This document provides an overview of the objectives of a business. It discusses the economic, social, human, national, and global objectives of a business. The economic objectives include profit earning, customer creation, innovation, and efficient resource use. Social objectives involve producing quality goods/services, fair trade practices, and contributing to society. Human objectives center around employee well-being, satisfaction, development, and helping disadvantaged groups. National objectives consist of job creation, social justice, prioritizing domestic production, and generating government revenue. Global objectives pertain to expanding international trade and complying with global standards.

1. Business
Organization &
systems
BBA –1
Supreet Wahee
Copyright © 2004 Pearson Education, Inc.
Slide 6-1

2. What is today about ?
 Getting around
( Self Introduction Exercise)
Name
School
Career Aspirations
 An adjective that describes you starting from the
first alphabet of your name
 Ground rules
Copyright © 2004 Pearson Education, Inc.
Slide 6-2

3. Ground Rules

4. Ground Rules
Enjoy
Learning

5. Unit 1
Nature of Business
Copyright © 2004 Pearson Education, Inc.
Slide 6-5

6. Learning Objectives
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Introduction
Economic & Non-economic Activities
Concept of Business
Comparison between Business ,Profession ,Employment
Nature & characteristics of Business
Scope of Business
Objectives of a Business System
Structure of Business
Requisites of success in Modern Business
Qualities of successful businessman

7. Overview
Business
Copyright © 2004 Pearson Education, Inc.
Slide 6-7

8. Human Activities and Business
All human activities are broadly divided into two categories:
(i)
economic activities (ii) non-economic activities.
The work of a farmer, manufacturer, teacher, doctor, trader etc. are some
examples of economic activities.
They are primarily concerned with the production, distribution and consumption
of goods and services
Economic activities are undertaken to earn one’s living and for the
production of wealth.
Besides economic activities, people also undertake a number of activities for
mental satisfaction. They engage in charitable work, practice religion, undertake
recreational activities and also do many things out of love for others or out
of patriotic feelings. These activities are known as non-economic activities.
these activities are undertaken not for any material reward or gain but for
one’s happiness, pleasure or satisfaction which can not be measured in terms
of money.

9. Distinction between economic and non-economic
activities
Economic
Non-economic
Economic activities are
motivated by economic gain
Non-economic activities are
motivated by a desire to achieve
mental satisfaction or happiness.
Monetary gain is expected
from economic activities
There is no such satisfaction from
non-economic activities
Economic activities lead to
creation of wealth.
Non-economic activities lead to
personal satisfaction.

10. What is Business?
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Wheeler –”An institution organized and operated to provide
goods & services to the society under the incentive of private
gain”
L.H Haney “Business may be defined as human activities
directed towards providing or acquiring wealth through buying
and selling good”
Economic system in which goods and services are exchanged
for one another or money, on the basis of their perceived worth.
Every business requires some form of investment and a
sufficient number of customers to whom its output can be sold
at profit on a consistent basis.
A commercial activity engaged in as means of live hood or profit
or an entity which engages in such activities

11. Understanding The Business System
Old concept of Business:

The exclusive objective of business in those was maximization of profit at
any cost

Business begin merely as an as an institution for the purpose of making
money

As long as one made money and kept himself out of jail he was
considered as successful

He felt no particular obligation and acknowledged no responsibility to the
community

He being the owner of business thought he had perfect right to do what he
pleased

12. New concept of Business:

The modern business enterprise is social & economic institution .It does not
exist in a vacuum .

Business by itself is not an end but a means to achieve an end ,a means to
achieve public welfare

Profit alone is no longer the main objective of business now .

The objective of business is to create customer .The customer is the master
and to serve him well is the only purpose of business

Business cannot survive without customers

Modern business aims at profit through business

13. Types of Economic Activities
When a person is regularly engaged in a particular economic
activity, it is known as his or her occupation or vocation.
Occupations may be classified into three categories —
(i) Business,
(ii) Profession and
(iii) Employment (Service).

14. Concept of Profession & employment

Profession: A profession may be defined as an
occupation which involves the rendering of personal
services of a specialized nature ,based on
professional knowledge ,education and training such
as services rendered by physicians ,lawyers ,auditors
etc .

Employment Service or employment involve
working under a contract of employment for
or under someone known as the employer in
return for wages or salary .

