Business organisation & system

Business organisation & system

1. Copyright © 2004 Pearson Education, Inc. Slide 6-1
Business:
Concept, Scope
& Importance
By
BBA –1
st
Sem

2. Ground Rules

3. Ground Rules
Enjoy
Learning

4. Copyright © 2004 Pearson Education, Inc. Slide 6-4
Unit 1
Nature of Business

5. Learning Objectives
• Introduction
• Economic & Non-economic Activities
• Concept of Business
• Comparison between Business ,Profession ,Employment
• Nature & characteristics of Business
• Scope of Business
• Objectives of a Business System
• Structure of Business
• Requisites of success in Modern Business
• Qualities of successful businessman

6. Copyright © 2004 Pearson Education, Inc. Slide 6-6
Overview
Business

9. (-sainp1dBtBdBc,n Human Activities 4pU - -Osr - vpri
Cropapopsn )
(i)non-economic
activities.sr - vpriCropapopsn n
economic activities
1. Ex. The work of a farmer,
manufacturer, teacher, doctor,
trader etc.
2. They are primarily concerned
With the production, distribution
and consumption of goods and
Services.
3.Economic activities are
undertaken to earn one’s living and
for the production of wealth.
1. people also undertake a
number of activities for
mental satisfaction. They
engage in charitable work,
practice religion, undertake
recreational activities and also
do many things out of love for
others or out of patriotic
feelings.
2.These activities are
undertaken not for any
material reward or gain but for
one’s happiness, pleasure or
satisfaction which can not be
measured in terms of money.

14. Differentiation between economic anD non-economic
activities.

15. State whether the following statements are true or false by
writing ‘T’
against true statement and ‘F’ against false statement.
i. A doctor attending to patients in his/her clinic is engaged in
an
economic activity.
ii. A mother stitching clothes for her children is engaged in an
economic activity.
iii. A tailor stitching clothes for his customers is engaged in an
economic activity.
iv. Distributing food to beggars outside the temple is a
noneconomic activity.
v. Sachin Tendulkar playing cricket for the country is performing
a non-economic activity.

16. State which of the following activities are
economic and which are
non-economic :-
i. Playing football with friends.
ii. Teaching in a school.
iii. Attending to one’s relative who is unwell.
iv. Listening a radio.
v. Selling fruits and vegetables in the local
market.
vi. Preparing food at home for family members.
vii. Working in an office.

17. Define ‘economic activities’.
______________________________________________________________
______________________________________________________________
2. Below are given certain non-economic activities. Convert them into
economic activities.
Example: A nurse attending her ailing son. (Non-economic activity)
A nurse attending patients in her hospital. (Economic activity)
(a) A person working in his own garden.
___________________________________________________________
(b) A lady preparing food for her husband.
___________________________________________________________
(c) A man white-washing his own house.
___________________________________________________________
(d) A teacher teaching his son at home.
___________________________________________________________
(e) A chartered accountant preparing his own accounts.
___________________________________________________________

18. Concept of Business
Customer
oriented
concept of
Business
Social or
Modern eclectic
concept of
Business
Profit oriented
concept of
Business

19. Profit oriented concept of
Business
According to this concept business is a
wealth producing or profit making economic
activity.
Also known as Traditional concept of
Business.

20. Customer oriented concept
of Business
According to this concept business should be
done for mutual benefits of both business
organizations & customers.
Business should earn profits through service
and satisfaction of the customers.
Customer as the king of the market.

21. Societal or Modern eclectic
concept of Business
This concept emphasis on social
responsibility of business.
Societal concept of business holds that every
business organization should determine the
needs, wants and interest of the customers
and deliver the desired satisfactions
effectively & efficiently in such a way that
contributes to the customer’s and society’s
well being.

22. Meaning & Definition of
Business
Customer
oriented
definitions
Societal
definitions or
Modern eclectic
definitions
Traditional or
Profit-making
economic
activity based
definition

23. Traditional or Profit-making
economic activity based definition
Meaning- Business is a wealth producing or
profit-making economic activity by production
and/or distribution of goods/services.
Definition- According to Haney, L.H.,
“Business is a human activity directed
towards producing or acquiring wealth
through buying and selling of goods.”

