m
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Business
Business : Emergence of business with exchange activities from Barter Economy
Stage ---ps a part of economic evolution process.

Hunting Stage,

Barter Stage,

Business (Historical Stage) Village Economy Stage,

Town Economy Stage,

National & International

Economy Stage.

›

  



› 
 ͞What keeps one busy or concerns one, one͛s occupation or affairs,
one͛s province or duty, commercial firm or its position or interests.͟

s Commercial activity: ͞Exchange activity for a specific purpose i.e. earning

profit.͟

͞Business is an activity which involves exchange of goods and services with the
assistance of various support activities like Banking, Transport, Insurance,
operation of middleman, for a consideration,  
 


  activity that is supportive as above is also business. Business in each &

every sector of human activity. Spending by an individual becomes earnings of
receiving party. Hence, business operations are seen in. 

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Hence as commercial activity͙..

͞ person or a group of persons engaged in Trade, Service, Mercantile,

Commercial or Undertaking for profit ͞
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! )**: Profit Making

)  : s a social function through customer satisfaction and then profit.

    
* 

͞Business is considered as a Social Institution, performing a social mission and

having broad influence on the way people live & work together.͟

David & Blom Storm.

͞It is now recognized that the direction of business is important to the public
welfare, that business perform a social function.͟

Calkins (͞Problem of business education.͟)

The regular production or purchase and sale of goods, undertaken with the
motive of making profit and acquiring wealth through the satisfaction of human
wants.

The development and processing of economic values in society.

Private sector : Sales of goods and services for a consideration.

Business by

Public sector : Promotional role and invest in communication &

various other infrastructural activities. Invest in basic and heavy industries.

BSNL, VSNL, BHEL, HL, HMT, BEML, ITI. They are basically services run by
Government to develop the economy. When they sell the goods and services for a
price, they also compete with private sector for improvement in quality &
lowering the process for the benefit of society in general.

In Broad sense.

Business a Term

Sub System of Total social system.

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Man is a social animal Inter dependent of each Other for survival

Kshatriyas Brahmins Vaishyas Kshudras

͞Business as the organized efforts of enterprises to supply goods & services for a
profit.͟

Business is meant for consumers/ customers who come from society in general.
Hence, business is for society and society is for business. But society follows some
norms, ethics, cultural and other harmless aspects that are meant for the welfare
of the society. Hence the business has also to follow these norms of the society.
That is why business cannot think of an independent entity without society.
Hence business units perform and function as per the directions of the Society.

This is the very basic nature of the business in the society. When the business is
performed or governed by societal norms it means we have to follow all society
norms , ethics. Culture & other aspects of the society. ny business cannot afford
to violate the norms/ ethics set by the society otherwise it will be fatal/suicidal
death for the society.

Further modern business necessitates a sense of  
* for proper
growth & development of the business, of the organizations & business
operations.

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-

Business ethics are the key factors for success in a business & the
organization. Hence business should follow/conduct itself according to
certain self recognized moral standards. ll present big business houses and
their success prove a testimony of their existence for over 100-150 years
because they have given & have been following ethics & values. For
example Tata Group, Birla Group, Bajaj, Singhanias & General Electric. (GE)
** the personnel involved in business process ensure that the business
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decisions taken by them are within business ethics & moral standards so
that it does not produce negative results.

. *
/ 

͞Culture of a civilization is that complex whole which includes knowledge,
belief, art, morals, law, custom & other capabilities and habits acquired by
a man as a member of the society.͟ E.B.Taylor

  of business and knowledge, belief, art, morals, law, customs &

other capabilities and habits which a man has acquired from his family are
the basic vital elements of social behavior which are seen in the business.
Culture is a complex factor. The culture, cultural traits, complexities and
systems differ from society to society, community to community and hence
business to business.

0 talking of global business & MNCs , they have to follow and observe
multi culture because they have to adjust themselves according to specific
cultural traits prevailing in a particular country. Hence culture is imbibed in
the nature of business.

1  
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Earlier traditional business was carried on by family & their generations in
the absence of any professional background by Marwadis, Chettiars,
Reddy͛s or Kamaths. Only professionalism was the training/experience
gained under senior members. While business has grown manifold from
proprietorship to partnership, private limited co. to public limited co.
increased management education has contributed a lot for the growing
professionalism in business.