15. Comparison Between Business,
Profession ,Employment

16. Nature or characteristics of Business
1. Sale ,Transfer or Exchange for satisfaction of Human Needs
2. Dealings in Goods & services
3. Continuity in Dealings
4. Profit Motive
5. Risk or Uncertainty
6. Creation of Utilities
7. Economic Activity

17. The nature business is best understood on the basis of its characteristics
Natureofof Business
or features which are as follows:
1. Business is an economic activity
2. It includes the activities of production or purchase and distribution.
3. It deals in goods and services.
4. It implies regularity of transactions.
5. It aims at earning profits through the satisfaction of human wants.
6. It involves risk; it is not certain that adequate profit will be earned.
7. It creates utilities.
8. It serves a social purpose by improving people’s standard of living.

18. Objectives of Business - Meaning
Business objectives are something which a business organization wants to
achieve or accomplish over a specified period of time.
These may be to earn profit for its growth and development, to provide
quality goods to its customers, to protect the environment etc.
These are the objectives of business.
Classification of Objectives of Business

19. Classification of Objectives of Business

20. Economic Objectives
Economic objectives of business refer to the objective of earning profit and also
other objectives that are necessary to be pursued to achieve the profit
objective, which include, creation of customers, regular innovations and best
possible use of available resources.
i. Profit earning

Profit is the lifeblood of business, without which no business can survive in a
competitive market .Infact profit making is the primary objective for which a
business unit is brought into existence.

Profits must be earned to ensure the survival of business, its growth and
expansion over time.

Profits help businessmen not only to earn their living but also to expand their
business activities by reinvesting a part of the profits.

In order to achieve this primary objective, certain other objectives are also
necessary to be pursued by business, which are as follows:

21. a) Creation of customers

A business unit cannot survive unless there are customers to buy the products and
services.

Again a businessman can earn profits only when he/she provides quality goods and
services at a reasonable price. For this it needs to attract more customers for its
existing as well as new products. This is achieved with the help of various
marketing activities.
b) Regular innovations

Innovation means changes, which bring about improvement in products, process of
production and distribution of goods.

Business units, through innovation, are able to reduce cost by adopting better
methods of production and also increase their sales by attracting more customers

because of improved products.
Reduction in cost and increase in sales gives more profit to the businessman. Use
of power-looms in place of handlooms, use of tractors in place of hand implements
in farms etc. are all the results of innovation.

22. c) Best possible use of resources

As you know, to run any business you must have sufficient capital or funds.
The amount of capital may be used to buy machinery, raw materials, employ
men and have cash to meet day-to-day expenses.

Thus, business activities require various resources like men, materials, money
and machines.

The availability of these resources is usually limited. Thus, every business
should try to make the best possible use of these resources.

This objective can be achieved by employing efficient workers, making full use
of machines and minimizing wastage of raw materials.

23. Quick check
Given below are some statements relating to the economic objectives of
business.
Some statements are true and some are false. Identify the true statements:
i Creation of demand for goods is the primary objective of business.
ii. Profits are expected to be earned by businessmen in proportion to the
amount
of capital invested in business.
iii. It is not always necessary for businessmen to make the best possible use
of
materials.
iv. Businessmen should use profits earned from the business only for their
own
living.
v. Generation of employment is the primary economic objective of business .

24. Social Objectives

Social objectives are those objectives of business, which are desired to be
achieved for the benefit of the society.

Since business operates in a society by utilizing its scarce resources, the
society expects something in return for its welfare. No activity of the business
should be aimed at giving any kind of trouble to the society. If business
activities lead to socially harmful effects, there is bound to be public reaction
against the business sooner or later.

Social objectives of business include production and supply of quality goods
and services, adoption of fair trade practices and contribution to the general
welfare of society and provision of welfare amenities.

25. i. Production and supply of quality goods and services

Since the business utilizes the various resources of the society, the society
expects to get quality goods and services from the business.

The objective of business should be to produce better quality goods and
supply them at the right time and at a right price. It is not desirable on the part
of the businessman to supply adulterated or inferior goods which cause injuries
to the customers.

They should charge the price according to the quality of the goods and
services provided to the society.

Again, the customers also expect timely supply of all their requirements. So it
is important for every business to supply those goods and services on a
regular basis.

26. ii. Adoption of fair trade practices

In every society, activities such as black-marketing and over-charging are
considered undesirable.

Besides, misleading advertisements often give a false impression about the
quality of products. Such advertisements deceive the customers and the
businessmen use them for the sake of making large profits. This is an unfair trade
practice.

The business unit must not create artificial scarcity of essential goods or raise
prices for the sake of earning more profits.

All these activities earn a bad name and sometimes make the businessmen liable
for penalty and even imprisonment under the law.

Therefore, the objective of business should be to adopt fair trade practices for the
welfare of the consumers as well as the society.

