Concept of Business business literally means to be busy .

.however the meaning of business more specifically is that of being busy to earn income . Thus business includes all occupations in which people are busy earning income either by production or purchase and sale of exchange of goods and services to satisfy the needs of other people. Definition of Business - according to H . Haney , business may be defined as humane activity directed towards producing or acquiring wealth through buying and selling goods . Objectives of Business generally , business men follows multiple objectives . These objectives may be classified as follows (1)Economic objectives (2)Social objectives

(1)Economic Objectives- There are following economic objectives (a)Earning profits (b)Creation of customers (c)innovation (d)Optimum utilization of resources (a)Earning profits- the major economic objective of a business is to earn sufficient profits . Profits are needed for adequate reward to the entrepreneurs and to provide funds for future capital. This is necessary because of the following factors. Return on investors Means of livelihood Reward for risk taking Survival of business Growth and expansion Reputation

 (b)Creations of customers- the business can survive only if there is demand for its goods and services. So it must aim at satisfaction and winning of customers . Customers are created through advertisement and sale promotional activities. (c)Innovations- innovation is the soul of business in modern times. Business cannot succeed without innovations . Innovation means research and development. The business should devise new methods to keep pace with changing business scene. (d)Optimum utilization of resources- business requires the use of men, machines and materials which are considered to be scarce resources. Every business is expected to make the best use of these resources .

 (2)Social objectives- A business is a part of the society . It should follow the ethical and moral norms of the society. A business should tend to achieve the following social objectives (a) To provide better quality products at reasonable prices to the customers (b) To create employment opportunities (c) To develop healthy relations with the workers and their unions. (d) To work for the welfare of the workers. (e) To pay taxes to the government honesty (f) To develop healthy relations with the workers and their unions.

 Characteristics of Business- the nature of business can be described in terms of the following characteristics (a)Economic activity (b)Production or exchange (c)Dealing in goods and services (d)Regularity and continuity in dealing (e)Profit motive (f)Creation of utility

 (a)Economic activity- Business is an economic activity or

occupations it consist of producing and purchase and sale of goods and services to earn income in the form of profits.

(b)Production or exchange- Every business is concerned with

production and exchange of goods and services for value. Thus, goods produced or purchased for personal consumption or for presenting to others as gifts do not constitute business because there is no sale or transfer for value.

(c)Dealing in goods and services-Business deals in goods and

services .goods produced and sold may be (i)consumer goods such as bread, cloth, cold drink, and sugar or (ii) capital goods such as tools and machines. Services include supply of water , electricity and gas insurance transportation etc.

(d)Regularity and continuity in dealing-regularity of economic

transactions is the essence of business. There should be continuity or regularity of exchange of goods and services for money.

 (e)Profit motive - The chief objectives of a business is to earn reasonable profits. The survival of a business depends upon its ability to earn profits . Every businessman wants to earn profits to receive interest on his capital and to reward himself for his services. (f)Creation of utility -All business activities create utilities for the society. Form utility is created when raw materials are converted into finished goods and services.

 Classification of business activities

we may classify business activities into two broad categories (a) industry (b) commerce Definition of industry- Industry is concerned with the producing or manufacturing of goods . It is involved in changing the form of goods at any stage from raw material to the finished product Types of industries industries may be divided into three broad categories , namely (1) primary (2) secondary (3) tertiary (1) Primary Industries Primary industries include all those industries which are concerned with extraction of natural resources and reproduction of living species . These industries can further be classified into two categories (a) Extractive Industries (b) Genetic Industries

 (a) Extractive Industries- Extractive industries are those which

involve extraction of something from natural resources such as minerals from earth, fish from rivers and seas , timber from forest etc. the products of extractive industry can be directly used as raw material for other industries.

(b) Genetic Industries - The industries involved in the activities

of rearing and breeding of living organism i.e. birds, plants, animals etc are known as genetic industry.

(2) Secondary Industries- Secondary industries make use of

products which are extracted and produced by primary industries as their raw material and produced finished products . Secondary industries are further classified into two categories. (a) Manufacturing Industries (b) Construction Industries

(a) Manufacturing Industries- These industries are engaged in

the process of conversion of raw materials or semi finished goods into finished goods. Timber is converted into furniture , iron into steel etc. manufacturing industries are of the following types

 (i)Analytical Industry (ii) Processing Industry (iii) Synthetic Industry

(i)Analytical Industry- Under this , the basic raw materials are

analyzed and separated into different finished products. For example , separating refined crude oil into kerosene ,petrol, diesel, and lubricating oil, etc. (ii) Processing Industry- The raw materials pass through various processes to become a final product . The finished product of a process becomes the raw material of the next process and so on. (iii) Synthetic Industry- The raw materials are combined together in the manufacturing process to make the final product . Plant soap, plastics, yarn, cement, etc.