 
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u Specialized knowledge & skill for management
u uthority & freedom to take right decision
u Ideological bias in discharge of functions
u Following ethical aspects in decision making in business activities.

It is rightly said that professionalism is the true nature of business.

Following family owned business companies have brought in professional
management in their business for better results, efficiency & effectiveness.
) Ranbaxy B) Dabur C) Tatas D) Birlas E) aditya Group & Bajaj Group.

Further Professional Education Institutions like IIMs & other

institutions have contributed for a high professionals͛ involvements in the
business.

4.  › *

/

ttracting and delighting the customer is the true character of business.

Rather modern approach of business of marketing/ business keeps the
customer in high esteem and hence regarded as a king. Today͛s customer
has become very clever and intelligent. He knows very well the value of his
money. He has become a highly quality conscious creature. While he wants
the best quality, he does not want to pay a single paisa more for the same.

!"2 3" !"#&!# &(&#&&


Nature of Business : Nature means what it does. Hence answer to question
what business does is nature of business. It involves several internal as well
as external factors.
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Traditionally business was carried on in sheltered markets with high

cost, low productivity/quality leading to inefficiency and effectiveness.

Presently globalization has changed the set-up of

business, meaning of business and the very nature of business. Today͛s
businessman has got stuck up between the necessities & compulsions of
present day business and its environment. s also the practices that
were followed in old business i.e. Proprietorship--> Partnership-->Joint
Venture-->Private Limited-->Public Limited.

Secondly he is placed in new business environment

where there is a fierce competition that also from within & foreign
business companies.

Competent, qualified, financially sound with sound

marketing set up survive and inefficient incompetent are shown the
door. Hence he should adopt & adept himself to this changing scenario
for his/her company͛ s survival.

u Rigid hierarchical & tall structures p Flexible, flat & team building
structures.
u Family centric, close minded with secretive environment p
Dispersed ownership, open minded and transparent environment.
u Caste ridden, superstitious, laid back styles of management p
rational thinking + vibrant styles of management.

Hence business needs transformation, transitional, adoptive & adaptive as

nature of business.
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Indian business man is not only facing, competition from within but also
from foreign companies. Competition, while it is good for the customers
it is not liked by business community in general. Previously due to
monopolistic advantages, they used to exploit consumers/customers.

rtificial for otherwise scarcities, high prices & low quality were
prevailing. Long waiting lists in phone connections, scooters, cooking gas
connections, uncooperative & un- businessman like behavior by
businessmen at all levels in all sectors, consumers/customers felt
harassed & cheated. Today customer has a varied choice. ͞Customer is a
King ͞slogan is being practiced in real sense.

u LIC ---> consumer friendly approach due to Max life, ICICI Prudential,
Bajaj life, etc.
u IC/ IR INDI ---> Officials became polite and well behaved due to
competition from Jet irways, King Fisher, Indigo, Spice Jet, Go ir.
u Scheduled Banks ---> Became highly service oriented in customer
handling. More facilities with TM, E-banking due to completion
from Grindlays Bank, ICICI, HDFC, etc. HSBC ʹ ͞The world s local
bank.͟ .
u Local transport buses--->High Tech Buses viz., Volvo with more
facilities. Govt. also passed legislations keeping in view consumer
welfare activities viz., MRPs, net weight, composition, date of
manufacture/expiry, etc.
u ::- New ways of business operations
::- Build new capabilities

Competition promises ::- New standards for customer satisfaction

::- Business leaders become pro active

::- High quality, low price to consumers
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u Retail marketing ---> Metro , Mark & Spencer͛s ,Shoppers Stop,

Central Mall, Big Bazaar, Fab Mall have improved in customer
satisfaction from 4Ps point of view.
u Credit card, Banking Business ---> With modern and new facilities.

14 !  ) +#  (55   :


India, being a developing economy, is emerging to be a potentially
strong country promising tremendous & immense opportunities
because of its sizable middle class opening themselves into meeting
social & status needs, because of higher GDP growth rate, higher per
capita income, higher standard of living, etc.
New names/styles of business:::
u BPO
u KPO
u Call Centers
u Information Technology
u Wealth Management
u Private Banking
Following traditional sector has tremendous business potential and has
rather become focus of attention & attraction for foreign companies.
4 #)  


Promises a globally competitive manufacturing & sourcing in India
for international marketers.

