Business Makers

 
Business ethics requires that business persons must take decisions actions, which are in conformity with the prevailing norms or standards of society.  Ethics determines whether business behavior is right or wrong in terms of truth and justice.  For example, adulteration, black-marketing, false advertising are against business ethics. Ethic cal behavior is above behavior required by law.  Law reflects what society considers minimum standards of behavior.  Business ethics refers to standards of morality to be-followed in business.  It varies form society to society and from one time period to another.

The main elements of business ethics are as follows:

Ethical lamination: It means being sensitive to ethical issues while taking business decisions.  Businessmen must identify the situations where their decisions may be detrimental it the welfare of society.

Ethical Identification and Ranking: Businessmen must be able to identify the ethical factors, which are relevant in business decision-making.  They should also rank the ethical issues in order of their importance.

Ethical Evaluation: In additions economic costs and benefits, ethics should also be used in evaluating outcomes of business decisions. However, there is bound to e some ambiguity and disagreement unethical thinking.  Businessmen must be able to tolerate such ambiguity and disagreement.

Ethical Competence: Businessman requires not only managerial competence but also ethical competence. Unethical behavior is very costly.  Therefore, ethical perspective must be an integral part of managerial training.

Ethical obligation: Managerial decision-making must be based upon a concern for justice, fairness and equality to people, groups and communities.

To decide whether a particular activity is an economic or a non-economic activity the following points should be considered:

The purpose of the activity is the most important ground for deciding whether an activity is economic or non-economic. The same activity may be economic for one purpose and non-economic for another purpose. The chief purpose of an economic activity is to generate income. For example when a lady cooks food for monetary gain it is an economic activity. But if the amen lady cooks food for hers family it is a non economic activity.

when the work done is measurable in terms of money it is an economic activity. For example services of a maid servant can be measured in terms of money and is therefore and economic activity. On the other had services of a housewife cannot no measured in terms of money and is therefore a no economic activity.

In the normal course of life a person desires to earn money in order to satisfy his wants. He seeks to obtain maximum return from his efforts. But work done for emotional reasons is non-economic activity. For example a businessman wants to produce goods at the lowest possible cost to make maximum profit. On the other hand a person engaged in religious or social service is willing to spend bother his money and time.

Both economic and non-economic activities must be legal. Activities which are illegal though resulting in economic gain for example smuggling black-marketing robbery and others cannot bane called economic activities. Only those human activities can be called economic activities which are performed in accordance with the laws of the land. Even non-economic activities whether social or religious must conform to law.

Business refers to the economic activities which are directed towards producing or acquiring wealth through buying and selling of goods and services. Business is carried on by people to earn an income. Generation of income or wealth involves production, sale and exchange of commodities which human beings want. In other words, business is sale and exchange of commodities which human beings want. In other words, business is concerned with that part of production which is actually exchange and results in mutual benefit to both the buyer and the seller. Manufacturing, mining, trading, transportation, banking, insurance and others are examples of business activities.

An activity which requires special knowledge and skill and which is under taken to earn a living within a prescribed code of conduct is called profession. The services of lawyers, chartered accountants, doctors are considered as professions. Person’s who render these services are known as professionals. Members of a profession have their own professional association which exercises statutory control over their activities. Professionals are required to bane embalmers of the statutory control over their activities. Professionals are required to be members’ statutory association.

People who work for others and receive wages or salary in return are said to be in employment. They are know as employees and the persons for whom they work are called employers. There is a relationship of master and servant here. Workers employed in factories, offices, banks, government departments, etc. are in employment. They work as managers, officers, clerks, peons, sweepers, and in various other capacities.

Traditionally the role of commercial banks in the field of long-term finance to industry has been negligible. Therefore, the Government has set up a number of special financial institutions in the country to provide long-term finance to business enterprise The IFCI, IDBI, ICICI; Sacs are the main among such financial institutions. The term-lending institutions or development banks have become a major source of fence for flotation o new concerns as well as for the modernization and expansion existing oceans. The supplement other sources of fiancé and fill gaps. They provide fennec Goth in the form of equity and debt. These institutions provide both direct (loans) and indirect (purchase and underwriting of securities) assistance. These institutions re not simply financial institutions. They also provide promotional, technician managerial services. They take initiative on locating and filling gaps in the country’s industrial structure. In addition to well-known development banks in the country, the LIC, General Insurance Corporation, NIDC, NSIC, etc. also help in providing finance to industry.