27. iii. Contribution to the general welfare of the society

Business units should work for the general welfare and upliftment of the
society. This is possible through running of schools and colleges for better
education, opening of vocational training centers to train the people to earn
their livelihood, establishing hospitals for medical facilities and providing
recreational facilities for the general public like parks, sports complexes etc.

28. Quick Check
Which of the following statements relating to social objectives of
business are right and which are wrong?
i)
Social objective of business is based on the assumption that what is
good for business is also good for society.
ii) Production and supply of quality goods to the consumer is the social
objective of business.
iii) Creation of demand for the product is a social objective of business.
iv) Establishment of sports complex for the public is the economic
objective of business.
v) Hoarding and black-marketing are considered desirable on the part of
business.

29. Human Objectives

Human objectives refer to the objectives aimed at the well-being as well as
fulfillment of expectations of employees as also of people who are disabled,
handicapped and deprived of proper education and training.

The human objectives of business may thus include economic well-being of
the employees, social and psychological satisfaction of employees and
development of human resources.
i. Economic well being of the employees

In business employees must be provided with fair remuneration and
incentives for performance, benefits of provident fund, pension and other
amenities like medical facilities, housing facilities etc. By this they feel more
satisfied at work and contribute more for the business.

30. ii. Social and psychological satisfaction of employees

It is the duty of business units to provide social and psychological
satisfaction to their employees.

This is possible by making the job interesting and challenging, putting the
right person in the right job and reducing the monotony of work.

Opportunities for promotion and advancement in career should also be
provided to the employees.

Further, grievances of employees should be given prompt attention and
their suggestions should be considered seriously when decisions are made.

If employees are happy and satisfied they can put their best efforts in work.

31. iii. Development of human resources

Employees as human beings always want to grow. Their growth requires
proper training as well as development.

Business can prosper if the people employed can improve their skills and
develop their abilities and competencies in course of time.

Thus, it is important that business should arrange training and development
programmes for its Employees.

32. iv. Well being of socially and economically backward people

Business units being inseparable parts of society should help backward
classes and also people those are physically and mentally challenged. This
can be done in many ways

. For instance, vocational training programme may be arranged to improve
the earning capacity of backward people in the community.

While recruiting it staff, business should give preference to physically and
mentally challenged persons.

Business units can also help and encourage meritorious students by
awarding scholarships for higher studies

33. Quick Check
Below are given some statements regarding human objectives of
business. State which of them are “true” and which are “false”:
i.
Businessmen should pay proper remuneration which will motivate
the workers for work.
ii. Business units should provide social and psychological
satisfaction to the employees.
iii. Businessmen should not help disabled persons unless they are
employed in business.
iv. Business units should ignore the suggestions given by the
employees while taking important decisions.
v. Helping physically handicapped persons in the society is an
economic objective of Business.

34. National Objectives

Being an important part of the country, every business must have the objective
of fulfilling national goals and aspirations.

The goal of the country may be to provide employment opportunity to its citizen,
earn revenue for its exchange, become self-sufficient in production of goods and
services, promote social justice, etc.

Business activities should be conducted keeping these goals of the country in
mind, which may be called national objectives of business. The following are the
national objectives of business.
i. Creation of employment

One of the important national objectives of business is to create opportunities for
gainful employment of people.

This can be achieved by establishing new business units, expanding markets,
widening distribution channels, etc.

35. ii. Promotion of social justice

As a responsible citizen, a businessman is expected to provide equal
opportunities to all persons with whom he/she deals.

He/She is also expected to provide equal opportunities to all the employees to
work and progress.

Towards this objective special attention must be paid to weaker and backward
sections of the society.
iii. Production according to national priority

Business units should produce and supply goods in accordance with the
priorities laid down in the plans and policies of the Government.

One of the national objectives of business in our country should be to increase
the production and supply of essential goods at reasonable prices.

36. iv. Contribute to the revenue of the country

The business owners should pay their taxes and dues honestly and regularly.

This will increase the revenue of the government, which can be used for the
development of the nation.
v. Self-sufficiency and Export Promotion

To help the country to become self-reliant, business units have the added
responsibility of restricting import of goods. Besides, every business units should
aim at increasing exports and adding to the foreign exchange reserves of the
country

37. Quick Check
Fill in the blanks with suitable word(s) from those given in brackets:
(i) To produce and distribute essential goods at a reasonable price is a/an
_____________
objective of business. (social, national, human)
(ii) To help the country to become self-reliant business units should aim
at increasing
________________. (export import, prices)
(iii) Business units should pay taxes honestly and______________.
(occasionally, frequently,
regularly)
(iv) Business should provide equal opportunities to all its
________________.(owners,
employers, suppliers)

38. Global Objectives

Earlier India had a very restricted business relationship with other nations.
There was a very rigid policy for import and export of goods and services.

