Nature and scope of Business

Every one surrounds us are busy in various activities. Farmers are farming, teachers are teaching, shopkeepers selling and so on. Some are busy during day, some at night while some are busy throughout year. People are doing such activities to satisfy their wants. People either earn money or discharge various obligations through activities. Let we learn more about various types of activities with which we keep ourselves busy.

Human activities

Activities undertaken by humans are known as human activities. It is divided in two categories. (i) Economic activities and (ii) Non-economic activities

Economic activities - Activities preforming to earn money is considered as economic activity.

Non-economic activities – activities performing not to earn money but to get satisfaction can be called as non-economic activities.

Difference between Economic and Non-Economic Activities

Table of Difference between Economic and Non-Economic Activities

Basis

Economic activities

Non-economic activities

Purpose

Earning money

Social and psychological motive

Outcome

Fore creation of wealth

For satisfaction and happiness

Expectation

Profit or money expected

Profit or money not expected

Types of economic activities

Preforming activities to earn money is considered as economic activity. Normally people engage themselves in such activities on regular basis. It is called as their occupation. Occupations are categorized in three parts.

  1. Business: Business refers to an occupation in which goods and services are produced and sold to earn money. Mining, manufacturing, trading, transporting, storing, banking and insurance are example of business activities.

  2. Profession: profession refers to an occupation, which requires specialized knowledge and training to pursue it and primary objective of every profession is to provide service. A person may not be an expert in every field. we require services of others who specialize in one field or other. We need services of doctors for our treatment, lawyers to get legal support etc. They all called professionals.

  3. Employment: Employment refers to an occupation in which a person works regularly to get wages/salary in return. Government servants, company executives, bank officials, factory workers are said to be in employment. Person seeking a job must join work only after being satisfied with terms and conditions.

Differences between Business, Profession and Employment

Table of Differences between Business, Profession and Employment

Basis

Business

Profession

Employment

Nature of work

Supply of goods and services to customers for profit

services for a

fee with specialization of work

Performing

work according

to orders of employer

Qualifications

minimum

qualifications not

required

Education and training in a specific field required

Specialized

knowledge not

necessary in all

cases

Capital requirements

Required according to

nature, size and

scale of business

Required limited for establishment

Not required

Motivation

Earning profits from sale of goods

professional fees for services

Fixed wage or salary

Risk

Risk involved. Profits uncertain

Income fixed. Negligence of duty liable

No risk. Fixed wages/salaries

Code of conduct

Not specified

It is rigid. Maintain high standards of profession

Contractual terms and conditions

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