4 ›  & 


uto & ncillaries, Chemicals and Pharmaceuticals, Textiles,
Refining, Cement, Metals, etc. Factories in these sectors are doing
exceedingly well. nd their output being exported to many
countries where there is a huge demand. Secondly car
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manufacturing factories in India are regarded as   3  for

MNCs. It is not only catering to Indian market but also suits as a
hub for exporting to neighboring countries. BB, an MNC has an
eye on India to develop as a Global Sourcing Base for most of its
products.

4 (  

 


#t was the FIRST WVE that gave India as manufacturing and out
sourcing valued at US $ 480 bn. For manufacturing low technology
products viz. toys and garments. McKINSEY ND CO., in their
report titled, Made in India, have forecasted that a Second Wave
valued at US$ 1.6 trillion is likely to benefit India and China for
high technology sector products like utomotives, Engineering &
Chemicals. Hence India has great potential to emerge as the
second largest global manufacturing base after China. Further
China is loosing ground on qualitative competitiveness in
international market. On the other hand India has a bright future.

&*
  *

- !6 * ))Highest yield of steel 

Plates in sian operations of Toyota.
.  )& 5 ) !5 among all fords
plants throughout the world, for its production and efficiency.
Exporting engines & plants to South frica among others.
1    world class plant.
7 ! #) World class plant.
8 !& *Lowest cost manufacturerof steel in 
the world.
9 :)*& *Stainless Steel was awarded a contract
to supply Coin Blanks by Monnaire De Paris--> French National
mint --- > 7.5 bn. Euro coins.
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In commodity business, L.N. Mittal in Steel, mbani Groups in

Polyester & KM Birla group in Viscose Fibre, Bharat Forge in Forgings
are some of Indian companies gained popularity in international
market.

Low cost Leadership


High cost Leadership

They are world class leaders on the basis of

Superior Speed Leadership

Global Outlook

Such Indian companies have pushed out traditional centers of

manufacturing on the basis of low cost production competitiveness.

74 $,(,#&!#(


Expansion, growth or development in business is the real good financial
health of a country/company. When a company starts internationalizing
its business operations, it speaks volume about its
productions/marketing capacities & capabilities. Hence GOING
INTERNTIONL/INTERNTIONLIZING BUSINESS IS NOTHER TREND/
PECULIR CHRCTERISTICS OF MODERN BUSINESS. In other words
modern business necessitates globalization.

* !  
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u Technological Innovations
u Removal of Trade Barriers
u Foreign Direct Investment
u Information Explosion
u Infusing of market competition 
u Economic growth and changing Life Styles
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u ccelerated growth of infrastructural facilities & logistics & such

others facilities
u Demand for new products & services
u dvanced shipment & transportation facilities

Further for business operations there are

a) No political boundaries;

b) High consideration of setting up production facilities anywhere
c) Markets world over where suitable & potential markets exist for
selling through a network.

part from above considerations following factors play an important

role

a) Supportive & imaginative Economic & Trade Policies for both
domestics & external trade by respective Govts.;
b) ccessibility to technological innovations;
c) Product design;
d) Higher quality;
e) Low cost & pricing;
f) Effective marketing strategies &
g) Infrastructural development

True indicators of International Market operations.

84 ! *

Technology is the backbone of a business.

Maker of business (on one hand )

Technology also seen as

Breaker of business (on the other)

Hence business is characterized by increasing application & use of
technology.
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u Manner in which production function organized;

u Manner in which products are marketed;
u Manner in which finance operations are carried;
u Manner in which managers & their subordinates communicate
with others & operations;
u Manner in which transportation, ships, air cargoes are handled.

94 #
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Success in business depends upon accurate , effective & timely
information and its proper communication between concerned parties
involved in business. Hence the recognition of information, importance
and need for information are the characteristics of the business. n
effective business depends upon
u Retrieving and extending information;
u Data processing;
u Information systems analysis;
u Preparation of effective records & reports 

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While modern business has become more & more complicated,

information & communication have made ii easy & simple. Earlier much
of a paper work was involved. But today computer and its network have
proved a boon for the businessman community and made it feasible to
have an access to quick and accurate collection of data across the world
for processing distribution & taking right & correct/ timely decisions.

