Modern business has the following managerial characteristics:
(i)
Modern
business are established and run by entrepreneurs and managed by professional
managers.
(ii)
Innovators
and entrepreneur play important roles in business.
(iii)
Modern
business is not evaluated only from the economic point of view, but they also
have to fulfil their social obligations.
(iv)
The
importance of retail chain is increasing and in place of individually owned
shops we see a chain of departmental stores.
(v)
Increasing
use of division of labour, specialisation, standardisation and automation in
capital-intensive industries or business can be seen in modern business.
Components of Business:
Business includes
total enterprise of the country in industry and commerce. Mass production and
mass marketing are the norms followed by business enterprise. Business activity
has two branches:
1. Industry: Industry is related to
production of goods and services required in the market. This is called
industrial or manufacturing activity; and
2. Commerce: Commerce is concerned with
the exchange or distribution of goods and services to the customers. This is
called commercial activity.
3. Trade: Trade is concerned with the
distribution
of the production
in the economy. It can be of commodities or services.
1. Industry:
Industry is concerned with the
production of goods and rendering of services to the final consumer or the
industrialists for further production of goods and services. Industry and
business during this century will be knowledge based. Information technology
will take care of most of the work and large organisation with large workforce
will not exist. Organisations will become flat. Linear relationship between the
boss and manager and authority flowing downward and obedience upward will
disappear. Employees will have no
definite jobs and most of the jobs for two to five years.
Industries are generally
subdivided into five sub-categories: such as,
(i)
Extractive
Industries,
(ii)
Genetic
Industries
(iii)
Manufacturing
Industries
(iv)
Construction
Industries, and
(v)
Tertiary
or Service Industries
Industries like fishing, hunting, mining
fruit gathering, and agriculture are put into the first group. Poultry,
dairying cattle-breeding, breeding plants horticulture, pisciculture,
sericulture, etc. are classified into second category. The industries engaged
in the conversion and processing of raw material- through separation,
combination and transformation- to finished products for direct consumption by
the consumer or to be used as raw material for other industries, such as
machinery and plants of all other types, iron and steel, sugar, paper, cotton,
cloth, electrical appliances, paper pulp
etc. comes in this category. Construction industries are concerned with the
construction of roads, railway, bridges, canals, etc. They are generally
concerned with the manufacture of non-movable items. Tertiary or service
industries produce utility that cannot be seen or touched. It includes banking transport, insurance,
communication and services of a professional nature such as lawyers, doctors,
dentists, management-consultants advertisers charted accountants, engineers,
etc. Business produce goods and services for sale or exchange at a price making
profit is the primary goal of any organisation.
2. Commerce
It is a process by which resources of the
society are used for the production of goods and services for the consumers.
Business houses have vast resources at their command. These resources confer
enormous economic and political power. Business is people caring for employee
satisfaction and providing for their development has been one of the objectives
of enlightened business enterprises. The quality of the product is very
important. It is the duty of the commerce to make available goods at affordable
prices of a good quality. The role of auxiliary services (such as transport,
warehousing, banking, financing, and advertising) is outstanding in the total
process. Commerce is concerned with the way in which businesspersons conduct
their affairs. Business is a part of society and has several obligations
towards it. It is through commerce that innovations are given shape and are
converted into useful product and services. Business offers vast scope and
poses formidable challenges. In other words it is that branch of business,
which facilitates exchange of goods by removing hindrances, namely, those of
persons through trade, of exchange through banking, of place through transport
as well as packing and insurance, of time through salesmanship and advertising.
By removing these hindrances, commerce ensures a free and smooth flow of goods
and services from producers to consumers.
3. Trade
When two individuals establish contact
and transfer, goods and services this comes under category of trade (one
individual being producer and another being a consumer). Trade means sale,
transfer or exchange of goods and services through certain ancillary functions,
such as packing, warehousing, banking, transportation insurance and
advertising. Trade may be within the boundaries of a nation or a state meaning
domestic trade or outside the national boundaries meaning international trade
and may comprise export and import.
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