Business Studies

Business plays a vital role in lives, not only by providing various goods and services but also by offering many opportunities to earn livelihood.

There are certain organisations which undertake business activities with the prime objective of providing service to the members. Although they also earn some amount of profit, but their main intention is to look after some common interest of its members. They pool available resources from the members, utilise the same in the best possible manner and share the benefits. These organisations are known as Cooperative Societies.

The Joint Hindu Family (JHF) business is a form of business organisation run by Hindu Undivided Family (HUF), where the family members of three successive generations own the business jointly. The head of the family known as Karta manages the business. The other members are called co-parceners and all of them have equal ownership right over the properties of the business.

Partnership is an association of two or more persons who pool their financial and managerial resources and agree to carry on a business, and share its profit. The persons who form a partnership are individually known as partners and collectively a firm or partnership firm.

The term 'sole' means single and 'proprietorship' means ownership. So, only one person is the owner of the business organisation. This means, that a form of business organisation in which a single individual owns and manages the business, takes the profits and bears the losses, is known as sole proprietorship form of business organisation.

Business organisations may be owned and managed by a single individual or group of individuals who may form a partnership firm or a joint stock company. Such arrangement of ownership and management is termed as a form of business organisation.

Another important trend in business, of late, has been outsourcing of some of its activities i.e., use of outside sources to perform activities traditionally handled by internal staff and resources. For example, most companies have so far had their own staff for cleaning and security activities in their organisations. But, of late many companies have started entrusting these tasks to outside agencies on contractual basis.

There are numerous threats to the security of e-Commerce from the customer’s side as well as the vendor’s side. The following steps are usually taken to ensure security in online transactions.

As with any trading processes, the online transactions involve the following stages:

1. Search

For making a purchase, the prospective customer has to find an appropriate vendor by using various web sites, either directly or through a search engine.

Following resources are required for successful e-business implementation:

1. A Website

A business must develop a website to effectively communicate with its customers. Detailed information of the enterprise should be provided on the website. Necessary pictures should also be posted on the website.

The impact of e-Commerce has already begun to appear in all areas of business ranging from customer service to new product design. It has facilitated new types of information based interaction with customers, Internet bookshops, online super market, electronic newspapers, on-line trading on stock exchanges (e-Trading), online advertising (e-Advertising), on-line taxation (e-Taxation), online ticketing (e-ticketing), online banking (e-Banking), computerisation in postal communication (e-Post) and so on.

Commerce involves buying and selling and support services like transport, insurance, banking, communication, etc. When all these activities are undertaken using information and communication technologies, it is termed as Electronic Commerce or e-Commerce.

To buy goods and services, you usually go to a nearby market personally where buyers and sellers get together for transactions. The buyers check the quality and bargain the price. The sellers, on the other hand, try to persuade the prospective buyers and finalise the transaction. Sometimes, you contact the sellers over telephone or through correspondence to buy the specific goods. These are the common modes of business transactions.

Business Ethics means the business practices which are desirable from the point of view of the society. i.e. the moral principles which should be followed by business. Business ethics are concerned with determining what is right and what is wrong while doing the business. By ethics we mean the business practices which are desirable from the point of view of the society.

Every business enterprise is an integral part of the society. It uses the scarce resources of the society to continue and grow. Hence, it is important that no activity of business is injurious to the long run interests of the society. However, it is observed that, in practice, there are a few socially undesirable aspects of business such as, polluting the environment, non-payment of taxes, manufacturing and selling adulterated products, giving misleading advertisement and so on.

Confining business environment to uncontrollable external factors, it may be classified as:

  1. Economic environment
  2. Non-economic environment

The success of every business depends on adapting itself to the environment within which it functions. For example, when there is a change in the government polices, the business has to make the necessary changes to adapt itself to the new policies. Similarly, a change in the technology may render the existing products obsolete, as we have seen that the introduction of computer has replaced the typewriters; the colour television has made the black and white television out of fashion.

The words ‘warehouse’ and ‘godown’ are synonymous and so warehouse refers to a place used for storing goods, and warehousing refers to the activities involving storage of goods on a large-scale in a systematic and orderly manner and making them available conveniently when needed. In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale. Thus, it creates time utility by bridging the time gap between production and consumption of goods.

Communication is the process of transmission of ideas, opinions, thoughts and information through speech, writing, gestures or symbols between two or more persons. Communication always contains a message which is transmitted between the parties.

The goods produced at one place may be used or consumed at various places as the markets for goods now-a-days are spread over length and breadth of the country and even extend to countries across the border. Hence the goods have to be carried from place of production to the place of consumption or use.

Every business faces a variety of risks. For example, there may be injury to employees in job related accidents, goods may be lost in transit; there may be fire in the godown, and so on. In all these situations the entire loss is to be borne by the businessman or the owner.

Bank is an institution that deals in money and credit. It accepts deposits from those who have funds to spare and grants loans and advances to those who are in need of funds for various purposes. Thus, banking refers to the various services provided by banks, such as acceptance of deposits, grant of loans and advances, and other supplementary services.

Various types of business activities that usually take place in an economy are:

  • Extraction of oil, natural gas or minerals
  • Manufacturing of commodities
  • Buying of goods from one place or country and selling it at different place or country
  • Construction of buildings, roads, and bridges, etc
  • Providing services like ticketing, warehousing, transportation, banking, insurance, etc

Every human being is engaged in one activity or the other. It may be cultivating land, preparing food, playing football, reading storybooks, studying in a school, teaching in a college, working in an office, jogging in the park and so on. All these activities which human beings undertake to satisfy their needs or wants are called human activities.