Business

Definitions
 1. Background of business

Definitions

Barter system
The exchanging of excess goods with others to
obtain the goods that we wanted. This system of
exchanging goods is known as barter system.

Business
An economic activity which manufactures or
provides different goods and services in order to
fulfill the human needs is known as business.

E-Business
An economic activity which manufactures or
provides different goods and services in order to
fulfill the human needs through electronic media
anywhere, anytime is known as E-business.

Wants
Different ways of satisfying needs are known as
wants.
Business objectives
A specific objectives or a set of objectives to be
achieved by a certain party through business are
known as business objectives.

Needs
Requirements that must be essentially fulfilled
for existence are known as needs. (Human
needs)

Commodity
Tangible and physically existing things can be
called as commodity.

Commodity manufacturing business

The establishments which produce the
commodity required for the fulfillment of human
needs and human wants is known as commodity
manufacturing business.

Services
Any activity or a process rendered to consumers
by a business in order to fulfill their needs and
wants are known as services.
Service providing business
Any activity or a process rendered to consumers
by a business in order to fulfill their needs and
wants are known as services. These services are
known as service providing business.

Factors of production
Business requires different resources to produce
goods and services. These resources required are
known as factors of production.

Land
All the natural resources available are known as
land.

Labour
The mental and physical contribution in a
business can be considered as labour.

Capital
Anything produced by man in order to facilitate
manufacturing process is known as capital.
Entrepreneurship
The roll of organizing factors of production in
order to start and conduct a manufacturing
process is known as entrepreneurship.

Stakeholders
The different parties who are interested in the
business activities are known as stakeholders.

Industry
A collection of business which produce the same
good and services is called industry.

Owners
The people providing the resources (capital) to
the business is known as owners.

Managers
The business operations are conducted, and
decisions of the owners are implemented by a
person. This person is known as manager.
Customers
The people who buy the goods and services from
a business are known as customers.

Suppliers
The providers of raw materials, transport
facilities, etc to a business are known as
suppliers.

Competitors
Other businesses producing or selling similar
goods or services to a business in operations are
known as competitors.

Financial institutions
The institutions providing required loans,
consultancy services etc to a business are known
as financial institutions.

Employees
Individuals performing the operations of a
business are known as employees.

Community
Including the population living outside of the
business in the society is known as community.

Future investors
Individuals and institution willing to invest are
known as future investors.

Specialization
Producing the goods that they can produce the
best with the skills and resources they had is
known as specialization.

Government
The system which propagates policies required to
achieve the economic growth of a country is
known as government.

2. Business Environment

Definitions

Business environment
The environment in which the factors affecting
the business are activated is known as business
environment.
Internal environment
Different parties and force acting within a
business and affecting a business are known as
the internal environment.

External environment
Different parties and forces acting outside the
business and affecting a business are known as
external environment.

Inflation
The continuous increase in the general price
levels of goods and services is known as inflation.

Political environment
The environment which refers to the influence of
a government's policies on businesses, where
businessmen must conduct their operations by
considering these policies is known as political
environment.

Legal environment
The environment which consists of laws and
regulations, enforced to protect consumers,
domestic manufacturers, the business
community and the environment is known as
legal environment.
Income distribution
How the national income of a country has been
distributed among its people is known as income
distribution.

Level of employment
Everyone expecting a job receives a suitable job,
achieving full employment level is known as the
level of employment.

Foreign exchange rate

The rate at which the currency of one country is
exchanged with the currency of another country
is known as foreign exchange rate.

International relations
The relationships which are built up through
trade zones and trade agreements in between
countries is known as international relations.
Technological environment
The rapidly changing innovations in technology
that impact business activities and lifestyles,
including advancements in computing,
communication, production, and transportation is
known as technological environment.

Economic environment
Economic factors that affect businesses, with the
government of a country mainly responsible for
setting economic policies is known as economic
environment.

Globalization
The mutual relationship among countries in
terms of economic, social and cultural
dimensions is known as globalization.

Interest rate
Interest rate is given for the bank deposits and
charged for bank loans.
Savings
Proportion of the income that individuals keep
without spending on consumption is known as
savings.

Global environment
The business environment outside the country
which affect business is known as global
environment.

3. Business Organizations

Definitions

Business organizations
An individual or group of individual working
together to produce goods and services to fulfil
needs wants is known as business organizations.
Private sector business organizations
Businesses owned by an individual or a group of
individuals are known as private sector
businesses.

Public sector business organizations

Businesses funded and owned by the
government are known as public sector business
organizations.

Profit-oriented businesses
The main objective of earning profits in a
business are known as profit-oriented businesses.

Non-profit-oriented businesses
The objective of ensuring welfare of members
and society is known as non-profit-oriented
businesses.

Small and medium scale businesses

businesses with a small amount of capital
invested, with a small number of employees and
having a small market share relative to large
scale businesses are known as small and medium
scale businesses.

Large scale businesses

Businesses that have invested a large amount of
capital, have employed a large number of
employees, had a large market share and had
the ability to influence the respective industry
are known as large scale businesses.

Sole proprietorship
Businesses owned by an individual are known as
sole proprietorship.

Cooperative societies
A Democratically controlled independent
organization is known as cooperative societies.
Partnerships
The relationship among people conducting a
business in common with an objective to earn
profit is known as partnership.

State corporations
Businesses fully owned or the majority is owned
by the government are known as state
corporations.

State departments
The institutions that will be directly and fully
governed by the government under a ministry is
known as state departments.