(b) Construction Industries- These are concerned with creation

of infrastructure essential for orderly and efficient conduct of main economic activities . It involves construction of buildings, roads, dams, bridges, and canals.

 (3) Tertiary Industry- these are concerned with providing services which facilitate smooth flow of goods services . That is why it is also known as services industry. The various types of services provided by tertiary industries are (a) transport it facilitates movement of goods from one place to another. (b) Banking- it provides credit facility to industrial and trading firms (c) Insurance- provides coverage from various types of risks. (d) Warehousing- it facilitates storage of goods produced by primary and secondary industries. (e) Advertising- it provides information about the goods and services to the consumer

 (2)Commerce Industry- It is a link between producers, distributors

and consumers . It includes all those activities which are concerned with the transfer of goods from the place of their production to the place of their consumption. Commerce industry classified into categories (1) Trade

(1) Trade- trade means purchase and sale

(a)Internal Trade (b)External Trade or International Trade

of goods with profit motives .it involves exchanges of goods and services between buyers and sellers.

Types of trade- Trade may be classified into (a)Internal Trade- home trade or internal trade

means buying and selling with in the boundaries of a country . Both the buyer and seller belong to the same country . Home trade may further be divided into (i)Whole sale trade (ii) Retail Trade (i)Whole sale trade it involves buying and selling in large quantities (ii) Retail Trade- it involves buying and selling in small quantities.

 (b)External Trade or International Trade-foreign trade or

external trade or international trade refers to trade between two nations. It implies buying and selling of goods between two or more countries. Foreign trade can be of three types. (I)Import Trade (II)Export Trade (III) Entrepot Trade

(I)Import Trade-when the trader of one country buys the goods

from foreign countries it is known as import trade.

(II)Export Trade- when the trader of a country sells goods to a

foreign country , it is known as export trade . E.g. , if Indian tea sells tea to U.S.A. , it is export trade.

(III) Entrepot Trade- it involves import of foreign goods with a

view to re export them and making a profit in the process . For example , an Indian may import certain commodities from European countries and Export them to Bhutan.

Introduction
Social responsibility is a doctrine that claims that an entity whether it is state, government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative," in that it is a responsibility to refrain from acting, or it can be "positive," meaning a responsibility to act. It can also imply that corporations have an implicit obligation to give back to society.

Social Responsibility
A businesss collective code of ethical behavior towards the environment, its customers, its employees, and its investors. Ethical obligations to customers, employees, and the general community The responsibility of a responsible agent who chooses to participate in a society and acquire the benefits thereof. The responsibility to profitably serve employees and customers in an ethical and lawful manner. An organization's obligation to maximize its positive impact and minimize its negative impact on society. The concern for the consequences of a person's or institution's acts as they might affect the interests of others, including the environment and involuntary customers. The concept that businesses should be actively concerned with the welfare of society at large.

"social responsibility" in his capacity as businessman? he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation. he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment. at the expense of corporate profits, he is to hire "hardcore" unemployed instead of better qualified available workmen to contribute to the social objective of reducing poverty

Social Responsibility Principal

Principle 1: Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision-making and operations. Principle 2: Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation. Principle 3: Managers should adopt processes and modes of behavior that are sensitive to the concerns and capabilities of each stakeholder Principle 4: Managers should recognize the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks.

 Principle 5: Manages should work cooperatively with other entities, both public and private, to insure that risks and harms arising from corporate activities are minimized and, where they cannot be avoided, appropriately compensated. Principle 6: Managers should avoid altogether activities that might jeopardize inalienable human rights (e.g., the right to life) or give rise to risks which, if clearly understood, would be patently unacceptable to relevant stakeholders. Principle 7: Managers should acknowledge the potential conflicts between (a) their own role as corporate stakeholders, and (b) their legal and moral responsibilities for the interests of stakeholders, and should address such conflicts through open communication, appropriate reporting and incentive systems, and, where necessary, third party review.

 Business environment-the term business environment refers to all

forces which are external to a business and beyond its control . Business environment may be defined as all those conditions and forces external to a business unit under which it operates..these include customers, creditors competitors ,suppliers, government , socio culture organization, political parties, international organizations etc. Some of the forces environment which have considerable influence on the business policies and practices are as follows Frequent changes in government economic policies i.e. licensing policy , monetary policy, taxation policy etc Rapid technological changes as in computer industry introduction of new models. Political uncertainty e.g. unstable government , change in leadership of the ruling party. Increased competition in the market with the entry of multinational brands in the country.

