Notes on Definition And Characteristics Of Business:

            Simply, business means the art of being busy. To understand the meaning of business, it can be said that every business firm has two functions

  1. Marketing and
  2. Innovation.

            These alone are responsible for producing results all other functions are "cost".

            Hence, the primary business of every business is to secure and retain customer. The customer is the master and to serve him well is the only purpose of business. No business can survive without customer.

Defined by L. Urwick:-

            As penned by Urwick "profit can be no more the main objective of business man betting is the main objective of racing, making or score the main objective of cricket or eating is the main objective of living".

Defined by Peter Drucker:

            In the opinion of Peter Drucker there is only one definition of business purpose- "To create a customer"

Concept of Business:

            The concept of business is divided into two main types:

Old Concept:

            According to the old concept the term business was conceived as "The business of business is to do business" & "They are not in business for their health"

            In those days, the exclusive aim of business was profit maximization at any cost. It was accumulation of wealth and economic power even at the cost of social justice. Hankering after money was the primary aim of any economic activity.

Changing Concept Of Business:

            The modern concept of business emphasis on our social responsibility of business. Business does not exist in a vacuum but is a part of the society.

            The modern concept states that business is not an end but a means to achieve an end i.e.; human welfare and public good. Business touches every aspect of our lives. It is an institutional expression of our way of life. In fact, it can be aptly said that we live in a corporate society.

Characteristics Of Business:

            The following are the characteristics of business;

1. Continuous Process:

            The main aim of business is that it is a continuous process. Any activity that is done repeatedly is said to be business.

2. Creation Of Utilities:

            A business must create utilities in the form of goods and services and transfer them to those who pays the price for it.

3. Transfer Of Ownership:

            A business helps to transfer the ownership of the goods from one hand to another and thereby earn some amount of profit. A retailer purchases from the wholesaler and sells to the customer and a wholesaler purchases from the distributor and sells to the retailer. Thus the ownership is transferred.

4. Utilization Of Scarce Resources:

            A manufacturing business unit utilizes the scare natural resources of the society and converts them into consumer goods or finished products. Thus, it utilizes the scare natural resources and helps economic growth of the nation as a whole.

5. Creation of Job Opportunity:

            A business being or continuous process requires people for different purposes. People are employed for smooth running of the different aspects of the business. It thus creates job opportunities for people of the society in which the business exists.

Socio Economic Motive:

            As an integral part of the society and being an artificial person a business does perform many socio responsibility like using the scare natural resources, creating job opportunity, but its aim is to earn profit also for its very existence and development with growth vertical and horizon.