The main advantages of institutional finance are as follows: (i) both risk as well as loan capital is available. Special financial institutions provide underwriting and direct subscript triton facilities also. (ii) New companies which may find it difficult to raise finance form the public can get finance from these institutions. Assistance is available when recourse to normal sources is impracticable or unprofitable. (iii) As these institutions carry out a thorough investigation before granting assistance to a concern, relationship with them help it increase the creditworthiness of a company. (iv) Loans and guarantees in foreign currency and deferred payment facilities are available for the import of required machinery and Kauai mint. (v) The rate of interest and payment procedures is convenient and economical. Facilities for repayment in easy installments are made available to deserving concerns. (vi) Along with finance, a company can obtain expert advice and guidance for the successful planning and administration of projects.

However, institutional financing may involve him following limitations: (i) the concern requiring fiancée form special financial institutions has tourist itself to a thorough investigation. A number of formalities and documents are involved. (ii) Many deserving concerns may fail to get assistance for want of security and other conditions laid own by these institutions. (iii) Sometimes, these institutions place restrictions on the autonomy o management. They lay down a convertibility clause inland agreements. In seedcases, they insist on the appointment of their nominees on the Board of Directors of the debtor company.

Business risk refers to the uncertainty of profit or even the possibility f loss due stop unexpected events in future. There is a chance of loss form the day goods are produced in anticipation of demand until they are sold and the payment is received.  Risk is inseparable form business and cannot be eliminated.  But risks can be reduced and the loss arising form risk can be spread.

The main characteristics of business risks are as under: (i) Uncertainty about the future course of events (ii) Risk is inherent in the nature of business enterprise (iii) Profit is the reward for bearing risk (iv) The degree of risk varies form business to business.

Business risks arise due to the following cause: (i) Natural causes like flood, famine, earthquake, etc. (ii) Economic causes like change market conditions (iii) Human causes such as strikes, lockout, accidents, and others (iv) Political causes such as civil war, fall of Government, and others (v) Physical causes such as mechanical defects.

Commerce denotes exchange of snoods and services for money and the activities that facilitate such exchange.  It is indispensable for modern economic life.  Industrial activities or production is meaningless unless the goods produced are sold and distributed among consumers through commercial activities.  Due to increasing division of labor and specialization, interdependence between regions and between nations has increased.  Commerce contributes towards such interdependence in the following ways

Commerce facilitates exchange and movement of goods through space and time.  Traders reduce the time and effort involved in buying and selling of goods and services.  For example, Hero Honda makes use of a large number of dealers to sell its motorcycles to people all ov3er the country.

Commerce helps to minimize booms and depressions in the economy by ensuring a balance between production and consumption.  For example, rise in the share of service sector in India’s gross domestics product (GDP) since independence has offset a sharp decline in the contribution f agricultural and manufacturing sectors.  Thus, commerce ensures a more orderly and healthy growth is the economy.

Commerce creates employment opportunities both directly and indirectly.  Directly, a large number of people are employed in trading, transportation, warehousing, banking, and insurance and other commercial activities.  Indirectly, continuous and effective distribution of goods ensures continuous and increasing employment in industries.

Commerce is helpful in raising the standard of living of people by ensuring a steady flow of more and better goods and services.  Advertising and publicity function of commerce brings new products and new used of products to the notice of consumes there by improving the quality of life.

Commerce accelerates the rate of economic development by bringing different sectors of the economy closer to each other and by facilitating better use of resources.  It encourages new entrepreneurs who explore and mollies unknown and untapped resources.  Commerce also facilitates growth of a primitive economy into a market economy by inducing people to reproduce not simply for self-consumption but for sale.

A country facing scarcity and famine can import food gains through commerce.  Imports of food grains and life saving drugs helps to save millions of lives from starvation, disease and death.

