THE BUSINESS:

ITS NATURE AND SCOPE

Chapter line-up:
• Meaning
• Characteristics
• Objectives
• Requisites of a successful business
• Scope of business
• Types of industry
• Brief about commerce
• Difference between business and profession.
MEANING OF BUSINESS:
The etymology of "business" relates to the state of being busy either as an
individual or society as a whole, that which engages the time, attention,
or labour of any one, as his principal concern or interest, whether for a
longer or shorter time; constant employment; regular occupation; as,
the business of life; business before pleasure.
DEFINITION OF BUSINESS:

According to Prof.Own, “ Business is any enterprise engaged in production and

distribution of goods and services for sale in a market or rendering services for
a price.”
In the words of Peterson and Plowman, “A single isolated transaction of sale and
purchase alone will not constitute business. Recurring or repeated transactions
of sale and purchase alone mean business.”
CHARACTERISTICS OF BUSINESS:
• Sale or transfer of goods for value:
One of the basic characteristics of business is sale or transfer of goods
and services for value.
Example: Man shaving his beard is not considered as business were as
if he sets up a salon and offers the same service to various
customers for a price is business.

• Dealing in goods and services:

Business implies dealing in either goods or services.
Example: goods include clothes, watches, tools, machinery, etc..
Services include transport service,
hospitality, web services etc..
• Recurrences of dealings:
An isolated or a single transaction cannot be called business.
Business involves constant and continuous transactions i.e,
buying and selling of goods and services.
Example: an old car sold cannot be called a business whereas
constant dealing in sales of second hand cars can
constitute business.

• Profit motive:
Profit is the main reason for formation of business units. It is the biggest and
powerful stimulus for running a business.
Example: clothes given away to orphans cannot be business, clothes sold for
a certain margin of profit is business.
• Risk involvement:
Business activities focus on future and future is unknown and uncertain.
Hence the level of risk in business is high and inevitable. Profit or returns
depend upon the degree of risk involved.
 OBJECTIVES OF BUSINESS

BUSINESS

SOCIAL
ECONOMIC
Quality goods
Satisfactory prices
Fair worker deal
Creation of
Fair return to
customers
Making innovation investors
Fair trade practices
Profit maximization
Fair deal to
Growth
suppliers
 REQUISITES OF A SUCCESSFUL BUSINESS:
• Clear objectives: determination of objectives is one
of the most essential prerequisites of business. The
objectives set forth have to be realistic and
achievable.

• Planning: a pre-determined course of action. The

accomplishment of objectives depends upon a the
plan to a great extent.

• Sound organization: organization of a business is

harmonious combination of men, machine,
material, money, management, etc. so all these
have to work together to achieve the goals and in
an effective manner.

• Research: it is a systematic search for new

knowledge. Research is needed to find out new
strategies, make plans, set goals and to organize
the business setup.
• Finance: is said to be the life blood of the business enterprise. It
brings together all the resources like labor, materials, machine and
combines them for production. It is the lubricating oil needed to
move the business wheel constantly.

• Proper plant location, layout and size: the success of the business
also lies upon is internal strength which is comprised of the land it
is located, size and its layout. Businessmen must take sufficient care
in the initial stages of selecting a good suitable location for his/her
business otherwise the business may flounder.

• Effective management: one of the reasons for failures of business

often attributed to as their poor management skills. The one man,
i.e, the proprietor may not be equally good in all the areas of his
business but should and must inculcate a good management talent.

• Harmonious relations with the employees: employees occupies a

distinct role in any business enterprise. They are the living resource
of the organization and hence a cordial and harmonious
relationship should be maintained in order to get the best out of
them.
 INDUSTRY

What is an industry?
Industry refers to the processes
of extraction and production
of goods meant for final
consumption or use by
another industry.
Goods used by the final
customers is called as
“consumer goods”.
Goods which are used by other
industries for further
production purpose is called
as “producer goods”.
 INDUSTRIES

EXTRACTIVE & CONSTRUCTION

GENETIC

MANUFACTURING
INDUSTRIES:
1.Analytical
2.Processing
3.Synthetic
4.Service
5.Assembly line
 EXTRACTIVE INDUSTRIES:
Industries which are concerned with the extraction
and utilization of natural resources from earth,
sea, and air. The products of these industries
are used for manufacturing and constructive
industries for their finished product production.

