nature and scope of business notes in pdf I TO B

1.nature of business

Meaning of business:  In the literary sense, the word ‘business’ means the which of being busy. Technically, the term ‘business’ means all those activities which are related to the production and distribution of goods and services with the object of earning profit. For example, the former who caltivates land, the fisherman who catches fish the manufacturer who raw meterial into semi finished (raw cotton of yarn) or finished goods ( yarn to cloth) etc. with the sole and sale of goods on wholesale or retail basis by individuals and firms, the another  by transporters etc. for earning profit are economic activities and included in business. Besides goods, the service of professionals such as of docters, charted accountants lawyers, insurange agent etc which are rendered for money are a part of business.

nature and scope of business

Activities of excluded from business

(    1 Social service Activities: There are certain organizations which do not seek profit as their goal.

These organizations are established, with the sole objective of rendering social services to the society. For instance, a hospital, a university, a library, a government agency, etc, may render service purely for social benefits to society. These and such other non-profit organizations having a standard different from the profit-seeking organization excluded from the study of business.

(   2.  PERSONAL CONSUMPTION ACTIVITIES: Similarly, all the activities which are concerned with the

Production or purchase of goods and services for personal consumption fall outside the scope of business. For instance, a shoemaker making a pair of shoes for personal consumption or a tailor sewing shirts for his own use or a nurse nursing her own child are not business activities because these do not involve is sale or transfer for value. However, if a shoemaker, manufacturers shoes for sale in the market with a view to earn profit, it will be purely a business activity.

3.ILLEGAL ACTIVITIES: The economic activity must be legal. Gambling, smuggling etc are done for earning of money but they are not included in economic activities on account of their being illegal in Pakistan.

Summing up, business means all those economic activities which are performed in the production of goods for sale in the market or for rendering of services for a price on a regular basis.