24. Customer oriented definitions
Meaning- Businessman were forced to lay
emphasis on customer service and
satisfaction because of emergence and
development of consumerism.
Definition- According to Hopkins, Duff et. al.,
“Business is a organized activities designed
to satisfy people’s want for goods & services.”

25. Societal definitions or Modern
eclectic definitions
Meaning- Business is defined as social point
of view along with the customer service &
satisfaction.
Definition- According to Buskirk, Green and
Rodgers, “Business is a system created to
satisfy society’s needs & desired.”

26. Societal definitions consists of
the following 3 aspects
Satisfaction of customers’ needs and wants
by providing goods and services.
Improving the standard of living and quality of
life of the members of the society.
Earning profits.

27. CHARACTERISTICS OF
BUSINESS . 1 u r d B
& m l 4 1 & - l a 1 v
/ c 1 B 1 r a - B u a u r
Basic or
Fundamental
Characteristics3 d 4 - B l
/ c 1 B 1 r a - B u a u r
Modern
Characteristics

28. Basic or Fundamental Characteristics
1.Economic activity of a person or group of
persons
2.Production of goods or services
3.Exchange of goods or services
4.Creation of utilities
5.Recurrence of transactions or exchanges

29. Basic or Fundamental Characteristics
6. Legality
7. Profit objective
8. Risk & Uncertainty
9. Entrepreneurship
10. Capital

30. Modern Characteristics
1.Pluralistic institution
2.Institutional Framework
3.Global organization
4.Profit through customer and social well-
being
5.Capital intensive
6.Growth of service sector
7.Increasing trend of combination

31. Modern Characteristics
7. Increasing trend of combination
8. Increasing competition
9. IT revolution
10. Growing concern for environment
11. Expansion of e-business
12. Both an art and science
13.Regulation and control of business

33. 1. Economic activity of a person
or group of persons
The business may be carried on by a natural
or artificial person e.g. companies,
corporations etc.

34. 2. Production of goods &
services
Production is the process of transportation of
set of resources or raw material into
something with greater value which the
members of society need.
Goods produced may be Consumer goods or
Producer goods.

35. Consumer goods
are those goods which
are used or consumed
by the individuals.
Bread, butter, sugar,
shampoo, stationary
items, shoes, scooter,
car etc.
Producer goods are
those used or
consumed in the
process of production
or manufacturing by
the producers or
manufacturers.
Industrial dyes and
chemicals, industrial
machineries and
equipments, fertilizers,
pesticides etc.

36. 3. Exchange of goods &
services
Supply of goods for
services
Offer & acceptance
for purchase or sale
of valuable goods
or services

Customer
Businessman or
Business
organization
Payment of price
or
Promise to pay
Exchange process between Buyer & Seller

37. 4. Creation of utilities

38. a) Form Utility
Form utility is created by production or
manufacturing of goods by converting raw
materials.
Production of car or steel furniture by
converting steel.
Raw Material
Production of
goods

39. b) Place utility
Place utility is created by exchange and
delivery of goods where customer wants.
Goods that are lying at a factory do not serve
the needs of a customer.
Transportation also help in the exchange
process.

40. c) Time utility
Time utility is created by providing goods at a
time when they are needed.
Warehousing and transport services of
business create time utility of goods.

41. d) Ownership utility
Ownership utility is created by exchange of
goods at a price.
The retailing and wholesaling activities of
business create such value by exchanging or
selling goods for a price.

42. e) Possession utility
Possession utility is created by providing
goods to customers for their use on hire or
rent and get back when their purpose is
accomplished.
Business organisations that provide goods or
articles such as car, scooter, cycle, books
etc. on hire for use of the customers create
the possession utility.
In this case, customer do not become owners
of the things given on hire or rent. Legally it is
called Bailment of goods.