But, now-a-days due to liberal economic and export–import policy, restrictions
on foreign investments have been largely abolished and duties on imported
goods have been substantially reduced.This change has brought about
increased competition in the market.

Today because of globalization the entire world has become a big market.
Goods produced in one country are readily available in other countries. So, to
face the competition in the global market every business has certain objectives
in mind, which may be called the global objectives.
Let us learn about them.

39. i. Raise general standard of living

Growth of business activities across national borders makes available quality
goods at reasonable prices all over the world.

The people of one country get to use similar types ofgoods that people in other
countries are using.

This improves the standard of living of people.
ii. Reduce disparities among nations

Business should help to reduce disparities among the rich and poor nations of
the world by expanding its operation.

By way of capital investment in developing as well as underdeveloped countries
it can foster their industrial and economic growth.

40. iii. Make available globally competitive goods and services

Business should produce goods and services which are globally competitive
and have huge demand in foreign markets.

This will improve the image of the exporting country and also earn more
foreign exchange for the country.

41. Quick check
Match the following.
(A) (B)
i. Lower Interest rate a. Political factor
ii. Demand for Packaged Food b. Technological
factor
iii. Strike in the factory c. Social factor
iv. New Methods of Production d. Economic factor

42. Requisites of Success in Modern
Business
&
Qualities of a Successful
Businessman
Copyright © 2004 Pearson Education, Inc.
Slide 6-42

43. Ingredients of Good Business
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Scan Pg 1.16 in modern business org and
mngments.a sherlekar

44. Requisites of Success in Modern
Business
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Clear –cut Objectives
Efficient Business planning
Proper Size Location ,and Layout
Sound Organization ‘Financial Planning
Marketing network
Executive Development
Dynamic Management
Human Relations
Research & Development

45. Qualities of a Successful Businessman
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Wide Knowledge
Initiative
Physical energy Foresight
Business Morality
Dependability & consistency
Ability to cooperate
Self-Confidence
Aptitude for research & Analysis
Winning Personality

46. Besides the above traits, the most important qualities of a businessman are as
follows:
Initiative and capacity to take prompt decision: Now-a-days, things move very
fast and as such the businessman should have the capacity to take initiative and
prompt decision.
Determination, courage and perseverance: He must have strong will power and
determination. He must have courage and perseverance to face the initial and
future problems of the business.
Intelligence and alertness: The businessman should be alert to his surroundings
and he must be aware of the possible changes otherwise he will fail in business. He
should be intelligent enough to utilize business opportunities.
Quality of leadership: He should have the quality of leadership because today's
business require loyalty and co-operation of all employees.
Morality and integrity: The businessman should be honest, straight-forward, fair in
dealings, dependability, and moral character. If a businessman intends to make
money in a dishonest manner, he cannot establish in business for a long period.
Training and Education: The businessman should learn the intricacies of modern
business through training and education. These are thus essential for a successful
businessman.
Besides the above qualities, the businessman should posses the qualities of tact,
patience, foresight, frankness, common sense and charming.

47. Qualities Of a successful business
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Independent
Risk bearing
Locus of Control ,
Preservance
Positive self concept
Analytical ability of mind
Sense of Afficacy
Openness to feedback & learning from Experience
Confronting Uncertainty
Interpersonal skills
Need to influence others
Stress takers
Time Orientation
Innovators
Business communications skills
Telescopic Faculty
Leadership
Business Planning

48. Significance of Business in Modern Society
Business is an integral part of modern society. It is an organized and systematized activity for
profit.
It is concerned with activities of people working towards a common goal.
The modern society can not exist without business.
The need and importance of business in society can be described as follows:
1. Improvement in standard of living:
Business helps people in general to improve their standard of living.
2. Proper utilization of resources:
It leads to effective utilization of the scarce resources of society.
It provides facility of mass production.

49. 3. Better quality and large variety of goods and services:
It involves production, purchase and sale of goods and services for price. Customer’ satisfaction
is the backbone of modern business.
Services such as supply of water, electricity etc. may be considered highly significant for the
community.
4. Creates utilities:
Business makes goods more useful to satisfy human wants. It adds to products the utilities of
person, time, place, form, knowledge etc. Thus, people are able to satisfy their wants
effectively and economically.
5. Employment opportunities:
It provides employment opportunities to large number of people in society.
6. Workers' welfare
Business organisations these days take care of various welfare activities for workers. They
provide safer and healthier work environment for employees.

