Introduction and Concept of Business
Business is an activity that is primarily pursued with the objective of earning profit. A business activity involves the production or exchange of goods or services with a view to earning profit or maximizing wealth.
Thank you for reading this post, don't forget to subscribe!The word ‘business’ literally means ‘A state of being busy‘. Every person is engaged in some kind of occupation; a farmer works in a field, a worker works in a factory, a teacher teaches in a class, and an entrepreneur is busy running his business. The primary aim of all these people is to earn profit or create wealth by doing some work.
In ancient times, the sole aim of business was to maximize profit at any cost, but in the modern age, business is an economic institution. Business is not an end, but it is the most appropriate means to achieve an end, i.e., human welfare and public betterment. It touches every aspect of our lives.
Various experts in management define business in various ways. Some definitions are given below:
According to L.H. Haney, “Business may be defined as human activities directed towards providing or acquiring wealth through the buying and selling of goods.” This definition includes activities relating to the production of goods. A vital omission is service. Nowadays, business includes the act of earning profit along with providing service or satisfaction to the public or its customers.
In the words of Peterson and Lowman, “Business may be defined as an activity in which different persons exchange something of value, whether goods or services, for mutual gain or benefit.” As per this definition, the exchange of goods and services is considered a business. It ignores an important aspect of business, and that is production. There must be production first and exchange later.
In the view of W.R. Spire Gal, “All the activities included in the production and sale of goods or services may be termed as business activities.” All those activities that are essential for the production and sale of goods form the parts of the business. This definition also includes activities required for providing services.
M.C. Naughtion defines, “The term business means the exchange of goods, money or services for mutual benefit.” This definition gives a smaller scope of business. It includes the exchange of goods and services, but not the production aspect of business.
In conclusion, we can say that the term ‘business’ includes all those activities that are related to the production and distribution of goods and services. It also includes all those activities that indirectly help in the production and exchange of goods and services, such as transport, insurance, banking, etc.
