Business Sustainability: Definitiondefinition

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Siksha Srijan Academy Of Technology and Management
SIKSHA SRIJAN ACADEMY OF TECHNOLOGY & MANAGEMENT

Contact : 6291355543 / 7449393135
Business Sustainability
Chapter 1
DefinitionDefinition:-
According to the wheeler “Institutions organised and operated to provide
goods and services to the society under the incentive of private gain”.
According to W.R. Springal “All the activities included in the production
and sale of goods and services may be classified as business activities
“.
Objectives of Business
1. Economic objective
 Survival:- To survive and exist in the competition for a long period
is only possible when a firm can cover its costs and earn profits.
 Profit:- Profit is an important factor for the survival of the company,
growth of the company, and expansion of a business.
 Growth:- After starting a business growth is also an important
factor. Growth is measured by sales, number of branches, number
of products, etc.
Prepared by Joy Bhowmick

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2. Social Objectives
 Supply of desired quality of products – Customers prefer to buy
the products only when they are of satisfactory quality and are
available at a reasonable price.
 Avoidance of unfair trade practice – Unfair trade practices
include black marketing of products, adulteration in products,
exaggerating in advertisements of products, etc. With these
practices, a businessman will not only lose his reputation but it is
punishable under law.
 Avoidance of pollution – Businessmen must adapt environment-
friendly techniques of production and should drain the waste
materials in such a way that they do not pollute the environment.
3. Human or personal objectives
These objectives are related to the employees of the organization. It
includes-
 Providing good working conditions.
 Payment of competitive usage and salaries.
 Personal growth and development through training.
 Peer recognition and respect by encouraging employees to take
initiative and participate in decision-making.
Characteristics of Business
1. Businesses a human activity – Business is an activity performed
by humans in which human beings produce goods and make a
profit by selling in the market.
2. Production and selling of goods and services – Business
includes the activity of production and selling of goods and
services in the market to earn money and profit. Either produce or
procure goods and services from other producers. Deals in
consumer goods, industrial goods, or services (banking, insurance,
transportation, etc. )
3. Risk and courage – Risk Is always in the business and
businesses dare to face the risk.
4. Sales of goods and services for fulfilling human needs
– production and sale of goods and services are popular activities.
The production of goods and services for self-consumption is not a
business. Ex. A farmer grows crops on his farm but if this farmer
has done the cultivation of crops for himself, it is not a business

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but if this farmer sells these crops, it is a business. If we buy goods

as a gift, it is not a business but if we buy for sale, it is a business.
5. Dealing with goods and services daily – Buying, selling, and
exchanging goods and services once or twice is not a business.
Only regular buying or selling of goods or services for economic
motives is business. Ex. Selling a house to buy a new house is not
business but selling and buying a house regularly to earn is
business.
6. Profit earning- Businesses can’t survive without earning profit.
Any transaction which is done without the motive of profit can be
called a business transaction.
7. Uncertainty or risk involved – There is always a possibility of a
loss of risk in business because the business environment is
dynamic, market conditions change, changes in the taste of
customers, and strikes in the business factory. So all these can
lead to loss and risk in business.
How to understand a business :-

 A business model is a company’s core strategy for profitably doing
business.
 Models generally include information like products or services the
business plans to sell, target markets, and any anticipated
expenses.
 The two levers of a business model are pricing and costs.
 When evaluating a business model as an investor, ask whether the
idea makes sense and whatever the numbers add up.
NATURE/FEATURES OF BUSINESS
The main important features of business are as follow:
1. Economic activity: Business is a form of an economic activity.

It is the fruitful occupation for millions of people around the
world like traders, bankers, industrialists, manufacturers and
many more including professionals and those employed.

