Assignment

Introduction to business

Submitted to :
Mr. Md. Sohel Ahmed

Lecturer

DEPARTMENT OF BUSINESS ADMINISTRATION

Submitted by :
Md Sajidul Islam

Roll : 105, ID: 20186826, section: B

Batch: 21

BBA (Professional), Dhaka City College

Date of Submission : 02.12.2018

Definition of Business
A business is an organization where people work together. In a business, people
work to make and sell products or services. Other people buy the products and
services. A business can earn a profit for the products and services it offers. The
word business comes from the word busy, and means doing things.

In other words we can say that a business is an organization or enterprising entity

engaged in commercial, industrial, or professional activities. Businesses can be for-
profit entities or nonprofit organizations that operate to fulfill a charitable mission
or further a social cause.  Business is also the organized efforts and activities of
individuals to produce and sell goods and services for profit.

Characteristics of Business

5 main Characteristics of Business are as follows,

The characteristic of business or features of business discussed below:

1.Entrepreneur:

          An entrepreneur is a person who combines the factors of production to

produce goods and services. The presence of entrepreneur is essential in any
business which may be operated on a small or on a large scale.

2.Business Enterprise:

         Business enterprise whether it is carried on a small or a large scale deals in

goods and services .the goods may be consumer goods such as shoes, cloth, bread,
milk etc or capital goods like building, plant, machinery etc  or services like
banking, financial, lawyer, advertising etc.

3.Continuous Deals:

         Business consist of producing, purchasing or selling goods on a continuous

basis.an isolated transaction is not treated as a business. For example, I sell my old
books in the market is not doing business. However, if I purchase old books and
sells them in spare time on regular basis to earn profit it will then be treated as a
business.

4.Risk:

         There is an element of risk and uncertainty in every business. There is no

certainty that business will always result in profit. The business may suffer losses
due to change in demand for fashions fire robbery.

5.Profit:

         The primary objective of every business is to earn a profit. If an enterprise is

to survive grow and expand it must yield a profit. Profit making thus is essential
element and characteristic of business.
Objective of Business

The business objective is a goal, i.e. where the business wants to reach in the future.
For example, a business wants to set up its franchise in another state in the next 3
years or it wants to increase its workforce in the coming months.

Business needs objectives, without objectives the business is like a car without
headlights driving blind. Objectives of business are the purpose for which the
business is established and performed. We can call objectives the cornerstone of
every business.

Objectives are needed in every area where performance and results directly affect the
survival and prosperity of a business. The right choice of objectives is critical for the
success of the business. The objectives of a business can be classified into two main
categories, which are

1. Economic objectives
2. Social objectives

Economic Objectives of Business

We learned in the previous topic that business is an economic activity. Hence, its
purpose is to show economic results. Let’s understand the economic objectives of the
business. They are as follows:

1) Profit Earning
Business is a set of activities undertaken with the prospect of sale for
the purpose of earning a profit. Profit is the extra income over the
expenses. The main objective of any business is to earn a profit. Just as
a plant cannot survive without water, similarly a business cannot sustain
without profit.

Profit is necessary for growing and expanding business activities. Profit

guarantee a consistent stream of capital for the modernization and
augmentation of business activities in the future. Profits likewise show
the scale of stability, efficiency, and advancement of the business
organization.

2]) Market Share / Creation of Customers

In the words of Drucker, “There is only one valid definition of business purpose; to
create a customer. “ Profits are not generated out of thin air. They are the result of the
hard work of the businessman to satisfy the needs of the customers.

In the long run, the survival of the business completely depends upon the market
share captured by the business.  The creation of good and satisfaction of the needs of
the customer is a crucial purpose of the business. So to generate profit and demand,
the business must supply premium quality and give value for money products.

3] Innovation & Utilization of Resources

Innovation normally means to change processes or creating more effective processes,
products and ideas. Nowadays, business is ever-changing and dynamic. To keep up
with the growing competition a businessman has to introduce efficient design, latest
trends, upgraded machinery, new techniques, etc.

