CLASSIFICATION
OF HUMAN ACTIVITIES-ECONOMIC AND NON-ECONOMIC
Meaning of
human activity-Human activity mean all those activity which are undertaken to
satisfy human wants.these activities continue throughout life because wants are unending,unlimited and
recurring.
The main
characteristics of human activities are-
1.Human
activities are those activities which are undertaken only by human beings.
2.Human
activities involve human efforts.
those human activities which are undertaken to earn
aliving and thereby satisfy human wants.The main object of this activity is to
earn income and create wealth.Economic activity is concerned with the
production,distribution and exchange of goods and services.These activities
create utilities and result in the production of wealth.Economic activities are
also called occupations.
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in
money terms. Money terms.
5.Examples
Business, Religious, cultural etc.
Profession and
Employment.
Basis Business Profession Employment
of distinction
1. Objective To earn profits. To
render services To earn
For economic gain. Wages
Or
Salary.
2.qualification No Minimum Qualification
Qualification educational required
Required. Required. Depend
Upon the
Job.
Defination and concept of business
Defination and concept of business
Business may be defined as an human activity directed
towards producing or acquiring wealth through buying and selling of goods.
Characterstics of Business
1.
Creation of utilities – Business makes goods
more useful to satisfy human w2ants.
2.
Dealings
in goods and services – Every business enterprise produces and/or buy goods and
services for selling them to others.
3.
Continuity in dealings – Dealings in goods and
services becomes business only if undertaken on a regular basis.”A single
isolated transaction of purchase and sale will not constitute a
business.Therefore, regularity of dealings is an essential feature of business.
4.
Sale,
Transfer or Exchange – All business activities involve transfer or exchange of
goods and services for some consideration.The consideration called price is
usually expressed in terms of money.Business delivers goods and services to
those who need them and are able and willing to for them.
5.
Profit motive – The primary aim of business is
to earn profits.Profits are essential for survival and growth of
business.Profit must, however, be earned through legal and fair means.Business
should never exploit society to make money.
6.
Element of risk – Profit is the reward for
assuming risk.Risk are uncertain and uncontrollable.A businessmen can reduce
risk through correct forecasting and insurance.
7.
Economic activity – Business is primarily an
economic activity as it involves production and distribution of goods and
services for earning money.
8.
Art as well as science – Business is art because
it requires personal skills and experience.It is also a science because it is
based on certain principles and laws.
Necessity of business
1.
To remove poverty – The economic development of
a country depends upon the growth of business.Industry, trade and other
business activities generate wealth and add to national income.
2.
To generate income – The main motive of business
is to generate income to satisfy human wants.This will also lead to high
national income of a country.
3.
To improve standard of living – Another moive of
business is to improve standard of living of a society.
4.
To earn foreign exchange – A country cannot
produce everything needed to the people in the country.It has to buy or sell
goods and services to the foreign countries for which foreign currency is
required.Thus, business helps to earn foreign exchange.
5.
To promote social welfare – Business helps to
promote social welfare and this is one of the another motive of a business.
Business as an economic activity
1.
The object of a business is to buy and sell
goods and services for profits – The main objective of a business is to sell
goods and services for profits.Profit is the main motive of a business because
profit leads to the growth and extension business.
2.
Business activities involve use of scarce
resources – Economic activity required use of scarce resources such as raw
materials, labours, capital and other factors of production.
3.
Business activities satisfy needs of the public
and of businessmen – Business activities satisfy the needs of the public by
making available goods and services.Public can buy these goods and services and
satisfy their needs.Business may be regarded as an economic activity both as a
means of generating an income and also as a means of satisfying the wants of society.
Objectives of
business
1.Economic objective
2.Social objective
3.Human objective
4.National objective
BUSINESS OBJECTIVES AT A GLANCE
Economic activity
Social activity Human activity National activity
1.Earning profit
1.Quality goods 1.Labour
welfare. 1.Optimum utilisation
2.Creating customers
at fair prices.
2.Developing of
resources.
3.Innovations
2.Fair remuneration human 2.National self-reliance.
To
employers. Resources. 3.Development of small
3.Generating 3.Participative business.
Employment.
Management. 4.Development of
backward areas.
4.Fair return to
4.Labour 5.Pollution control.
Investors.
Management
5.Social welfare.
Cooperation.
6.Payments of taxes.
Role of profits in business
1.
Incentive – Profit is the driving force behind
every business.It inspires people to start an enterprise and to work hard for
making it successful.Profit is the reward for the undertaking the risk of
business.
2.
Survival - Profit is essential for the survival
of business and it ensures the continuity of an enterprise.Profit helps
business to face trade cycle and other shocks.
3.
Growth – Profit is the biggest sources of
capital for expansion and growth of business.
4.
Measure of efficiency – Profit is considered to
be the index of success in business.
5.
Prestige and recognition – A loss making
business enjoys no goodwill.Profits provide economic power and status to
businessmen.Moreover, only a profit making business can provide services to society.
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