BUSINESS AND ITS FEATURES [ Read or Print]


Q. : What is Business. Discuss the
Characteristics / Features / Properties of business.
ANS:
CONCEPT OF BUSINESS:
Literally, the word
“business” means the state of being busy. 
Generally, the term business includes all human activities concerned
with earning money. In other words, business is an activity in which various
persons regularly produce or exchange goods and services for mutual gain or
profit.   The goods and services produced
or purchased for personal use are not included in “business”.
DEFINITION
1.  W. W. Perlick:
“Business is the
economic activity of providing goods activity of providing goods and services
to others for a financial return.”
2.   According to L. H. Haney
Business may be defined as human activities directed toward providing or
acquiring wealth through buying and selling of goods.”
3.        James Stephenson says that:
“Every human activity
which is engaged in for the sake of earning profit may be called business.”
FEATURES OR CHARACTERISTICS
1. MANAGEMENT:
Business may be
started at small or large scale. It may be at country level or international
level. It may be in the shape of retail shop or at whole sale basis. There is
no condition for the size of business activity.
2.
CREATION OF UTILITY
Utility is an economic
term referring to that characteristic of a certain commodity, which can satisfy
any human need.  Business creates
utility, which gives benefit to the entire society
as well as the
businessmen.
3.
DEALING IN GOODS AND SERVICES
Every business deals
with sale, purchase, production and exchange of goods and services for some
consideration.
4. SATISFACTION
OF HUMAN WANTS:
Business provides
those goods and services, which are demanded by the consumers. In this way it
earns profit through the satisfaction of human wants. So the satisfaction of
human wants is another feature of the business activity.
5.
ISLAMIC PROCESS:
Business is an Islamic way of earning living.  Income from business is known as profit,
which is Rizq-e-Halal. The Holy Prophet Muhammad himself did prosperous
business.
6.
PROFIT MOTIVE:
Business is started for the sake of profit in private sector. Profit motive
is driving force that puts the men, machines, material, methods, markets and
money on work. All successful activities earn profit for the business.
7.
ORGANIZATION STRUCTURE:
Success of business is
possible through sound organization structure. The whole amount of work is
divided into departments or sections. The employees are hired for each department.
The employees are placed on jobs according to their abilities.
8.
PRODUCTIONS OR PURCHASE OF GOODS
A businessman deals in
production or purchase of goods.  These
goods are supplied to the people.  So, it
is necessary that more goods should be produced so that demand of people may be
fulfilled.
9.
REGULAR ACTIVITY OR TRANSACTIONS:
Business has a nature
of regular dealings and series of transactions. 
Only single transaction cannot be treated as business. Those transactions
come under the scope of business, which are done repeatedly. So business
activity is necessarily started on regular basis for profit earning.
10.
RISKS AND UNCERTAINTY
Business involves a
large volume of risk and uncertainty. 
The risk element in business keeps a person vigilant and he tries to ward
off his risk by executing his policies properly.
11.
LIABILITY OF OWNERS:
The liability of the
owners of the business depends upon the form of business organization. If it is
sole proprietorship or partnership, the liability of the owners is unlimited
but if it is Joint Stock Company the liability is limited.
12.
Social Welfare
Business does not only
satisfy the producer, but also the consumer when products are offered for sale
at low prices in markets.
13.
Employment
Business is a good
source of employment for its owners as well as for other people, for example,
employees, agents, transporters etc.
14. Capital:
Capital is the lifeblood
of every business. It is the most essential and important element of business.
In case of deficiency, loans can be taken from various financial institutions.
15. Element of Competition:
The element of competition is also found in every business. But the level
of competition may be different depending upon the size and nature of the
business transactions.
16. Public Support is Essential:
Public support is
essential for business. There must be positive response form general public at the
time of increase in price or shortage of product. Business cannot afford
boycott of products.
17. INVENTIONS ARE POSSIBLE:
Inventions are
possible in business. The new products are the result of inventions. The new
models of products are available due to innovations. Thus inventions are the
life bloods of business.
18. CULTURE IS FOLLOWED:

Culture is a system of
values and norms that are shared among a group of people and represent a design
for living. The goods and services must meet the cultural needs of people. The businessmen
cannot overlook culture of consumers.

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