50. Structure of Business
Copyright © 2004 Pearson Education, Inc.
Slide 6-50

51. Business Departments
Accounting
Accounting departments examine and analyze money within the company.
● Management Accounting – Provides accounts for management
● Financial Accounting – Provides accounts for external reports
Human Resources (Personnel)
Human resources hires, fires, administrates, motivates and provides services
for employees
● Payroll – Provides salaries for staff
● Recruitment – Recruits new staff
● Training – Trains staff
● Talent Management – In some companies there will be a special department
to manage the needs of specialist personnel. e.g. Actors, singers or
engineers with specialist skills.

52. Marketing and Sales
Marketing and sales deal with customers and sell the company's products.
● Sales – Sell the company's products
● New Business – Gets in new customers
● Account Management – Manages existing customers
● Telesales – Sells via the telephone
● Customer service – Provides service after the customer has bought a product
● Strategic Marketing – Plans future marketing
Market Research – Analyses customers wants and needs
● Advertising – Manages advertising and promotions
● Corporate Communications – Provides information to shareholders, customers,
employees and other stakeholders
● Public Relations – Deals with the press
Operations
Operations will depend on the type of company. It could be: Production, manufacturing,
assembly, design or retail.

53. Procurement
● Strategic Sourcing – Plans materials and suppliers requirements
● Purchasing – Purchases supplies on a day to day basis
Research and Development
Develop new products
Information Technology
● IT Support – Looks after computers and solves employees' IT problems
● Strategic Information Systems – Plans new technology
● Data Entry – Enters in information
Administration
Deals with paperwork within a company.
Logistics
Deal with transporting resources. Can be supplies, products and internal
transfers.

54. Which Department?
Which department would deal with the following:
1. There is something wrong with the accounts computer
2. Management need the latest sales figures
3. There is lead in the toys we manufacture and a reporter is asking
questions
4. We need a better phone to compete with Apple's iPhone
5. We need to improve the quality of our Radio adverts
6. We need to ensure that our key design team do not find jobs with our
competitors
7. We need to hire more people
8. We need to do the annual accounts
9. We need to find a way to increase sales by 20% over the next three
years.
10. We need to find out why customers are not buying our orange paint.

55. Forms of business organization
Although forms of business ownership vary by jurisdiction, there are several common
forms:
Sole proprietorship: A sole proprietorship is a business owned by one person. The
owner may operate on his or her own or may employ others. The owner of the business
has personal liability of the debts incurred by the business.
Partnership: is a form of business in which two or more people operate for the
common goal which is often making profit. In most forms of partnerships, each partner
has personal liability of the debts incurred by the business. There are three typical
classifications of partnerships: general partnerships, limited partnerships, and limited
liability partnerships.

56. Corporation: is either a [limited liability ] or unlimited liability entity that has a separate
[legal personality] from its members. A corporation can be organized for-profit or notfor-profit. A corporation is owned by multiple shareholders and is overseen by a board
of directors, which hires the business's managerial staff. In addition to privately
owned corporate models, there are state-owned corporate models.
Cooperative: Often referred to as a "co-op", a cooperative is a limited liability entity that
can organize for-profit or not-for-profit. A cooperative differs from a corporation in that
it has members, as opposed to shareholders, who share decision-making authority.
Cooperatives are typically classified as either consumer cooperatives or worker
cooperatives. Cooperatives are fundamental to the ideology of economic democracy.
For a country-by-country listing of legally recognized business forms, see Types of
business entity.

57. Scope of Business Organization /
Classification of Business Activities
Copyright © 2004 Pearson Education, Inc.
Slide 6-57

58. Scope Of Business

59. Classification of Business Activities
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Industry :is that branch which is concerned with
the production of good & services .
the term industry is used to refer to useful things
are extracted from environment and transformed
,processed ,fabricated and multiplied into other
products
Commerce :is concerned with the exchange of
goods & services with all that is involved buying &
selling of goods at any stage in their progress from
raw materials to finished good on consumer hands

60. 
•
•
•
•
Primary Industries :Primary businesses and industries are those
which extract (i.e. mine, farm, fish or drill) things normally provided
by nature, e.g.
~ fish from the sea;
~ metal from the earth;
~ food from the land.
They produce raw materials in the form of oil, iron, coal or limestone,
which are used to make other products. Also, they may also produce
final products such as fish or fruit.
Extractive Industry :These industries extract or draw out products
from natural sources such as earth ,soil ,water ,air etc
Examples: Farming ,mining ,Hunting ,fishing etc
Genetic Industry :means parentage or hereditary .Genetic
Industries are engaged in multiplying or reproduction of certain
species of plants & animals
Example: Cattle breeding farms, poultry farms ,fish farms ,hatcheries
& commercial kernels

