of market

Helps in better utilization of natural resources

Helps to increase purchase parity of people

Helps to protect country


INTERNAL & EXTERNAL INFLUENCES
Internal influences are influences that a
business has some control over, such
influences include product, location,
management, resource management and
business culture
These influences affect a large majority of
the internal structures and operations of a
business.
Depending on the types of goods and
services the business produces will
depend on the internal structure.
INTERNAL & EXTERNAL INFLUENCES
Location influences:
One of the most important factors of a
business is the location in which that
business is positioned in. The location can
either make or break the business.
Location is especially important for retail
and service oriented businesses, as they
need to be seen and recognized by
customers. The business owner must take
into consideration of where he/she chooses
to locate their business
INTERNAL & EXTERNAL INFLUENCES
Resource influences:
-Basically there are 4 main types of
resources available to a business, these
include:
Human resources

Information Resources

Physical resources

Financial resources
EXTERNAL INFLUENCES

Economical influences
Financial influences

Geographical influences

Social influences

Legal influences

Political influences

Government
INTERNAL & EXTERNAL INFLUENCES
DIFFERENT FORMS OF ENTERPRISES
Sole Proprietorship
Joint Hindu Family Business
Partnership Firm
Joint Stock company

Private Limited
Public Limited
Co-operative society
ORGANIZATION STRUCTURE
Line organization
Functional organization

Line and Staff organization

Project organization

Matrix organization

ymuralidharreddy@gmail.com 12/11/2017
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Governments Role in Influencing
Business
1. Prescribes the rules of the game for business.
2. Purchases business products and services.
3. Uses it contracting power to get business to
do things it wants.
4. Is a major promoter and subsidizer of
business.
5. Is the owner of vast quantities of productive
equipment and wealth.

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Governments Role in Influencing
Business
6. Is an architect of economic growth.
7. Is a financier.
8. Is the protector of various interests in society
against business exploitation.
9. Directly manages large areas of private business.
10. Is the repository of the social conscience and
redistributes resources to meet social objectives

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Roles of Government and Business
Clash of Ethical Systems
Business Beliefs Government Beliefs
Maximizes concession to Subordinated individual goals
self-interest and self-interest to group goals
Minimizes the load of and group interests
obligations society imposes Maximized obligations
on the individual (personal assumed by the individual and
freedom) discouraging self-interest
Emphasizes inequalities of Emphasized equality of
individuals individuals

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Roles of Government and Business

Social, Technological, and Value


Change
National society
Communal society
Entitlements
Quality of life

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Interaction of Business,
Government, and the Public
Lobbying

Regulations
Business and Government
Other Forms
of Political Process
Persuasion Voting
Advertising Interest Groups
Public Relations Contributions

Public

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TYPES OF PRODUCTIVE SYSTEMS
Productive system is the one which products in
the organization
TYPES

Job Shop Production

Batch production system

Mass production system

Continuous production system


THE MANORIAL OR FEUDAL SYSTEM
Landlord and Peasant: 9th 15th Century

The Manorial Court: 9th 15th Century

Farming the manor: 9th 18th Century

Strip-Farming and Enclosure: 9th 20th Century

Landlord, Tenant and Labourer: 13th Century


GUILD SYSTEM
Varna System
Evolution of Guild
Pre Mouryan Period (600 t0 320 B.C.)
Mouryan Period (320 t0 200 B.C.)
Post Mouryan Period (200 t0 300 A.D.)
Gupta Period (300-600 A.D.)
Early Medieval Period (600-1200 A.D.)

The Domestic/ Putting out/ Out sourcing System


and the Factory System
INDUSTRIALIZATION

Need for Industrialization


Causes
Building Economic Infrastructure
Impart Elasticity in the system
Agriculture development
Growth & Diversification
Security for the Nation
ROLE OF INDUSTRIALIZATION IN THE
INDIAN ECONOMY
Meeting high Income demands
Overcoming deterioration in the terms of trade

Increase Income

Changing the structure of the Economy

Employment generation

Ensure technological progress


CONSEQUENCES OF INDUSTRIALIZATION
Law and Enforcement
Pollution

Overcrowding

Working conditions
IT INDUSTRY IN INDIA
BPO
IT & ITES

Challenges Faced by IT Sector in India


Change from old model (ADM(Application
development model) to Outcome based billing.
Setup near shore centers
Increase skill set
Talent pool
Develop tier 2 and 3 centers
Focus on emerging trends
Revamp the thinking and working style
IT ENABLED SERVICES
BPO
Electronic publishing

Medical Transcription

Data Centers

GIS Mapping

Portals

ERP

Knowledge Management

KPO, LPO
IT & MANUFACTURING
Operational Excellence Six Sigma
ERP

Digital & 3D Printing

Automation of Machineries

CAD & CAM for design

Recruitment

MM, SD and CRM


IT & AGRICULTURE
Remote sensing
Geographical information system

Agronomy and soil sciences

E- Agriculture

E- Mandi

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