 Nature of business environment business environment consist

of the external forces which affect the functioning of a business enterprise . These forces may be divided under two categories .namely General environment Specific environment General environment- general environment forces exercise their influence on a business unit in an indirect manner , i.e. these include economic , political, social, technological , and global it is also called remote environment. Specific environment- specific external environment forces influence the working of a business firm directly these include customers , owners, and investors, suppliers, creditors, employees, trade unions, competitors, government.

 Elements of a business environment-the elements of contemporary business environment can be grouped under the following headings-- Economic environment Politico environment Socio cultural environment International environment

POLITICO LEGAL ENVIRONMENT

ECONOMIC ENVIRONMENT

BUSINESS ENVIRONMENT

INTERNATIONAL ENVIRONMENT

SOCIO CULTURAL ENVIRONMENT

 Economic environment-economic environment refers to the

nature of economy (capitalist , socialist, or mixed) economic policies of the government , markets for material , lab our , capital etc . Business firms and institutions such as banks, insurance companies , transport companies and level of income of the people. The economic environment is greatly influenced by the government through fiscal policies , economic controls , industrial policy and import export policy. for instance , if the government announces a cut in the excise duty on the refrigerators, the sales of business firms manufacturing refrigerators will go up. The main components of economic environment include the following Planned outlay in private and public sectors. Agriculture and industrial production trends Service sector trends. Rates of growth of GDP and per capita income capital market trends Balance of payment and foreign exchange reserves.

 Socio culture environment- socio culture environment is

shaped by social factors such as attitudes of people , cultural ,heritage , beliefs and customs of people , education system , consumers organizations trade unions and other non government organizations. For instance the nature of goods and services in demand depends upon peoples attitude ,custom socio culture value , . In India the attitudes of people have changed with respect to food and clothing as a result of industrialization , employment of women in factories and offices in increased level of education The important elements of socio cultural environment in India include the following Share of working population in the total population Caste and occupational structure Family structure vs. nuclues families. Population shifts from rural to urban area. Education system and literacy rates Life styles of different segments of population Customs , beliefs , values and attitudes of people

 Politico legal environment-political environment comprises

political parties and their idology , type of government ,stability of government policy towards business , government policy regarding international business and multinational corporations. For instance the operations of an MNC coca cola company were discounted in the company , were discounted in India in the late 1978 because of the government policy restricting the growth of multinational companies in the countries. The important components of politico legal environment include the following Prevailing political system in the country Political institutions like government and allied agencies Nature of political leadership and profile of political leaders. The extent and nature of government intervention in business Government policies related to imports and exports.

 International environment- international environment is very

significant for the firm engaged in imports and exports and also for the firms having manufacturing operations in other countries . International environment includes trade policies of foreign governments, international organisations such as world trade organisation(WTO) , international monetory fund(IMF) ,world bank etc. and multinational corporations .

 World Trade Organization WTO is the international organization dealing with the global rules of trade between nations. Its main function is to ensure trade flows as smoothly, predictably & freely as possible Heart of the system known as the multilateral trading system is the WTOs Agreements, negotiated and signed by a large majority of the worlds trading nations, and ratified in their parliaments. Goal is to improve the welfare of the peoples of the member countries. The basic purpose of the WTO is to promote international trade without any discrimination-1st Jan, 1995 The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.

 Functions of WTO WTO shall facilitate the implementation, Administration and operation of the plurilateral trade agreement. WTO shall provide a forum for the negotiation among its members concerning their multilateral trade relations WTO shall administer the understanding on rules and procedures governing the settlement of disputes WTO shall administer the trade policy review mechanism and WTO shall co operate as appropriate with IMF AND IBRD and with the affiliated agencies

 International Monetary Fund IMF is a post war international monetary institution. It came into existence to promote economic and financial cooperation among member countries The International Monetary Fund (IMF) is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments. It is an organization formed to stabilize international exchange rates and facilitate development.[2] It also offers financial and technical assistance to its members, making it an international lender of last resort. Its headquarters are located in Washington, D.C., USA. The International Monetary Fund was created in 1944 [1], with a goal to stabilize exchange rates and assist the reconstruction of the world's international payment system. Countries contributed to a pool which could be borrowed from, on a temporary basis, by countries with payment imbalances. (Condon, 2007) The IMF describes itself as "an organization of 185 countries (Montenegro being the 185th, as of January 18, 2007), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty".