61. •
•
•
•
Secondary Industries :Secondary businesses and industries
are those involved in manufacturing products. That is, they turn
the raw materials produced by the primary industries into things
that can be sold and used. e.g.
~ metal into cars
~ wood into furniture
~ wheat into bread
Manufacturing Industries :these industries are concerned with
conversion of raw material & semi finished products into finished
products .They create form Utility
Analytical :The Basic material is analyzed & separated into a
number of products .Oil refinery-crude oil is extracted from
beneath the earth and is processed into petrol ,diesel ,kerosene
,gasoline ,lubricating oil etc .
Syntactical: Two or more products mixed together in the
manufacturing operations to obtain some new products
:example Soap ,cement ,paints ,fertilizers ,cosmetics etc

62. •
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Processing: Raw ,materials are processed through a series of
manufacturing operations .examples-textile sugar ,steel
Assembling :various components or parts are brought together
to produce finished products
Manufacture of Radio ,bicycle TV . Watches automobiles etc
Construction Industries :They are concerned with making of
Buildings ,bridges ,dams ,roads ,canal etc

67. National & International Business
International business
National Business
International business carries out its business activities
across the boundaries of the nation
National Business carried out within the boundaries of the
nation
International Business faces more problems and
National Business faces comparatively less problems in these
complexities in terms polices ,legal and Financial Systems aspects .
Other Challenges in this are the cross cultural & different
Market Structures
It is not in this case
it is carried out in an unusual conditions like political
differences of the countries ,legal aspects that impose
certain conditions ,rules and regulations on the
conducting of international business
the domestic business activities are free from these
restrictions, as they are carried out in the same infrastructure
environment and within the same rules & regulations
Formulation of strategies by the organizations performing Formulation of strategies by the organizations performing
international business is not an easy task
domestic business is not as difficult .
IB is prone to various risks like -Political ,Exchange rate
risk
this is free from all these risks
Due too various reasons & decisions IB is very complex
This is not as complex

68. What is a Business System
A system is an organized or complex whole ,a combination of things or parts forming
a complex or unitary whole .
A system is an established arrangement of components which lead to the attainment
of particular objectives according to the plan.
A business enterprise is a system consisting of various sub-systems which operate in
a balanced ,coordinated and integrated manner to make the whole as a business
system
The business system is a subsystem of the national economic system.
Its is a combination of all resources ,institutions and organizations ,engaged ,directly
or indirectly in production & distribution of goods & services desired by consumers
The system includes all sectors viz private ,public ,joint ,cooperative sectors .
Thus the business system has two parts :operating Structure & Environmental
factors in which the structure operates .
The operating structure is the entire group of business organization & enterprises
Environmental Factors are economic ,human ,social, political ,technological factors

69. 
A business system is an organized or
complex or whole, combination of things or
parts forming a complex or unitary whole. A
business system is an established
arrangement of components which leads to
the attainment of particular objective
according to plan.

70. On this basis of a business system may be presented as
follows:
 Inputs: consists of human and non-human resources like
money, material, equipment and information.
 Processing: Consists of production, finance, personnel,
marketing, processing of information and
 Output: Consists of goods and services, compensation to
owners and employees, meeting societies expenditure
 Feed back: Consists of (i) If result not acceptable adjust
resources - like better machinery and better
management.
 Above all parts or components must be closely
coordinated and properly integrated, so that the entire
system is a unified whole and it can accomplish common
objectives as per plan.

71. Characteristics Of business system

Goal Orientation-directed towards achievement of specific objectives

Creativity-converts resources into useful products

Complexity-consists of innumerable elements and entities

Interdependence-various components are highly interacting and interdependent

Diversity-there is diversity in the range of output ,size ,ownership, location
,organization, management

Dynamism-the structure & operations of business system are continuously changing
due to changes in its environment

Part of Socio-economic system-Business environment consist of all those
economic ,social, political, legal ,technological and other forces which influence the
functioning of business.

Control Mechanism-Control mechanism helps to coordinate the organizational
activities and to respond to environmental opportunities and constraints

73. THE END

74. Business as a System



If we look at a business as a system ,it may be
regarded as entity functioning in the social ,Economic
,political & cultural environment of a country or even
world
The structure of business system consists of
subsystems of industry & commerce .These sub
systems are made up of various forms of enterprise
which are engaged in the production and supply of
goods and services to the community.
Each firm or enterprise is itself a system
compromising sub-systems like production
,marketing ,financing ,personnel etc .