43. f) Task utility
Task utility is created by providing services to
customers that help in performing their task.
Banking, insurance, telephone, transport
services etc. create/ provide task utilities to
customers

44. g) Knowledge utility
Knowledge utility is created by dissemination
of information and knowledge to the society.
 educational and research institutions,
publication houses, electronic media etc. are
run by business organizations which provide
vast amount of knowledge to the society.

45. 5. Recurrence of transactions or
exchanges
Production and exchange of goods & services
on a regular basis.
Continuity or recurrence of production and
exchange of goods or services is the hallmark
of business.

46. 6. Legality
The business should be conducted in
accordance with the legal framework of the
country.
The production or exchange of goods against
the law of the land (selling of smuggled or
stolen goods) can not be covered under the
scope of business.

47. Profit objective
Where any economic activity is carried on
without the objective of earning profits, it
cannot be said to be a business.
Every economic activity to be called a
business must have one of its objectives to
earn profits.
Profit is essential for survival, growth and
expansion of the business.

48. Risk or Uncertainty

49. Change in the laws, rules, regulations
relating to the business
Dispute between the business partners,
associations and the third parties
Natural calamities and catastrophes
Human misconduct e.g. fraud, theft etc.

50. 9. Entrepreneurship
Entrepreneurship is the ability to take risk.
Without entrepreneurship, no business can
be started and operated.

51. 10.Capital
Capital is also one of the basic requirements
of Business.
It is not possible to run a business without
capital.

53. 1. Pluralistic Institution
 The conduct & success of business depends
on the efforts and cooperation of various
sections of public.
These include entrepreneurship, investors,
shareholders, managers, employees,
government, consumers, suppliers and other
sections of public.

54. 2. Institutional framework
Today the partnership, companies or
corporation are formally registered with the
proper authorities for carrying on the
business activities.
Even individuals today generally do the
business by creating formal organizational
framework.

55. 3. Global organisations
Many global or transnational and
multinational business organisations have
emerged and developed in the modern era.
A multinational corporation or company (MNC) is
one which has its headquarter in one country but
operates its business in two or more other
countries.
A global or transnational corporation is one that
has worldwide network of integrated production
and marketing operations and its managers view
the whole world as one market.

56. 4.Profit through customer and
social well-being
The modern business regards that;
It is an organ of society and
consequently it is a part of the society.
It exists for creation and satisfaction of
customers.
It owes certain social obligations
towards the society.
It must serve as an instrument of social
change.

57. 5.Capital intensive
More and more capital is being invested in
business activities.
Foreign direct investments are being made.
Labour intensity in business has reduced
over the time.

58. 6. Growth of service sector
In the past few years, the business in service
sector has grown tremendously.
Industrial growth is increased and it indicates
that in modern times share of service sector
in business is growing at a faster pace.

59. 8. Increasing competition
During the recent years, the competition in
the business is increasing day by day due to
liberalization and globalization policies.
Fair competition has always been good to
both the business and society.
Consumers have more options to buy than
before.

60. 9. IT revolution
Business has led to the information
technology revolution.
Today, most businesses are computerized.
 It has, therefore, made it possible to store,
analyze and transmit vast amount of data.
Managers can manage their business
operations in any part of the world from their
head office.
Lakhs of on-line transactions take place every
day all over the world.

61. 10. Growing concern for
environment
Business world has realized the significance
of clean and healthy environment for the well-
being of the society.
Government laws, policies and rules have
also compelled the business houses to adopt
such products and practices that help reduce
pollution and ecological imbalances.
The business houses have started producing
eco-friendly products and using eco-friendly
packaging materials.

62. 11. Expansion of e-business
People are buying and selling products and
services through the internet.
Lakhs of transactions are completed
everyday through the internet all over the
world.

63. 12. Both Art & Science
Business is an art because application of skills is
essential for doing business.
Business is a science because it is conducted on the
basis of scientifically developed principles and
procedures.
Doing business is both an art and science because it
is conducted by applying scientifically developed
principles skillfully.
Conducting business is a art, and the knowledge &
principle underlying the conduct of the business is
science.