• Examples: fishing, mining, fruit gathering,

agriculture, afforestation and hunting.
 GENETIC INDUSTRIES:
• Genetic engineering, genetic modification (GM), and
gene splicing are terms for the process of
manipulating genes in an organism, usually outside
of the organism's normal reproductive process.
• Example: breeding plants, cattle breeding, fish
hatcheries, poultry farms.

• AstraZeneca, Amgen, GlaxoSmithKline (GSK),

• Biogen, Celltech Group, Genzyme.
 MANUFACTURING INDUSTRIES
• Engaged in the conversion of raw materials into semi
finished goods and into fully finished goods to meet
the purpose of selling the products and generating
revenues. They account for a large part of the total
business activities on the whole.

• Example: cotton textile, steel industries, detergent

manufacturers, furniture makers etc..
ANALYTICAL INDUSTRIES
• The basic product is analyzed and, in
turn many products are emerged from
one single product.
• Example: kerosene, petroleum, gas, diesel etc.
 PROCESSING INDUSTRY
• A product has to pass through several
processes before a final product is obtained.
The finished product of one process appears as
a raw material to the next process.
• South Dagon, Gold Roast Co., Ltd., Ko Ko Candy
Sweet, Rainbow Industry Ltd., Star Diamond
International Co., Ltd., Date International Co., Ltd.
 SYNTHETIC INDUSTRIES:

• Ingredients are brought together and are combined or

synthesized in the manufacturing process to produce a new
product.
• Example: yarn spinning, paint making and soap making industries.
• Arasan Group Of Companies, Nirma Limited, Sun Chemicals, GTN
Industries Limited, Krishtex
 SERVICE INDUSTRIES

• Industries concerned with rendering of services.

• Examples: hotels, railways, aero planes, shipping.
ASSEMBLY INDUSTRIES
• The finished products are produced by
assembling various parts or components bought
from other business to arrive at a new product.

Example:
Dell, nokia, Ford,
samsung, LG,
Toshiba, Whirlpool,
Sony, Cannon,
Titan, Ferrari,
Fossil etc…
 CONSTRUCTION INDUSTRIES
• These industries are concerned with the
creation of infrastructure facilities for
facilitating other activities. Engineering and
architecture skills play an important role.

• Examples : Salarpuria Properties P L, Alpha

Constructions, Hindustan Construction Co Ltd,
Aditya Birla Nuvo Limited
 COMMERCE
• Commerce includes all those activities which are
necessary to bring goods and services from the
place of their production to the place of their
consumption.
 FUNCTIONS OF COMMERCE

• Hindrances of persons
• Hindrances of exchange
• Hindrances of place
• Hindrances of time
• Hindrances of information
DEFINITION – MANAGEMENT:

“To manage is to forecast, to plan, to organize, to command, to coordinate

and to control.”
- HENRY FAYOL

“Management is knowing exactly what you want men to do and then seeing
that they do it in the best and cheapest way”
- F. W. TAYLOR
CHARACTERISTICS OF MANAGEMENT:
1.Management is a group activity: - Management is an essential part of
group activity. As no individual can satisfy all his desires himself, he unites
with his fellow- being and works in an organized group to achieve what he
cannot achieve individually.

2. Management is goal-oriented: - Management aims to achieve

economic and social objective. It exists to achieve some definite goals or
objectives. Group efforts in management are always directed toward the
achievement of some pre-determined goals.

3. Management is universal in character: - Management is applicable in

all types of organization. Whenever there is human activity, there is
management. The basis principle of management are
universal application and can be applied in all organization whenever they
are business, social, religious, cultural, sport, educational, politics or
military.
4. Management is needed at all levels of the organization: - Another
important feature of management is that it is needed at all levels of
the organization, e.g. top level, middle level and supervisory level. The
only difference is of the nature of task and the scope of authority.

5. Management is a social process: - Management is getting things

done through others. This involves dealing with people. The efforts of
the human beings have to be directed, co-ordinate and regulated by
management in order to achieve the desired results.

