Business: Meaning, Characteristics and Objectives

After reading this article you will learn about:- 1. Meaning of Business 2. Definition of Business 3. Characteristics 4. Objectives.

Meaning of Business:

The word ‘business’ literally means ‘a state of being busy’. Every person is engaged in some kind of occupation: a worker works in a factory, a teacher teaches in the class, a clerk does his office work in a office, a farmer does his work in the field, and a salesman is busy in making the sales of the goods. The primary objective of these persons engaged in different works is to earn their livelihood.

All human activities relating to the production of goods or services for satisfying human wants are called ‘Business’.

Human activities may be of two kinds:

(i) Economic, and

(ii) Non-economic.

Economic activities are those activities which are related to the production of wealth. Every person is engaged in some kind of work to earn his living. All these activities create utilities.

Non-economic activities are those activities which are in the form of social service etc. These activities are not undertaken with economic objectives. In other words, the element of ‘profit’ is not found in these activities.

Definition of Business:

Some of the important definitions of business are given below:

1. According to L. H. Haney, “Business may be defined as human activity directed towards producing or acquiring wealth through buying and selling of goods.”

2. According to Prof. L. R. Dicksey,”Business is a form of activity pursued primarily with the object of earning profits for the benefit of those on whose behalf the activity is conducted.”

3. According to Wheeler, Bayard O., “Business is an institution organised and operated to provide goods and services to society under the incentive of private gain.”

4. According to Peterson and Plowman.”Business maybe defined as an activity in which different persons exchange something of value, whether goods or services for mutual gain or profit.”

5. According to F. C. Hooper,”Business means the whole complex field of commerce and industry, the basic industries, processing and manufacturing industries and the net-work of ancillary services, distribution, banking, insurance, transport and so on, which serve and inter-penetrate the world of business as a whole.”

Characteristics of Business:

(i) Business activities are directly or indirectly concerned with the transfer or exchange of goods and services for value.

(ii) Business consists of dealings in goods and services.

(iii) Business means exchange of goods and services undertaken continually or at least recurrently.

(iv) Business is a human activity directed towards the acquisition of wealth.

(v) Element of risk that is possibility of loss arising out of the uncertainty that goes with the profit expected from a business activity.

Objectives of Business:

(i) Organic Objectives:

To try for survival, and then to gain prestige and win recognition from the society and thus try to grow.

(ii) Economic Objectives:

To earn as much profit as possible.

(iii) Social Objectives:

Business must fulfill its obligations to society, by way of supply of quality goods, avoidance of profiteering and antisocial practices, and providing em­ployment.

(iv) Human Objectives:

These are:

(a) Fair deal to employees,

(b) Development of human resources,

(c) Participation, and

(d) Job satisfaction.

(v) National Objectives:

These are:

(a) Ensuring social justice,

(b) Development of small enterprises,

(c) Production according to national priorities,

(d) Self-sufficiency and export development, and

(e) Development of skill of personnel.