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Objectives of business

Every business
Every business must enterprise must aim
earn a reasonable at greater
profit to survive and productivity to
grow. ensure continuous
survival and growth.

It refers to the Economic

position of an It means
enterprise in relation objectives introduction of
to its competitors. new ideas or
methods for
producing goods
and services.

Physical & financial

Business requires physical resources and financial resources to
produce goods and services.


Economic activities


Human activities
Non Economic

When a teacher is
teaching in a
school and gets
salary, it is an
economic activity
but when a teacher
is teaching her
son/daughter at
home, then it is a
Comparison of business, profession and

• Accounting(C.A)
• doctor
Business Employment
• Farming • Workers
• banking • employees

Differentiation between economic and non-economic

Basis Economic Activities Non-economic Activities

Meaning Economic activities are those by which we Non-economic activities are

can earn our livelihood. those performed out of love,
sympathy, sentiments,
patriotism etc.

Purpose/Moti These activities are under taken to earn These activities are
ve/Expectatio money and to create wealth. undertaken to satisfy social,
n. psychological and emotional

Examples • A worker working in a factory. • A housewife cooking food

• A doctor operating in his clinic. for her family.
• A teacher teaching in a school. • A boy helping an old man
cross the road.
• A person goes to temple to
offer his prayer.

Outcome Production, distribution and consumption Mental/psychological

of goods and services. satisfaction.

Types Business, profession and employment . Religious, social, parental and

patriotic activities.
Business should
A businessman should
produce and sell
avoid hoarding, black
products of proper marketing, over
quality to satisfy charging, misleading
custmer expectations advertisements etc.

Business should
Large business units Social employment
opportunities to the
should undertake
community services objectives disadvantaged
sections of the
like setting up society(e.g.
charitable physically
dispensaries, handicapped
schools etc. people).

Welfare of
Business should provide good working conditions and
pay satisfactory wages/salaries to its employees.
• Business provides jobs to the
population who in turn are able
to buy goods and services.
Businesses pay taxes, that
finance government spending for
infrastructures and operations.
Goods produced and services
rendered satisfy the needs of
• Business introduce new
products and innovations that
improve the standards of living.
Economic competition drives
business to act socially desirable
manner. Many exercise
corporate social responsibility,
also referred to as service
beyond profit.
Comparison of business, profession and

• Accounting(C.A)
• doctor
Business Employment
• Farming • Workers
• banking • employees

The Role of Business in Society
•Only business can create prosperity
•Healthy businesses need a healthy
• community
The Role of a Company in Its
Evolving Approaches
Source of income for Source of funds for business
businessmen growth
• As a source of income for the • Profits can be a source of finance for
businessmen, profit provide the meeting growth and expansion
means of livelihood for them. requirements of business.

Role of profit
in business
Index of performance Reward of risk taking
• Profits indicate whether a business is • It is in the hope of earning sufficient
being managed efficiently or not. It is profits that a businessman invests
a measure of performance and money in business and undertakes
success of a business. risks. profit is essential for covering
costs and risks of the business.

Secondary Tertiary
industry industry

These industries These industries These industries

are connected are concerned provide service
with: with : facilities.

using the materials

The extraction Reproduction extracted at the
primary stage to
and production and development produce goods for final
of natural of living consumption of for
resources organisms . further processing by
other industrial units.

Extractive Genetic

These industries extract Genetic means heredity or

or draw out various parentage. these industries
products from natural involve breeding or reproduction
resources. of plants and animals.

Farming Mining Fishing breeding

Manufacturing Construction
industry industries

These industries are engaged in construction

These industries convert raw of buildings, bridges, roads, dams, canals etc
materials or semi-finished products using the products of extractive and
into finished products. manufacturing industries like bricks, sand,
cement, Iron and steel wires etc.

Analytical industry: Synthetical industry: Processing industry: Assembling industry:

basic raw material is two or more materials involves successive various components or
analysed or separated are combined or mixed stages for parts are brought
into a number of together to manufacture manufacturing finished together to produce a
products. a new product. products. finished product

An oil refinery
Cement, soaps, TV, car,
separates crude Sugar,
oil into kerosene, plastics, paints, computer,
diesel, petrol. fertilizers etc. paper watches etc.

Auxiliaries to
trade trade

Trade refers to buying and Activities which are meant

selling of goods and for assisting trade are
services with the objective known as auxiliaries to
of earning profit. trade.
Types of

External trade: which takes

Internal trade: which takes
place between two or more
place within a country

Wholesale Retail Import Export Entrepot

trade trade trade trade trade

Wholesale trade refers to Retail trade refers to If goods are If goods and Where goods are
buying and selling of goods buying of goods and purchased from services are sold to imported for export
and services in large services in relatively
quantities for the purpose small quantities; and
another country, it other countries, it to other countries,
of resale or intermediate selling them to ultimate is called import is called export it is called entrepot
use. consumers. trade. trade. trade.
Auxiliaries to trade
Transport and Banking and Warehousing Advertising
communication finance • It refers to the • Advertising brings
• Transport(road,rail or • Business needs funds holding and goods and services to
coastal) facilitates for acquiring assets, preservation of goods the knowledge of
movement of –raw until they are finally prospective buyers.
purchasing raw
materials to the place materials and consumed. • With the help of such
of production,and –the • It helps business knowledge, consumers
meeting day-to-day
finished goods from can obtain better value
expenses. firms to overcome
factories to the place of for their money
consumption • Necessary funds can the problem of
be obtained by storage of goods and • Thus, advertising helps
• Communication to promote the sale of
businessmen from facilitates the
facilities like postal products like electronic
services and telephone commercial banks. availability of goods goods, automobiles,
facilities enable • Thus banking helps when needed. soaps etc by providing
businessmen to business activities • Warehousing creates information about
exchange information overcome the time utility. them.
with one another. problem of finance.
Answer the following not less than 5
sentences each item
1. Discuss purpose and importance of
the business
2. Compare economic and non-
economic activities of business