64. 13. Regulation & control of
business
Competition act, FEMA, micro, small and
medium enterprises development act or
MSMED act, SEBI act, IRDA act, TRAI act
etc. are some statutes promulgated by the
government with a view to regulate the
various activities of business in the country.

67. Types of Economic Activities
When a person is regularly engaged in a
particular economic activity, it is known as his
or her occupation or vocation. Occupations
may be classified into three categories —
(i) Business,
(ii) Profession and
(iii) Employment (Service).

70. Profession
A profession may be defined as an
occupation which involves the rendering of
personal services of a specialized nature,
based on professional knowledge ,education
and training.
It requires a systematic and specialized body
of formal knowledge and training for its
practice.
Doctors, lawyers, professors, engineers etc.
are the professionals.

72. Employment-
Where a person is employed under a contract
by another person or an organization for a
specified remuneration, he is said to be under
the employment or service of that another
service.
Employment Service or employment involve
working under a contract by another person
or an organization for or under someone
known as the employer in return for wages or
salary .

81. 1. Define the term ‘profession’ in your own words.
______________________________________________________________
2. Following is a list of activities. Classify these activities as Business, Profession or
Employment by putting their number in the circles provided at the end of the question.
(a)Policeman on duty at your local police station.
(b) Teacher working in an educational institution.
(c) A driver driving a bus of a State Road Transport Corporation.
(d) A taxi-driver who runs his own taxi.
(e) A fisherman selling fish in a village.
(f) Gopal stitching cloth of the customers regularly at home.
(g) A daily-wager working in a factory.
(h) A gardener maintaining the lawns in a college.
(i) A lawyer practising in a court.
(j) An engineer running his consultancy firm.
Business Profession
Employment

82. Scope of Business
All the activities that are performed by
industrial, commercial and service
organizations may be covered within the
scope of business. Like distribution, banking,
insurance, transport and so on.
The business activities may broadly be
classified under the following three groups:-
i. Industry
ii.Commerce
iii.Direct services/ service industries

83. Business
Commerc
e
Direct
services
Industry
Manufacturing
Constructive
Genetic
Extractive
Primary
Assembly
Processing
Synthetic
Analytical
Auxiliaries to
Trade
Trade
Insurance
Warehousing
Transportation
External
Internal
Entertainment
Hotel,
Restaurant
Medical
Health & beauty
Transport/tour ser.
Banking
Services
Insurance
Services
Retail
Wholesale
Import
Export
Extrepot
Promotional
Services
Mercantile
Agents
Banking

84. Industry
It is concerned about the production or
manufacturing of goods for final consumption
or further production.
Industry can be consumer goods industry or
producer goods industry.
Where goods produced by one industry &
consumed by another industry, it is known as
intermediate goods. Ex. Cotton, synthetic
yarn, plastic sheets & granules, steel &
aluminum sheets industrial chemical.

85. 1. Primary industry
It is the industry that is engaged in production
of primary goods such as food grains, cotton,
vegetables, fruits etc. on commercial basis.

86. 2. Genetic Industry
Which is engaged in breeding and
reproduction of plants, animals and other
creatures on commercial basis.
E.g. Plant breeding, dairy farming, poultry
farming, bee-keeping, sericulture etc.

87. Extractive Industry
Which is engaged in extraction of materials
from land, sea, air etc.
Extraction of minerals e.g. iron, zinc, gold,
gas stones (including precious & semi-
precious), fishing and extracting materials
from sea etc. are some of the activities of the
extractive industry.

88. Construction Industry
Which is engaged in construction of roads,
building, bridge, fly-overs, airports, industrial
estates, railway lines and yards, dams,
canals etc.
The products of this industry are immovable
property.

89. Manufacturing Industry
Which is engaged in production of goods by
converting raw-material into products for the
use or consumption by ultimate consumers or
producers.
Manufacturing industries generally create
form utility in the product.
This industry may be subdivided into following
categories:-

90. Analytical Industry
It is engaged in analyzing some basic
material in order to separate different
products associated or mixed in it.
E.g. Crude oil is analyzed in oil refinery with a
view to separate from it the petrol, diesel,
kerosene, lubricants etc.