Large corporations invest a humongous amount of capital in their Research &

Development department to boost innovation. Whereas, on the parallel lines,
utilization of resources is a proper use of workforce, raw material, capital and
technology used in the business. A business has limited resources and that’s why its
main objective is to put these resources to correct divisions.

4] Increasing Productivity
Productivity is a scale to measure the efficiency of the business activity. It is usually
the last objective but just as important because productivity is measured by the output
given by the activities. It is the end result of any business activity. Each business
must go for more prominent productivity – to guarantee its survival and
development. This goal can be accomplished by decreasing wastages and making
proficient utilization of machines and supplies, HR, cash and so forth.
Social Objectives of Business
According to Dayton Hudson “The business of business is serving society, not just
making money.” Business is one of the pillars on which the society stands.
Therefore, it is a part of the society. In fact, it cannot thrive without the resources
from the society.  The business earns its income from the sale of products and
services to the society. It is mandatory on the part of the business to take care of the
social factors. The necessary social objectives of a business are as follows:

1)Providing Goods & Services at Reasonable Prices

Business exists in the first place to satisfy the needs of the society. It’s the first and
major social objective of the business. Products and services ought to be of better
quality and these ought to be provided at sensible costs. It is additionally the social
commitment of business to keep away from misbehaviors like boarding, Black
promoting and manipulative advertising.

2) Employment Generation
One of the major problem today’s generation facing is unemployment. Business
generates employment. Therefore, it is the social objective of a business to give
chances to beneficial employment to individuals of the society. In a nation like India,
unemployment has turned into a critical issue.

3) Fair Remuneration to Employees

The business does not run on its own but the people are responsible for the success
and failure of the business. The people on the inside of the business are more
valuable i.e. employees. They are an asset of the business and make a ground-
breaking contribution to the business. They must be given reasonable pay for their
work.

Notwithstanding wages and salary, a significant piece of profits ought to be distrib-

uted among them in acknowledgment of their commitments. Such sharing of benefits
will expand the inspiration and proficiency of employees.
4) Community Service
Business must give back something to the society. As a result, the Library,
dispensary, educational foundations and so on which a business can make and help in
the advancement of society are created. Business enterprises can build schools,
colleges, libraries, hospitals, sports bodies and research institutions. They can help
non-government organizations (NGOs) like CRY, Help Age, and others which
render services to weaker sections of society.

Forms of Business Organization

These are the basic forms of business ownership:

1. Sole Proprietorship

A sole proprietorship is a business owned by only one person. It is easy to set-up

and is the least costly among all forms of ownership.
The owner faces unlimited liability; meaning, the creditors of the business may go
after the personal assets of the owner if the business cannot pay them.
The sole proprietorship form is usually adopted by small business entities.

2. Partnership

A partnership is a business owned by two or more persons who contribute

resources into the entity. The partners divide the profits of the business among
themselves.
In general partnerships, all partners have unlimited liability. In limited
partnerships, creditors cannot go after the personal assets of the limited partners.

3. Corporation

A corporation is a business organization that has a separate legal personality from

its owners. Ownership in a stock corporation is represented by shares of stock.
The owners (stockholders) enjoy limited liability but have limited involvement in
the company's operations. The board of directors, an elected group from the
stockholders, controls the activities of the corporation.
In addition to those basic forms of business ownership, these are some other types
of organizations that are common today:
Limited Liability Company

Limited liability companies (LLCs) in the USA, are hybrid forms of business that
have characteristics of both a corporation and a partnership. An LLC is not
incorporated; hence, it is not considered a corporation.
Nonetheless, the owners enjoy limited liability like in a corporation. An LLC may
elect to be taxed as a sole proprietorship, a partnership, or a corporation.

Cooperative
A cooperative is a business organization owned by a group of individuals and is
operated for their mutual benefit. The persons making up the group are
called members. Cooperatives may be incorporated or unincorporated.
Some examples of cooperatives are: water and electricity (utility) cooperatives,
cooperative banking, credit unions, and housing cooperatives.

With these we can conclude that we have learnt about introduction to business and
some basic information.