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2. Regularity in dealing: Business activity is carried out

regularly. It is not merely sale or exchange but the regularity
or continuity of such dealings that constitutes business. A
single transaction does not constitute business. The
production or exchange of goods or services for a price is
undertaken regularly and continuously in business.
3. Profit motives: Business is an income oriented activity. Every

businessman expects profit from the transactions. The main
object of business is to earn profit. Businessman earns profit
from the business transactions and the buyer satisfies his
wants of goods and services.
4. Organized activity: Business is an organised activity

concerned with production and distribution of goods and
services. A firm must conduct consumer research to identify
consumer needs and wants. There isa constant need to
monitor customer needs and wants, and accordingly produce
and distribute goods and Service. Business has to be
conducted systematically with continuous research and
development. It should be organized in a systematic manner
so that business objectives can be achieved successfully.
5. Degree of scale: Business can be undertaken at varied

degree of seals of operation. Some firm like Sole trading
concerns may undertake business on a small scale and that
too in a local area. However, some firms, like joint stock
companies may undertake business on a large scale, even
at a global level.
6. Risk and Uncertainties: Business activities are always
risky and uncertain. A business is likely to suffer huge loss

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due to a number of possible reasons such as change in

fashion, tastes, preferences, government policies,
technology, recession in the economy, natural calamities etc.
All business risks can’t be insured. A business, however, can
minimise risks through proper foresight and planning.
7. Societal Interest: At present, business firms place

emphasis on “societal concept” of business. Business make
efforts to preserve and promote customers’ and society’s
well-being. Business unit try to achieve a balance between
profit + Consumer satisfaction + public Interest. Therefore,
increasing efforts are made to produce ecofriendly products
to satisfy consumer.
8. Social Responsibility: Professional business firms are

conscious of their social responsibility. The firm try to fulfill
their social responsibility towards various groups. It needs
the support of the groups i.e. investers, employees,
consumers, creditors and so on. It can’t function without an
active participation from these social groups. This feature of
business in getting more importance in today’s era of a
globalization.
9. Customer Satisfaction: Modern business world is a

consumer oriented. Customer is the King and Centre of all
marketing activities. Professional business firms adopt
customer oriented approach in their business operations.
Business firms give importance not only to profit eaming but
also to customer satisfaction. Customers would be satisfied
only when they get real value for their purchases. Business
firms have to take care of not only customer satisfaction but
also have to delight the customers by providing better and
additional services.
10. Creative: Modern business is creative in nature. These

days, consumers can’t be satisfied with the same type of

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goods and services. Hence business organizations have to

be innovative or constantly search new ideas and proposals.
11. Dynamic: Business is a dynamic activity. There is a

certainty of change in business Dynamic forces are at work
from day to day. Within business new products, methods,
innovations in management cause ever changing adjustment
of policies and administration. From outside forces such as
Government regulation, war, changing consumer income and
new development in science and an art.
12. Government Control: Business organizations are subject

to government control. The government of each country
enacts laws and regulations to control and regulate business
activities. Business organisations are expected to adhere to
such laws.
13. Buying and Selling: All business activities are directly or

indirectly connected with transfers or buying and selling of
goods and services. Business is useful to buyers and sellers.
Businessmen as Seller of goods and services, provide
convenience and satisfaction to buyers through provision of
form utility, place utility and time utility. In return for the
supply of utilities, businessmen receive profit benefit from the
buyers

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Page 1 of 6

Siksha Srijan Academy Of Technology and Management

SIKSHA SRIJAN ACADEMY OF TECHNOLOGY & MANAGEMENT

Prepared by Joy Bhowmick

Prepared by Joy Bhowmick

but if this farmer sells these crops, it is a business. If we buy goods

How to understand a business :-

The main important features of business are as follow:

1. Economic activity: Business is a form of an economic activity.

Prepared by Joy Bhowmick

2. Regularity in dealing: Business activity is carried out

3. Profit motives: Business is an income oriented activity. Every

4. Organized activity: Business is an organised activity

5. Degree of scale: Business can be undertaken at varied

Prepared by Joy Bhowmick

due to a number of possible reasons such as change in

7. Societal Interest: At present, business firms place

8. Social Responsibility: Professional business firms are

9. Customer Satisfaction: Modern business world is a

10. Creative: Modern business is creative in nature. These

Prepared by Joy Bhowmick

goods and services. Hence business organizations have to

11. Dynamic: Business is a dynamic activity. There is a

12. Government Control: Business organizations are subject

13. Buying and Selling: All business activities are directly or

Prepared by Joy Bhowmick

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