91. Synthetic Industry
Synthetic industry is engaged in synthesizing
or mixing two or more materials with a view to
manufacture a new product.
E.g. Cosmetics, soaps, shampoo, medicines,
fertilizers, artificial fiber, paints etc.

92. Processing Industry
Processing industry is engaged in processing
of raw material or producer goods through a
series of manufacturing processes in order to
produce some new product.
E.g. Weaving or dyeing of clothes, production
of sugar, tea, paper, steel etc.

93. Assembly Industry
It is engaged in assembling various related
parts or components in order to make a
useful product.
E.g. watches, cycles, scooters, cars, TV sets,
computer sets, air conditioners etc.

94. Commerce

95. Trade

96. Internal Trade

97. Wholesale Trade
Where goods are purchased and sold in bulk.
A trader who is engaged in wholesale trade is called
the wholesaler.
He is important link between the producer & retailor.
He buys goods from producers or manufacturers or
from their agents in large quantities and stocks them
in warehouse and sells to retailors in smaller
quantities.

98. Retail Trade
Where goods are sold to consumers or ultimate
customers in very small quantities it is known as the
retail trade.
Retail Trade is known as retailor.
A retailor is usually link between the wholesalers and
the ultimate consumers.
The large scale retailers are in the form of
departmental stores, multiple or chain shops, super
markets etc.

100. External or foreign Trade

101. Import Trade
When a trader buys goods in a foreign market
and brings them into his home country, it is
said to be import trade.
The buyer or importer has to pay the price of
the goods in foreign country.

102. Export Trade
When a trader sells his goods to a foreign
buyer to be taken out to his country, it is said
to be the export trade.

103. Extrepot Trade
When a trader imports goods from other
countries with a view to export them to
another country or countries, it is known as
extrepot trade. It is also known as re-export
trade.

104. Auxiliaries to Trade
The term ‘commerce’ includes auxiliaries to
trade. These activities or services facilitate
trade.
These services include transportation,
warehousing, insurance, banking, advertising
etc.

105. Transportation
Transport services creates the place utility in
the goods.
 Transport service provides facility of moving
the goods from the place of production to the
market place or the place of consumption.

106. Warehousing
The goods are produced in anticipation of future
demand. Moreover goods are produced seasonally
but are used through the year.
The goods produced are required to be stored and
preserved till the demand arise.
Thus warehousing is an activity that creates time
utility in the goods and removes the hindrances of
time by making the goods available when the goods
are demanded by the customers.

107. Insurance
Insurance is a device which protects the insured from
risks for a small amount of premium.
Risk of transit, theft, fire, natural calamities,
insolvency of debtors, dishonesty of employees etc.
are involve in the conduct of business.

108. Banking
Business involves the transaction of huge amount.
The payment of money in physical form is neither
possible nor convenient. Therefore, banking services
are essential for smooth functioning of trade.
Business requires huge amount of funds for its fixed
and working capital needs.
Banks by mobilizing savings of the public, make
available the needed funds.
The banking services removes the hindrance of
exchange & finance.

109. Mercantile Agents
Mercantile agents are service middleman who
provides services in the process of trade. They help
in buying & selling the goods.
They help establish a link between the producer/
supplier and the wholesale or retail buyers.
These agents are known by different names on the
basis of service they provide like factors, brokers,
forwarding and clearing agents, auctioneers etc.

110. Promotional Services
Promotional services includes advertising, sales promotion,
personal selling & public relations.
Advertising creates awareness among customers about the
availability of different products and their substitute products.
These also provide important information about the products
such as quality, price, features etc. of the products.
All promotional activities do create goodwill of the sponsoring
firm which, creates sustainable demand for its products.
The promotional service remove the hindrance of knowledge.

111. Direct Services or Service Industry
Services of barber, massage-man, washer man, doctor,
teacher, tailor, sweet seller, mechanic, rickshaw puller, carter or
Tonga driver etc. are now being provided by business
institutions on commercial footings.
These services are now being provided by haircutting salons,
health clubs and beauty parlors, restaurants, hotels, resorts and
catering firms, nursing homes, hospitals, medical institutions
etc., entertainment enterprises, garages for car, scooters etc.,
taxi, travel & tour operators, educational coaching institutions,
dry cleaning houses and so on.

