1 CLASSIFICATION OF HUMAN ACTIVITIES
1.1 HUMAN ACTIVITIES
Human activities are the activities which human beings undertake. They are undertaken to satisfy human wants.
1.1.1 Characteristics:
1. Can be undertaken only by human beings
2. They continue throughout life
3. They have a very wide range
4. They are undertaken to satisfy human wants which are unlimited
5. They are performed for both earning money as well as for obtaining personal satisfaction
1.2 ECONOMIC ACTIVITIES
They are undertaken with the objective of earning income and creating wealth.
1.2.1 Characteristics:
1. Economic Motive
2. Rational Use
3. Productive
4. Economic Growth
5. Legally Valid
6. Socially Desirable
7. Economic Resources
1.3 NON-ECONOMIC ACTIVITIES
Activities used to satisfy social, religious, cultural, and sentimental requirements are called non-economic activities.
Basis Economic Activities Non-Economic Activities
Objective To earn a living and acquire wealth To obtain some sort of personal satisfaction
Expectation Income is expected from these activities Income is not expected from these activities
Relationship Directly related to income and wealth Not related to income and wealth
Measuremen Result can be measured in terms of money Result cannot be measured in terms of
t of outcome money
Resources Involves proper allocation and optimum use of Optimum allocation and use of resources
resources not essential
1.4 TYPES OF ECONOMIC ACTIVITIES
Business: Business includes all those economic activities which are concerned with production and exchange of
goods and services with the objective of earning profits. It is an economic activity because it is undertaken for
earning money and producing wealth. It creates various types of utilities.
Profession: The term profession means an occupation which involves the application of specialised knowledge and
skills to earn a living. They render personal services of a specialised nature to their clients.
FEATURES:
Specialised body of knowledge
Restricted Entry
Service Motive
Code of Conduct
Professional Association
Formal Education and Training
,Employment: Employment is an economic activity, where people work for others in exchange of some
remuneration.
FEATURES:
No capital is invested by the employee
In employment, a person works for others called employer
An employee provides personal services
He has to obey the orders of the employer
The employee gets wage or salary for his/her service
Basis Business Profession Employment
Risk High risk from beginning to Risk is negligible There is no risk
end
Reward Profit which is uncertain and Professional fee which is certain Wage or salary which is
variable but flexible regular and fixed
Nature Production, sale and exchange Providing specialised service Work assigned by the
employer
Qualifications No qualifications required Minimum educational Qualifications required
qualifications depending upon job
Objective To earn profits To render services for economic To earn wages or salary
gain
Advertising Usually necessary Prohibited by the professional Not necessary at all
body
Regulation Governed by business laws Governed by regulations and Governed by regulations and
condition of the profession guidelines of employment
Transfer of Ownership can be transferred Transfer is not possible Transfer is not possible
ownership
There is a close interrelation between business, profession and employment. Large business enterprise employs a
large number of people in order to achieve its objectives. It also requires the eservices of professionals like chartered
accountants, cost accountants, etc. Moder business has become very complex. Trained and experienced managers
and other experts are required for efficient business operations. Professonals and other employees provide the
necessary manpower for efficient running of business concerns. Thus business, employment and profession are
complementary to each other.
2 NATURE AND OBJECTIVES OF BUSINESS
Business may be defined as a human activity directed towards producing or acquiring wealth through buying and
selling of goods and services. -L.H. Haney
2.1 CHARACTERISTICS:
1. Creation of Utilities
2. Dealing in goods and services
3. Continuity in dealings
4. Profit Motive
5. Element of Risk
6. Art as Well as Science
7. Economic Activity
2.2 NECESSITY OF BUSINESS
1. To remove poverty
2. To generate employment
3. To earn foreign exchange
, 4. To improve standard of living
5. To promote social welfare
2.3 OBJECTIVES
Economic Objectives:
1. Innovations
2. Creating Customers
3. Earning profits
Social Objectives:
1. Supplying desired goods at reasonable prices
2. Fair remuneration to employees
3. Fair return to investor
4. Social Welfare
5. Payment of Government Dues
6. Employment Generation
Human Objectives:
1. Labour Welfare
2. Developing Human Resources
3. Participative Management
4. Labour-Management Cooperation
National Objectives:
1. Optimum Utilisation of Resources
2. National Self-Relaince
3. Development of backward areas
4. Development of small scale industries
5. Control over pollution
2.4 ROLE OF PROFIT
1. Survival
2. Incentive
3. Growth
4. Measure of Efficiency
5. Prestige and Recognition
Business and Social objectives are not contradictory. They go hand in hand in the long run. Business enterprises
cannot earn profits without providing satisfaction to consumers and other sections of the society. Similarly, business
cannot render services without earning profits. Thus, the real objective of business is to earn profits by the serving
the interests of consumers, employees, investors, Government and the society as a whole.
3 CLASSIFICATION OF BUSINESS ACTIVITIES
3.1 INDUSTRY
Industry means the production of goods for sale by the application of human or mechanical power.