6. Management is a system of authority: - Since management is a

process of directing men to perform a task, authority to accomplish
the work from others is implied in the every concept of management.
Management cannot perform in the absence of authority.

7. Management is a dynamic function: - Management is a dynamic

function and it has to be performed continuously. It is constantly
engaged in the molding of the enterprise in an ever charging business
environment.
8. Management is an art as well as a science: - Management is a science
because it has developed certain principle which is of universal
application. But the result of management depend upon the personnel
skills of managers and in this sense management is an art.

9. Management is a profession: - In the present days, management is

recognized as a profession. It has a systematic and specialized body of
knowledge .

10. Management aims at maximising profits: - the available resources

are properly utilised to get desired results. The results should be the
maximizing or increasing profits by the economic function of a manager.
DIFFERENCE BETWEEN MANAGEMENT &
ADMINISTRATION:

The term administration and management are used

synonymously. Running of a businesss requires skills which
is called Management and functioning of government
departments and non-profit institutions requiring skil is
called Administration.
 ADMINISTRATION MANAGEMENT

• Determines policy to be followed • Implement the policy & achieve

& decide the objectives to be the objectives.
achieved.
• Directly involves in the execution
• Functions are largely Legislative. of the plan & achieving the
objectives.

• It’s a lower-level management –

• It’s a top-level function –
Planning, Organizing, Staffing. Direction, Motivation & Control.

• Requires administration ability • Requires technical ability more

more than technical ability. than administration ability.

• Is a thinking function. • Is a doing function.

SCOPE OF MANAGEMENT:
1.SUBJECT MATTER OF MANAGEMENT – includes the various functions
such as Planning, Organizing, Staffing, Directing & Control.

2.FUNCTINAL AREAS OF MANAGEMENT - consists of the following areas:

•Financial Management - cost control, bedgetary control, management
accounting.

•Personnel Management – recruitment, training, promotion, retirement,

social security, labor welfare.

•Production Management – production planning, production control and

quality control.
• Office Management – office layout, equipment layout.

• Marketing Management – price determination, channels of

distribution, market research, sales promotion & advertising.

• Maintenance Management – maintenance of building, plant &

machinery, furniture.
FUNCTIONS OF MANAGEMENT:

1.PLANNING - its the primary function of management.

•Planning refers to deciding in advance as to what would be done in the
near future.

•In an organisation it is important to achieve the objectives, in order to

achieve them planning helps to determine what is to be done, how it is
to be done and by whom it is to be done.

•Planning pervades Management.

•Thus, planning includes determination of the objectives, setting

policies & procedures, determining projects, setting strtegies,
budgeting.
2. ORGANISING – is the distribution of work in group wise or section
wise for effective performance .

•Organisation divides the total work and co-ordinates all the

activities by authority relationship. Besides organizing defines the
position of each person in the organization and also decides the path
through which the communication should flow.

• “organising consists of conscious co-ordination of people towards

a desired goal”. - KOONTZ & O’DONNEL
3. STAFFING - involves manpower planning & manpower management.

• it includes preparing inventory of personnel available, requirement of

personnel, sources of manpower selection, their selection, remuneration,
training & development and periodic appraisal of personnel working

•It is the placement of the right persons in the right jobs.

•The success of any organisation depends upon the successful performanc of

staffing function.
4. DIRECTING – actual performance of the work.

•Direction deals with making the workers learn the techniques to

perform the jobs assigned to them.

•It includes Guidance, Supervision & Motivation of the employees.

• “ Directing concerns the total manner in which a manager influences

the action of his subordinates. It is the final action of a manager in
getting others to act after all the preparations have been completed.”
5. CONTROLLING - is the last function of management.

•It is to see whether the activities have been performed in conformity with
the plans or not.

• “ it is the process of checking to determine whether or not, proper

progress is being made towards the objectives and goals and acting, if
necessary to correct any deviation.
- PROF. HAIMANN

• a good system of control has the characteristics of : economy, flexibility ,

understanding and adequacy to organisational needs.
 THANK YOU…….
OPEN FOR QUERIES

-NEHA.A.JAIN
- PRIYADARSHINI.S