75. 
Each of these functions or systems has its
own sub systems .The behavior of the
business system as a whole depends on the
functioning of and interrelationship among
these sub systems .However these sub
systems are the direct parts of the business
system and these constitute the structure of
business .The structure of business being a
sub-system of the society is tied up with the
environment in which it has to function

76. Objectives Of business system

To convert inputs to outputs through coordinated efforts of all subsystems within the
business system

To formulate the aims and objectives of the business

To ensure the integrated development of business plans and programmes in all the
areas of business

To provide a good basis for the logical and orderly analysis of business activities

To stress on both internal & external linkages of business activities

To ensure good framework for managerial control

To use right information for decision making

To adapt to ever changing environment

To create opportunities for innovation

To provide for effective measurement and control

77. Organizing a business
The major factors affecting how a business Is organized are usually
The size & scope of the business , and its anticipated management &
ownership. Generally a smaller business is more flexible ,while larger business ,or
those with wider ownership or more functional structures, will usually tend to be
organized as partnership or( more commonly) corporations .In addition ,a business
which wishes to raise money on a stock market or to be owned by a wide range of
people will often be required to adopt a specific legal form to do so
The sector and country. Private profit making businesses are different from government
owned bodies. In some countries, certain businesses are legally obliged to be
organized in certain ways.

78. Limited liability. Corporations, limited liability partnerships, and other
specific types of business organizations protect their owners or
shareholders from business failure by doing business under a separate legal
entity with certain legal protections. In contrast, unincorporated businesses
or persons working on their own are usually not so protected.
Tax advantages. Different structures are treated differently in tax law, and
may have advantages for this reason.
Disclosure and compliance requirements. Different business structures
may be required to make more or less information public (or reported to
relevant authorities), and may be bound to comply with different rules and
regulations.

79. What is a Business System
A system is a set of parts ,elements or components which are interrelated and which
interact with one another and make up the whole. these elements work together on
the inputs as to accomplish common objectives ,that is the objective of the entire
system
In simplest form ,
*An environment
*An Input
*A processing Unit
*Feedback
*An output
A business organization can be regarded as an open adhesive system with its
environment acting as a supra –system.

80. A Quick Check
Copyright © 2004 Pearson Education, Inc.
Slide 6-80

81. Qualities Of a successful business
Business Ability
For the success of any business it is essential that a businessman must possess
the sounds knowledge of market, product, technological development,
scientific .inventions, innovation, organization and business laws. It requires an
ability to initiate, direct and control, and even more important, the capacity to
win and hold the respect and loyalty of fellow workers. It permits the
businessman to work efficiently for the prosperity of his business. This type of
quality depends first on temperament and second on training.
Financial Ability
Finance is an important factor for successful operation of the business. Without
adequate finance no business can smoothly run. So a businessman must
possess good financial position. The larger the amount of capital, the larger is
the size of business and larger the volume

82. Qualities Of a successful businessman
.
Good Appearance
This is a prominent quality required in a businessman. It help him much to win the
opinion of the public. Good appearance is a rare quality and depends on a
combination of many other qualities of head and heart. It is the capacity of
attracting and influencing other people without conscious effort. A
businessman with sound personality can easily win the confidence of his
prospect and convince him about his point of view.
of profit.

83. Spirit to Co-Operate
This businessman shall be a good Co-operator, and so a good businessman.
He must be able to compromise adjust, adapt, and be willing to admit that
his judgment may on occasions be wrong. Besides he must be
temperamentally fitted to exercise a divided authority.
Well Balanced
A businessman must be a well balanced man of talent. He must have a
consistent mind for clearness, steadiness and firmness in his dealings with
others. He must never be prey to moods, by being of complacent temper
today.
Sincerity and Honesty
A businessman should be sincere and honest in his business activities. His own
and the form's reputation depends on honesty. This honesty and sincerity
which goes with it are attributes of the businessman at his best. Honesty
with him is not only the best policy but also the best practice.
Enthusiasms
The next quality without which no one should consider a profession as a I
businessman, is enthusiasm for his activities, for an unsettled life, and for
long hours and for the people who is going to meet. Then the knowledge of
product, knowledge of the marketing conditions and knowledge of the
prospect to enthusiasm and you have unbeatable combination.

84. Dependability
The successful businessman should have the capacity of dependability. He should use
every effort to hold it constant and dependable, so that those who work under it know
what to expect as it remains unfluctuating from day today. It keep him much to win
the heart of both customers and workers.
Courtesy
Courtesy is to business what oil is to machinery. It costs nothing but wins a reputation.
So businessman has to win the heart of everyone with his polite manners. Every one
cannot know how may down is head before the polite and courteous businessman.
Alertness
A businessman must be alert to the opportunities surrounding his business. He must
keep in touch with the world, and not keep himself to himself. He should move about
and see what is going on for he has to estimate new wants and new inventions for
creating fresh demands.
Sociability
Another notable quality of the businessman is ability to mix with anyone within a minute
or two. He must get himself introduced to an unknown persons within a short time.
Thus a businessman of sociable nature can easily win the confidence of many
persons and much popularity among them.