Characteristics:
1. Production
2. Wide Scope
1.1 HUMAN ACTIVITIES
Human activities are the activities which human beings undertake. They are undertaken to satisfy human wants.
1.1.1 Characteristics:
1. Can be undertaken only by human beings
2. They continue throughout life
3. They have a very wide range
4. They are undertaken to satisfy human wants which are unlimited
5. They are performed for both earning money as well as for obtaining personal satisfaction
1.2 ECONOMIC ACTIVITIES
They are undertaken with the objective of earning income and creating wealth.
1.2.1 Characteristics:
1. Economic Motive
2. Rational Use
3. Productive
4. Economic Growth
5. Legally Valid
6. Socially Desirable
7. Economic Resources
1.3 NON-ECONOMIC ACTIVITIES
Activities used to satisfy social, religious, cultural, and sentimental requirements are called non-economic activities.
Basis Economic Activities Non-Economic Activities
Objective To earn a living and acquire wealth To obtain some sort of personal satisfaction
Expectation Income is expected from these activities Income is not expected from these activities
Relationship Directly related to income and wealth Not related to income and wealth
Measuremen Result can be measured in terms of money Result cannot be measured in terms of
t of outcome money
Resources Involves proper allocation and optimum use of Optimum allocation and use of resources
resources not essential
1.4 TYPES OF ECONOMIC ACTIVITIES
Business: Business includes all those economic activities which are concerned with production and exchange of
goods and services with the objective of earning profits. It is an economic activity because it is undertaken for
earning money and producing wealth. It creates various types of utilities.
Profession: The term profession means an occupation which involves the application of specialised knowledge and
skills to earn a living. They render personal services of a specialised nature to their clients.
FEATURES:
Specialised body of knowledge
Restricted Entry
Service Motive
Code of Conduct
Professional Association
Formal Education and Training
,Employment: Employment is an economic activity, where people work for others in exchange of some
remuneration.
FEATURES:
No capital is invested by the employee
In employment, a person works for others called employer
An employee provides personal services
He has to obey the orders of the employer
The employee gets wage or salary for his/her service
Basis Business Profession Employment
Risk High risk from beginning to Risk is negligible There is no risk
end
Reward Profit which is uncertain and Professional fee which is certain Wage or salary which is
variable but flexible regular and fixed
Nature Production, sale and exchange Providing specialised service Work assigned by the
employer
Qualifications No qualifications required Minimum educational Qualifications required
qualifications depending upon job
Objective To earn profits To render services for economic To earn wages or salary
gain
Advertising Usually necessary Prohibited by the professional Not necessary at all
body
Regulation Governed by business laws Governed by regulations and Governed by regulations and
condition of the profession guidelines of employment
Transfer of Ownership can be transferred Transfer is not possible Transfer is not possible
ownership
There is a close interrelation between business, profession and employment. Large business enterprise employs a
large number of people in order to achieve its objectives. It also requires the eservices of professionals like chartered
accountants, cost accountants, etc. Moder business has become very complex. Trained and experienced managers
and other experts are required for efficient business operations. Professonals and other employees provide the
necessary manpower for efficient running of business concerns. Thus business, employment and profession are
complementary to each other.
2 NATURE AND OBJECTIVES OF BUSINESS
Business may be defined as a human activity directed towards producing or acquiring wealth through buying and
selling of goods and services. -L.H. Haney
2.1 CHARACTERISTICS:
1. Creation of Utilities
2. Dealing in goods and services
3. Continuity in dealings
4. Profit Motive
5. Element of Risk
6. Art as Well as Science
7. Economic Activity
2.2 NECESSITY OF BUSINESS
1. To remove poverty
2. To generate employment
3. To earn foreign exchange
, 4. To improve standard of living
5. To promote social welfare
2.3 OBJECTIVES
Economic Objectives:
1. Innovations
2. Creating Customers
3. Earning profits
Social Objectives:
1. Supplying desired goods at reasonable prices
2. Fair remuneration to employees
3. Fair return to investor
4. Social Welfare
5. Payment of Government Dues
6. Employment Generation
Human Objectives:
1. Labour Welfare
2. Developing Human Resources
3. Participative Management
4. Labour-Management Cooperation
National Objectives:
1. Optimum Utilisation of Resources
2. National Self-Relaince
3. Development of backward areas
4. Development of small scale industries
5. Control over pollution
2.4 ROLE OF PROFIT
1. Survival
2. Incentive
3. Growth
4. Measure of Efficiency
5. Prestige and Recognition
Business and Social objectives are not contradictory. They go hand in hand in the long run. Business enterprises
cannot earn profits without providing satisfaction to consumers and other sections of the society. Similarly, business
cannot render services without earning profits. Thus, the real objective of business is to earn profits by the serving
the interests of consumers, employees, investors, Government and the society as a whole.
3 CLASSIFICATION OF BUSINESS ACTIVITIES
3.1 INDUSTRY
Industry means the production of goods for sale by the application of human or mechanical power.
Characteristics:
1. Production
2. Wide Scope