 Objectives of IMF Avoid the competitive devaluation and exchange control Establish and maintain currency convertibility with stable exchange rate To promote international monetary cooperation To facilitate balance growth rate To lend confidence to members by making the funds resources available

 International Bank for Reconstruction and Development IBRD was established to provide long term assistance for the reconstruction and development of economies of the economies of the member countries The International Bank for Reconstruction and Development (IBRD) is institutions that comprise the World Bank Group. The IBRD is an international organization whose original mission was to finance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight poverty by means of financing states. Its operation is maintained through payments as regulated by member states. It came into existence on December 27, 1945 following international ratification of the agreements reached at the United Nations Monetary and Financial Conference of July 1 to July 22, 1944 in Bretton Woods, New Hampshire. The IBRD provides loans to governments, and public enterprises, always with a government (or "sovereign") guarantee of repayment subject to general conditions (pdf). Commencing operations on June 25, 1946, it approved its first loan on May 9, 1947 ($250m to France for postwar reconstruction, in real terms the largest loan issued by the Bank to date). The IBRD was established mainly as a vehicle for reconstruction of Europe and Japan after World War II, with an additional mandate to foster economic growth in developing countries in Africa, Asia and Latin America. Originally the bank focused mainly on large-scale infrastructure projects, building highways, airports, and power plants.

 Functions of IBRD To assist in the reconstruction and development and development of its member countries To promote private foreign investment by means of guarantees To promote long range balanced growth of international trade and the maintenance of equilibrium in the BOP of member countries

 International Finance Corporation (IFC) The International Finance Corporation (IFC) promotes sustainable private sector investment in developing countries as a way to reduce poverty and improve people's lives. IFC is a member of the World Bank Group and is headquartered in Washington, DC. It shares the primary objective of all World Bank Group institutions: to improve the quality of the lives of people in its developing member countries. Established in 1956, IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. It promotes sustainable private sector development primarily by: Financing private sector projects and companies located in the developing world. Helping private companies in the developing world mobilize financing in international financial markets. Providing advice and technical assistance to businesses and governments.

 Liberalization : Liberalization refers to relaxation of previous

government restrictions usually in areas of social and economic policies. Thus, when government liberalizes trade it means it has removed the tariff, subsidies and other restrictions on the flow of goods and services between countries. This has been done by the government through Freedom in fixing the prices of goods and services Removal of restrictions on the movement of goods and services Reduction in tax rates and lifting of unnecessary controls over the economy. Simplifying procedure for imports and exports. Making it easier to attract foreign capital and technology to india

Privatisation: It refers to the transfer of assets or service functions

from public to private ownership or control and the opening of the hitherto closed areas to private sector entry. Privatisation can be achieved in many ways- franchising, leasing, contracting and divesture Conditions for privatisaton. Globalisation: Globalisation means integrating the domestic economy with the world economy. It is a process which draws countries out of their insulation and makes them join rest of the world in its march towards a new world economic order. Cases for Globalisation It is argues that Globalisation of under developed countries will improve the allocative efficiency of resource, reduce the capital output ratio and increase labour productivity, help to develop the export spheres and export culture, increase the inflow of capital, updated technology that gives a boost to the average growth rate of the economy.

 Forms of business organization-

an economic activity involves regular production or purchase and sale of goods and services with the object of earning profit through the satisfaction of humane wants . The different kinds of organisations as stated. Sole proprietorship Joint Hindu family business Partnership Co-operative society Joint stock company

 Sole proprietorship-that form of the business organization which

is started and run by one person who bears profits and losses of it. Merits of Sole proprietorship- a sole proprietorship firm enjoys the following benefits Easy formation- the formation of a sole trader ship concern is easier as compared to other forms of organizations . A person with small amount of capital can start the business without undergoing much legal formalities. Quick decision making- sole trader ship facilitates quick decision making and prompt action as the sole trader has exclusive control over his business. Secrecy- it is easy to preserve secrecy in business in case of sole proprietorship . The important clues of business can be kept as closely guided secrets by the proprietor. Flexibility- the sole trader is free to carry out any business as the situation demands . The flexibility is available because the sole trader is the sole owner and he has invested a small amount of capital.

 Demerits of sole proprietorship- there are following drawbacks

Limited capital-the capital which a sole trader can raise are limited. He can either depend on his personal resources or his borrowing capacity . The borrowing capacity depends on his assets and creditworthiness . Lack of managerial skill- all the managerial functions , which are essential for the successful operation of a business are performed by the sole trader himself. The individual may not be able to perform all the managerial functions because of limitations of time ,energy , skill , and imagination. Unlimited liability- the liability of the sole trader is unlimited. The business creditors can even recover their debts from the personal assets of the proprietor. Limited opportunities- since the scale of operations is relatively small, the sole trader cannot avail of the benefits of all business opportunities . Since there is one and the same person who provides capital and management .

 Joint Hindu family business- if the business set up by a

person is carried on by male members of his family after his death , it is called joint Hindu family business. The salient features of joint Hindu family business are outlined below Male members Membership by birth Registration Dissolution of business Rights Governed by Hindu law Continuty