85. Classifications
Agriculture and mining businesses are concerned with the production of raw
material, such as plants or minerals.
Financial businesses include banks and other companies that generate profit
through investment and management of capital.
Information businesses generate profits primarily from the resale of
intellectual property and include movie studios, publishers and packaged
software companies.
Manufacturers produce products, from raw materials or component parts,
which they then sell at a profit. Companies that make physical goods, such
as cars or pipes, are considered manufacturers.
Real estate businesses generate profit from the selling, renting, and
development of properties, homes, and buildings.

86. Retailers and Distributors act as middle-men in getting goods produced by
manufacturers to the intended consumer, generating a profit as a result of
providing sales or distribution services. Most consumer-oriented stores and
catalogue companies are distributors or retailers. See also: Franchising
Service businesses offer intangible goods or services and typically generate a
profit by charging for labor or other services provided to government, other
businesses, or consumers. Organizations ranging from house decorators to
consulting firms, restaurants, and even entertainers are types of service
businesses.
Transportation businesses deliver goods and individuals from location to
location, generating a profit on the transportation costs
Utilities produce public services, such as heat, electricity, or sewage treatment,
and are usually government chartered.

87. Meaning of Business Organization
Business organization is composed of two words, business and organization. In order to understand
the nature of business organization, it is necessary that the meaning of these two words is made
clear to the readers.
(1) Business
Business is a human economic activity. It involves continuous and regular production and distribution
of goods and services with a view to earn profit. Money flowing in and earning of profit through the
satisfaction of the customers are the two measuring rods of the success of a business.
(2) Organization
The meaning of the word organization is generally divided into two parts (i) material organization and
(ii) human organization.
(i) Material Organization
The material organization is the determining and providing of necessary raw materials, tools, capital,
personnel etc in an enterprise fonts smooth functioning.
(ii) Human Organization
It is the appointment of qualified staff, dividing the duties and responsibilities of the personnel
employed. Then grouping these duties in the form of posts and delegating authority to each post so
that work is carried out as planned.
Business Organization
Thus is a process or an art of establishing effective cooperation between the factors of production
(land, material, capital equipment. personnel) for producing or acquiring wealth with a view to earn
profit in an enterprise. Scope of business organization. Business organization thus is a process or an
art of establishing effective cooperation between the factors of production (land, material, capital
equipment. personnel) for producing or acquiring wealth with a view to earn profit in an enterprise.

88. 
sole proprietorship is one person ownership without incorporation, e.g., corner
grocery store, a housekeeper, a plumber or dog groomer, Freelance writers, copy
editors, photographers and craftspeople,

partnership involves two persons or more in a business venture, e.g., lawyer
partnership, common forms of partnerships are law firms, doctors sharing a small
clinic or office, accountants and real estate partnerships. The partners share
proportionally the profits or losses.

A corporation is owned by many people, usually thousands of people through
"shares" which is basically a document saying you own a certain percent of a
company. The share holders hire "officers" to operate the business, and these
officers are people like managers and stuff like that. So in a corporation, the people
who own the business do not run it, instead hired officers run it. corporation is a
company with limited liability and shareholders, e.g., IBM or MacDonald Restaurants.
.

A cooperative (also referred to as a co-op)is a form of business ownership that
consists of a group of people who have joined together to perform a business function
more efficiently than each individual could do alone. The purpose of a cooperative is
not to make a profit for itself, but to improve each member's situation. However,
members of certain types of cooperatives do make a profit by selling their product
and/or service to customers who are not co-op members. Cooperative Business is an
association of people who are united voluntarily to meet common social, cultural and
economic needs. This is done by a jointly owned enterprise.

89. Management
The efficient and effective operation of a business, and study of this
subject, is called management. The main branches of management are
financial management, marketing management, human resource
management, strategic management, production management, operation
management, service management and information technology
management
Organizing a business
The major factors affecting how a business Is organized are usually
The size & scope of the business , and its anticipated management &
ownership. Generally a smaller business is more flexible ,while larger business ,or
those with wider ownership or more functional structures, will usually tend to be
organized as partnership or( more commonly) corporations .In addition ,a business
which wishes to raise money on a stock market or to be owned by a wide range of
people will often be required to adopt a specific legal form to do so