112. Role/ Importance of Business
Business not only satisfies everyday needs but also
provides jobs and ever increasing standard of living
to all the members of society.
The role and significance of business may be
discussed under the following heads:-
 Importance for the national economy
 Importance for the society
 Importance for the consumers
Importance for the business organizations

113. Importance for the national
Economy
1. Proper utilization of natural physical resources-
It help in proper utilization of natural
resources like land, forests, rivers, minerals, livestock
etc.
Without business, a country’s resources of production
remain resources & never become products.
By proper utilization of natural resources, growth of
business is inevitable.

114. Importance for the national
Economy
2. Proper utilization of human resources-
Human resources plays a crucial role in
the development of a country.
Sound Business organizations can use this resources
effectively.

115. Importance for the national
Economy
3. Creates employment opportunities-
Business is capable of creating
employment opportunities for the people of the country.
All the business activities such as production,
marketing, finance, accounting, transportation, banking,
insurance, R & D, and so on have created many
employment opportunities.

116. Importance for the national
Economy
4. Helps increase productivity of resources-
Business devotes a huge amount of
money in R&D and innovation activities.
These activities usually find the new methods &
techniques that may contributes to efficiency and
effectiveness results into the higher productivity of
human, physical, financial and technological resources
of the nation.

117. Importance for the national
Economy
5. Encourage capital formation-
Formation of capital takes place in every
country but the rate of capital formation is higher in the
developed countries. It is because of the limited
capacity to save in the developing countries.
Developed businesses can increase the avenues for
income, savings & investment which may encourage
capital formation.

118. Importance for the national
Economy
6. Contributes to national planning-
Business can also contribute to the
planning process.
Business organizations can establish, expand &
diversify their business according to the priorities of the
national plans.
Business can also contribute to the success of national
plans by participating in the social plans such as plans
relating to health, education, rural development,
employment generation, population and pollution control
etc.

119. Importance for the national
Economy
7. Balanced economic development-
All parts of the country must be fully
developed.
Consumer goods industries as well as capital goods
industries must be developed.

120. Importance for the national
Economy
8. Helps reduce poverty and inequality-
Almost one- third of the country’s
population of our country is living below the poverty line.
Business can successfully fight against these problems
or diseases of the country.

121. Importance for the national
Economy
9. Contributes to the prosperity of nation-
Economist & management experts
consider business as the catalyst of growth.
Business uses the resources of the country, generates
employment, & engages capital and human resources
in productive use.
All these result in prosperity of the country.

122. Importance for the national
Economy

123. Importance for the national
Economy
11. Contributes to the national exchequer-
Business contributes crores of rupees in
the form of direct & indirect taxes to the exchequer.
It pays a huge sum of money by the way of income tax,
excise duty, commercial tax, value added tax, capital
gain tax, security transaction tax, service tax, import-
export duties, stamp fees etc.
Public sector business enterprises pay dividends to the
government that also goes to the national exchequer.

124. Importance for the national
Economy
12. Contributes to the foreign exchange reserves-
It contributes to the foreign exchange
reserves exchange through export earnings, foreign
direct investment (FDI), foreign institutional investor’
(FII) investments etc.

125. Importance for the national
Economy
13. Creates & maintain sound relations with the
nations
Business helps create and maintain
sound relations with the nations around the globe
through the trade and economic corporation.

126. Importance for the Society
1. Proper utilization of society’s resources-
Business plays a crucial role in the
efficient and proper utilization of society’s resources in
the best interests of the members of the society.
Business through its varied activities utilizes the human,
physical, financial, technological and informational
resources of the well-being and welfare of the society.
It uses these resources through the best application of
technology, managerial skills and knowledge.

127. Importance for the Society
2. Integrates interest of different sections of
society-
Business as an organization that serves
and integrates the interests of all the sections of the
society.
It serves the interest of investor, lenders, customers,
employees, local community, suppliers, government
and so on.

