Size of the firm or scale of its operation is another important decision to be taken at the start of the business. (iii) Sale or exchange of goods and services: Directly or indirectly, business involves transfer or exchange of goods and services for value. Most of these goods are manufactured and supplied in the market by numerous firms — big or small. (c) It indicates the efficient working of business. Worker’s performance and attitudes determine their contribution towards productivity and profitability of any enterprise. Go to NCERT Solutions of Business Studies Class 11th When goods are purchased and sold in bulk, it is known as wholesale trade. Productivity is ascertained by comparing the value of output with the value of inputs. Although earning profit cannot be the only objective of business, its importance cannot be ignored. These are unforeseen events like political disturbances, mechanical failures such as the bursting of boiler, fluctuations in exchange rates, etc., which lead to the possibility of business risks. The business activities can be classified as: → Industry: It refers to economic activities, which are connected with conversion of resources into useful goods. Thus, for promoting sales, information about the goods and services available, their features, price, etc., must reach potential buyers. Business is considered to be an economic activity because it is undertaken with the object of earning money or livelihood and not because of love, affection, sympathy or any other sentimental reason. Business refers to those economic activities, which are connected with the production or purchase and sale of goods or supply of services with the main object of earning profit. Objectives refer to all that the business people want to get in return for what they do. Disclaimer | But there are a lot of activities that are required to facilitate the purchase and sale of goods. Secondary industries may be further divided as follows: These industries are engaged in producing goods through processing of raw materials and thus creating form utilities. One of the objectives of business is to earn profits on the capital employed. An objective is the starting point of business. 4. Thus, business means being busy. It indicates the efficient working of business. Provision of goods and services to the public. must be protected against fire, theft and other risks also employees are required to be protected against the risks of accident and occupational hazards. Therefore, every enterprise must aim at improving its workers performance. (ii) Risk is an essential part of every business: Every business has some risk. These days’ goods are produced on a large scale and it is difficult for producers to themselves reach individual buyers for sale of their products. Activities which are meant for assisting trade are known as auxiliaries to trade. Advertising provides information to the consumers. 7. Business risk is not likely to arise due to. Manager performance and development, therefore, is an important objective. Generally, the term industry is used for activities in which mechanical appliances and technical skills are involved. 6. Commerce provides the necessary link between producers and consumers. These are called services or auxiliaries to trade and include transport, banking, insurance, communication, advertisement, packaging and warehousing. (iv) Profit is the reward for risk taking: ‘No risk, no gain’ is an age-old principle which applies to all types of business. No business can survive for long without earning profit. In every society people undertake various activities to satisfy their needs. Studyrankers is a free educational platform for cbse k-12 students. State the different types of economic activities. (b) It can be a source of finance for meeting expansion requirements of business. Each form has its own merits and demerits. It includes both, buying and selling of goods as well as auxiliaries such as. They may even be inclined to exploit various sections of society to earn immediate profit. Industries may be divided into three broad categories namely primary, secondary and tertiary. → Degree of risk depends mainly upon the nature and size of business. With the help of Notes, candidates can plan their Strategy for particular weaker section of the subject and study hard. Business risks arise due to a variety of causes including natural, human, economic and other causes. Profit is found to be a leading objective but not the only one. Membership of a professional body and certificate of practice. Performing work as per service contract or rules of service. The best app for CBSE students now provides Nature and Purpose of Business class 11 Notes Business Studies latest chapter wise notes for quick preparation of CBSE exams and school based annual examinations. What is the role of profit in business? No business can altogether do away with risks. These industries process such materials to produce goods for final consumption or for further processing by other industrial units. Extractive industries supply some basic raw materials that are mostly products of geographical or natural environment. This may further be divided into. Synthetical industry which combines various ingredients into a new product, as in the case of cement. Why is business considered an economic activity? Entrepreneur’s decision and other legal formalities, if necessary.