Human Activities

In every society people undertake

various activities to satisfy their
needs.
These activities can b broadly
be classified in two groups:
 ECONOMIC ACTIVITIES
 NON ECONOMIC ACTIVITIES
ECONOMIC ACTIVITY
 Economic activities are those by
which we can earn our livelihood.
OR
 Keeping yourself engaged to earn
something in return is economic
activity.
 e.g. doctor, teacher, driver, sweeper
or clerk are all engaged in economic
activities.
NON ECONOMIC
ACTIVITY
 Activities which do not have any economic
motive and are performed with a feeling
of love, sympathy, humanity and
patriotism
are known as non-economic activities.
e.g. playing, dancing, giving donation, a
housewife cooking food for family, or a
boy
helping an old man cross the road etc.
TYPESOF ECONOMIC
A
C TIVITIESactivities may be further divided into three
Economic
categories:
1. Business
2. Profession
3. Employment
 Busines
 The term Business is derived from the word ‘busy’.
Thus, business meanss being busy.
 However, in specific sense, business refers to an
occupation in which people regularly engage
themselves with a view to earn profit.
 Business involves production or purchase or exchange
of goods and services to satisfy the needs of people
with aim to earn profit.
 The persons who are engaged in business are called
entrepreneurs.
 PROFESSIO
N activity which requires
 Profession refers to the
special knowledge and skills to be applied by an
individual in his work to earn a living. E.g. doctor,
lawyer, teacher, nurse.etc.
EMPLOYMENT
 Employment refers to an activity in which a person
works regularly for another for a fixed
remuneration. E.g. People who work in banks,
insurance companies, or
government departments, as managers,
assistants, clerks, peons, or security guards.
CHARACTERISTICSOFBUSINESS
ACTIVITIES
1. An economic activity.
2. Production or procurement of goods and
services.
3. Sale or exchange of goods and services for the
satisfaction of human needs.
4. Dealing in goods and services on regular basis.
5. Profit earning.
6. Uncertainty of return.
7. Element of risk.
COMPARISON OF BUSINESS,
PROFSSION AND EMPLOYMENT
1. Mode of establishment:
 Business is established when the entrepreneur
decides.

 Profession is started after getting the

certificate of practice from the professional
body.

 Employment begins after getting the

appointment letter from the
employer.
2. Nature of
work:
 Business includes buying and selling of
goods and services.

Profession involves rendering personalized

services of expert nature.

Employment includes performing the work

as per the service contract.
3.
No minimum qualification is required for
Qualification:
business.

A professional degree in a specific field

is required for profession.

An employee needs the qualification and

training as prescribed by the employer.
4. Return of
reward:
 Business gets the return in the form of
profit.

 Professionals charges fees for their

services.

Employees get the salary or wages in return

for their work.
6.
Risk:
In business, profits are uncertain and
irregular; so risk is present.

Professionals face less risk ; as the fee

charged is generally regular and
certain.

No risk is there in employment; as they get

a fixed and regular pay.
7.Code of
conduct
 No code of conduct is prescribed in
business.

Professional code of conduct is to be

followed.

Norms of behavior laid down by

the employer are to be followed.
5. Capital
investment:
 Business needs investment as per its
size and nature.

Only initial investment is required in case

of profession.

No capital investment is needed for

employment.
FACTORS TO BE CONSIDERED
WHILE STARTING A BUSINESS UNIT
1. Selection of line of business
2. Size of the firm
3. Choice of form of ownership
4. Location of business enterprise
5. Availability of finance
6. Physical facilities
7. Plant layout
8. Competent and committed work
force
9. Tax planning
10. Launching of enterprise
 BUSINESS
 The term business risk refers to the possibility of
RISorKeven losses due to
inadequate profits
uncertainties or unexpected events.
 Busniess enterprises constantly face two types of
risks:
specultive risk and pure.
 Speculative risk– involves both the possibility of
gain as well as the possibility of loss.Examples-
change in demand and supply, chages in fasion and
taste of consumers etc.
 Pure risk involve only the possibility of loss or
no loss. Example- the chance of fire, theft or
 NATURE OF BUSINESS RISK
1. Business risk arise due to uncertainties.
2. Risk is the essential part of business.
3. Degree of risk depends upon the nature and
size of business.
4. Profit is the reward for risk taking.
Causes of business
risks
i. Natural causes – natural calamities like flood, earthquake,
heavy rains
lightning,
etc.
Human causes – dishonesty, carelessness or negligence
ii. of employees, stoppage of work due to power failure,
strikes, management efficiency.
iii Economic causes– uncertainties relating to demand for
. goods, competition prices, collection of dues from customers,
change of technology or method of production.
iv. Other causes– political disturbance, mechanical failure etc.