Commercial interactions help to bring different countries together. Modern means of transportation and telecommunication bring about better mutual understanding between people.  Such unification of countries brings about harmony and peace in the world.  Different cultures and religions come closer to one another.

Economic activities or occupations are of three types
Business refers to the economic activities which are directed towards producing or acquiring wealth through buying and selling of goods and services.  Business is carried on by people to earn an income.  Generation of income or wealth involves production sale and exchange of commodities which human beings want.  In other words business is sale and exchange of commodities which human beings want.  In other words business is concerned with that part of production which is actually exchange and results in mutual benefit to both the buyer and the seller. Manufacturing mining trading transportation banking insurance and others are examples of business activities.

An activity which requires special knowledge and skill and which is under taken to earn a living within a prescribed code of conduct is called profession.  The services of lawyers chartered accountants doctors are considered as professions.  Person’s who render these services are known as professionals.  Members of a profession have their own professional association which exercises statutory control over their activities. Professionals are required to bane embalmers of the statutory control over their activities. Professionals are required to be members’ statutory association.

People who work for others and receive wages or salary in return are said to be in employment. They are know as employees and the persons for whom they work are called employers.  There is a relationship of master and servant here.  Workers employed in factories offices banks government departments etc. are in employment. They work as managers officers clerks peons sweepers and in various other capacities.

Economic activities mean all those human activities which are undertaken to earn a living these activities are directly or indirectly helpful for the satisfaction of human wants. The motive behind economic activities is economic gain. For example, a clerk works in an office, an advocate works in the court and a shopkeeper works in his shop. The rationale of economic activities is to satisfy human wants by providing goods and services. Economic activities may be carried on a small scale or on a large scale. In small scale economic activities, an individual is involved whereas in large scale economic activities, a group of persons are involved.

Non-economic activities refer to the human activities which are undertaken to meet personal. Social or religious obligations. These activities are inspired by love, patriotism, religion, etc. For example, a mother cooking food for hers family, a child flying kite in the air, a social worker helping visually challenged people in crossing the road are examples of non-economic activities. The motive behind these activities is not monetary gain. Non-economic activities do not result in economic gain.

Business: It means activities involving buying and selling of goods and services for the purpose of earning profits and acquiring wealth. Business activities are concerned with the production, purchase and sale of goods and services with the object of earning profits. Nosiness activities include joining. Manufacturing, trade, transportation, banking, insurance and others.

Profession: Profession means an occupation which involves the rendering of personal services of an expert nature in return for fees. For example, doctors are engaged in the medical profession, lawyers in the legal profession, and engineers in the engineering profession and chartered accountants in the accountancy profession. Theory is called professionals.

Employment: Employment means hiring f a person another for remuneration. An employee words under the direction and control of his employer and gets wages or a salary for his work. There exists a relationship of master and servant between the two parties. During he specified hours the employee works for his employer only and for nobody else.

To decide whether a particular activity is an economic or a nor-economic activity, the following points should be considered:

Aim of the Activity: The purpose of the activity is the most important ground for deciding whether an activity is economic or non-economic. The same activity may be economic for one purpose and non-economic for another purpose. The chief purpose of an economic activity is to generate income. For example, when a lady cooks food for monetary gain, it is an economic activity. But if the amen lady cooks food for hers family, it is a non economic activity.

Measurement of Result of the Activity: when the work done is measurable in terms of money, it is an economic activity. For example, services of a maid servant can be measured in terms of money and is, therefore, and economic activity. On the other had, services of a housewife cannot no measured in terms of money and is, therefore, a no economic activity.

Rational Behavior: In the normal course of life, a person desires to earn money in order to satisfy his wants. He seeks to obtain maximum return from his efforts. But work done for emotional reasons is non-economic activity. For example, a businessman wants to produce goods at the lowest possible cost to make maximum profit. On the other hand, a person engaged in religious or social service is willing to spend bother his money and time.

Legal Nature: Both economic and non-economic activities must be legal. Activities which are illegal, though resulting in economic gain, for example, smuggling, black-marketing, robbery and others cannot bane called economic activities. Only those human activities can be called economic activities which are performed in accordance with the laws of the land. Even non-economic activities whether social or religious must conform to law.