&( #,"&(&##,#!<($!+!3# &

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 /͞Management responsiveness to public
consensus. ͞ dolf Berle
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² social responsibility we mean the intelligent and objective concern

for the welfare of society that restrains individuals and corporate
behavior from ultimately destructive activities. No matter how
immediately profitable and leads in the directions of positive direction
to human betterment variously as the later may be defined ͞

 
) 

͞Social responsibility refers to the businessman decisions and actions

taken for reasons at least partially beyond the firms direct economic or
technical interest. ͞ Keith Davis.

Man is a social animal. Individuals form groups called society. Hence

individuals are meant for society & a society is meant for welfare of
individuals.

& ((&#&&

Scope of business in today s marketing environment is vast.

Behind purchase of a product/item there are efforts of thousands of
people which we cannot imagine.

Behind purchase of a car following activities/services are

involved͙͙͙͙͙͙

a) Supplier of raw materials i.e. iron and steel, rubber etc.;
b) Manufacturers ---> Converted raw materials into finished
products;
c) Dealer ---> Makes these cars available at places where they are
required;
d) Transporter ---> Provides transportation facilities /services to
make these cars at godowns/ showroom i.e. manufacturing plant
to markets including raw materials components & parts finished
products ( cars ) to place of sale.
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e) Bankers --->Involved in financing the investment/ purchases at all

levels;
f) Sales Promotion gencies ( dvertising etc.)---> Help in creating
consumer awareness in selling of products & services.
g) Insurance Companies /gencies ---> Provide insurance risk covers.

#5 

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 )  % %   %
   % 5 +  

  

.4 Besides consumers/customers and manufacturers are placed at

considerable distances having no means of directly contacting producers
& suppliers. Hence whole of worlds economy, from trade & commerce
point of view, has achieved an all important crucial & tremendous role
to play.

14 Human life is neither static nor stationary. Rather it is dynamic. Life is
evolutionary & needs change at all times & at all places. 3  
 * )  5
 5 5 

74 Joint efforts of Commerce & Industry has made our lives more
sophisticated, comfortable & convenient by providing us necessities of
life.

84Products which were seen as luxuries yesterday have become vital &
necessities of today. Human needs & wants, on one hand, are unlimited
and resources/ sources or means to satisfy them are limited with ever
rising standards of living.

94Needs for business arising on the basis of͙͙.

u Diversity of natural resources & uneven distribution all over the
earth.
u The complex variety of human tastes & preferences
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u Division of labour in view of above situations. Hence business is

possible as medium of exchange as also a gainful employment
opportunities.

¬4 Each & every business has to be done as per Laws of the Land, Rules &
Regulations, ethics, culture etc. Hence business environment covers
laws & legal provisions viz.:
Company͛s ct, MRTP ct,
Minimum Wages ct,
Factories ct,
Workers Wages & Compensation ct,
Cooperative Societies ct,
Consumer Protection ct,
Foreign Exchange Management ct,
Export Import Policy (Foreign Trade Policy),
Industrial Policy,
Economic Policy,
Fiscal Policy, etc.

Business is people, people is business. In other words people occupy a

Central Place around whom by whom & for whom business is operated/
run. It also revolves around customers/consumers, competition and
professionalism.

Hence scope of business or activities of business can be classified into

activities that are related to͙͙.
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In view of foregoing activities as above, business activities are grouped

into two major divisions

Industry ---> Related to manufacturing

Commerce ---> Related to buying & selling, Trading etc.

#›&!"<::

Industry means that part of business that makes or manufactures foods.

Dictionary meaning --- > Diligence habitual employment in useful work.

It is a branch of trade or manufacturing activity of a specific type of
goods or services for a consideration i.e. profit.

In broad sense identical business activity taken up by a

number of individual firms, is collectively called an INDUSTRY. Viz.
utomobile Industry, Tata Motors, Maruti Suzuki, mbassador, Fiat, etc.

Television Industry: Samsung, Sony, LG, Onida, etc.

Consumer Goods Industry : Soap, Toothpaste, Cloth, Cosmetics, etc.

Hotel Industry : Welcome Group Hotels, Taj Group Hotels. Leela Group
Hotels, etc.