128. Importance for the Society
3. Produces and distributes goods & services-
Business play a significant role in the
production and distribution of goods and services that
members of society need.
It ensure the proper supply of quality goods and
services at the right price, place and time.

129. Importance for the Society
4. Improves standard of living and quality of life-
Business helps improve standard of living
and quality of life of all the members of society by
supplying variety of new and better products.
Modern businesses aim to enrich quality of life of
society through up-gradation of the standard of living of
the members of the society.

130. Importance for the Society
5. Generates employment opportunities-
Business generates a large numbers of
personnel to carry on its industrial, commercial/ trading
activities.
Its need to personnel goes on increasing with the
expansion and diversification of its activities.
Business also needs people to open new production
and distribution avenues in different parts of the country
or the world.
It also needs services of many professional and other
service providers such as bankers, insurers,
transporters, internet, courier.

131. Importance for the Society
6. Provides career opportunities-
Business does not only generate
employment opportunities for the public also provides
better career opportunities.
Business needs many experienced & talented persons
for the top & middle level managerial positions.
Thus, it provides potentially lucrative and challenging
career opportunities to the young, qualified, experienced
and talented persons.

132. Importance for the Society
7. Provides avenues for savings and investments-
Traditionally, banks have been instrumental for
developing saving habits among the members of public.
But in the past few decade, a large number of companies, mutual
funds, financial institutions, insurance companies, stock
exchanges, commodities exchanges etc. have come up.
Companies issue shares, debentures, commercial papers, invite
deposits from public for raising funds.
Mutual funds, stock exchanges, commodity exchanges, insurance
companies etc. are the forums which provide opportunities for
savings and investments for the members of the public.

133. Importance for the Society
8. Promotes social change-
Business is considered to be the
instrument of change in society.
Business bring social change and cause social
innovation.
It helps develop new value system and culture in
society.

134. Importance for the Society
9. Promotes social upliftment-
developing societies face many problems.
These include the problems of poverty, starvation,
unemployment, injustice towards minority groups,
women or economically weaker section etc.
Business through its activities helps eradicate these
problems and thus promotes social upliftment.

135. Importance for the Society
10. Benefits all sections of public-
Modern business is realizing its responsibilities
towards all the sections of society/ public.
Business nowadays is proactively thinking and working for
protecting the interest of investors, customers, employees,
suppliers, local community, government & so on.
All the sections of public/ society are being directly or indirectly
benefited by their business activities.
Schools, colleges, hospitals for mentally retarded and physically
handicapped persons, development & maintenance of gardens and
parks, vocational training programmes, old age homes etc. are
sponsored & supported by many business organizations for the
welfare of public.

136. Importance for Customers
Helps them to get right product, at the right place, at
the right time & at a right price.
Satisfaction of the needs of customers.
Customer better facilities, better deal & after-sale
service.
Get benefits under loyal customer schemes. The
regular customers get extra benefits and discounts.
Customer get better products & services at lower
costs from large business houses.
Customer get the joy of larger choice. Growth,
diversification & competition in the field of business
had resulted in the availability of many substitutes &
new products.

137. Importance for the Business
Helps business persons & business institutions in
accomplishing their objectives.
Helps business persons to acquire the knowledge
and better skills of business.
With better skills & knowledge, business persons
may go for expansion & diversification of business.
Business persons get knowledge & feedback
information from the middleman & customers. So
they can easily innovate and develop new products.
Make businessman more customer oriented so they
may lay more emphasis on customer satisfaction.

138. Importance for the Business
Helps business persons to create and maintain better
relation with wholesalers, dealers, retailers & other
mercantile intermediaries.
Helps business persons to become more responsive to
the society. They pay attention to their social responsibility
of business towards consumers, employees, suppliers etc.
Helps business persons to pay more attention on optimum
utilization of resources in the most efficient and effective
way.
Helps business persons to create their institution’s image
among the members of society and in the business world.
Owners of a business institution with sound corporate
image enjoy a very high social status.