NATURE AND SCOPE OF BUSINESS Module - 1
Introduction to Business
1
Note
NATURE AND SCOPE
OF BUSINESS
In your day-to-day life you may be engaged in several activities. However, when
someone asks you as to what you want to become in your life or what you want to do
in future, your answer may be - "I want to join a suitable job or I want to become a
doctor, an engineer, a dancer or a musician", or you may say, "I want to do my own
business". But why do you want to do any of such activities? Obviously, it is mainly to
earn your livelihood. Broadly speaking, every human activity in which one is engaged
for the purpose of earning one's livelihood is known as economic activity. In this lesson
we shall learn about all such activities, their categorisation and some other related
aspects.
LEARNING OUTCOMES
distinguishes between the needs and wants of society;
justifies how the needs of the society can be satisfied by pursuing numerous
economic activities; and
identifies an economic activity as per their interests and skills.
1.1 HUMAN ACTIVITIES
Every human being is engaged in one activity or the other. It may be cultivating land,
preparing food, playing football, reading storybooks, studying in a school, teaching in
a college, working in an office, jogging in the park and so on. If you try to ascertain as
to why individuals engage themselves in one activity or the other, you will find that by
doing such activities they are trying to satisfy some of their needs or wants. All these
activities which human beings undertake to satisfy their needs or wants are called
human activities.
Business studies (319) Senior Secondary 1
, Module - 1 NATURE AND SCOPE OF BUSINESS
Introduction to Business However, even if all human activities satisfy the needs and wants, they differ from each
other in terms of the purpose for which they are undertaken and the end result. For
example, let us take the activity of preparing food - one prepared by a mother at home
for her family and the other by a cook in a hotel. Here, you will notice that the purpose
and end result of the activity of preparing food (a) by a mother and (b) by a cook
Note varies. In the first case, the purpose is to feed the family members without any expectation
of monetary return while in the second case, cooking food is a part of his job so as to
earn money in terms of salary or wage. The end result in the first case is 'self-satisfaction'
and looking after the family, while in the second case it is 'earning money' for livelihood.
The human activities that are undertaken with an objective to earn money or livelihood
are called economic activities. A farmer growing crops, a worker working in a factory
for wage/salary, a businessman engaged in buying and selling of goods are examples
of economic activities.
Whereas the other types of activities that are undertaken to derive self-satisfaction,
are called non-economic activities. While activities like meditation, engaging in sports
for physical fitness, listening to music, providing relief to flood victims etc., are examples
of non-economic activities.
Economic Activities
HUMAN Busines Profession Employment
ACTIVITIES
Non-Economic Activites
Figure: 1.1 Human Activities
INTEXT QUESTIONS 1.1
1. Define 'Economic Activities?
2. Below are given certain non-economic activities. Convert them into economic
activities:
Example: A nurse attending her ailing son. (Non-economic activity)
A nurse attending patients in the hospital. (Economic activity)
(a) A person working in his own garden.
(b) A lady preparing food for her husband.
2 Business studies (319) Senior Secondary
, NATURE AND SCOPE OF BUSINESS Module - 1
(c) A man white-washing his own house. Introduction to Business
(d) A teacher teaching his son at home.
(e) A Chartered Accountant preparing his own accounts.
1.2 CLASSIFICATION OF ECONOMIC ACTIVITIES
Note
Economic activity can be a one-time activity or a continuous one. For example, you
know how to stitch clothes and one day you stitch a shirt for your friend and he pays
some money to you. Of course, this is an economic activity as you have some monetary
gain but it is a one-time activity. But, if you start stitching shirts on a continuous basis
and charge money for that, you are said to be engaged in some continuous or regular
economic activity. It may be noted that by getting themselves engaged regularly in a
particular economic activity people try to earn their livelihood. So, the economic activities
in which individuals engage themselves on a regular basis and earn their livelihood are
known as their 'occupations'.
In fact, everyone is engaged in one occupation or the other, and these can be broadly
categorised as -
(a) Profession;
(b) Employment; and
(c) Business
Let us know a few more details about these occupations.
1.2.1 PROFESSION
You are aware of doctors. Who they are and what do they do? They are basically
individuals who have a special knowledge and training to examine the patients, find out
the ailment, if any, and then treat them to be cured from such ailment. And, for doing all
these they charge a fee from patients. Similarly, we have Chartered Accountants who
specialise in matters related to accounts, taxes etc. and help people and organisations
in such jobs for a fee. If we look further, we find Engineers, Architects, Film-stars,
Dancers, Artists and many others engaged in their own field having specialised knowledge
and training. They are all known as professionals and the activities they are engaged in
are called profession.
In order to gain clarity on the concept of a profession, let us look at its basic features
which can be summarised as follows:
(a) Profession is an occupation for which the individual has to acquire a special
knowledge and skill.
Business studies (319) Senior Secondary 3
Introduction to Business
1
Note
NATURE AND SCOPE
OF BUSINESS
In your day-to-day life you may be engaged in several activities. However, when
someone asks you as to what you want to become in your life or what you want to do
in future, your answer may be - "I want to join a suitable job or I want to become a
doctor, an engineer, a dancer or a musician", or you may say, "I want to do my own
business". But why do you want to do any of such activities? Obviously, it is mainly to
earn your livelihood. Broadly speaking, every human activity in which one is engaged
for the purpose of earning one's livelihood is known as economic activity. In this lesson
we shall learn about all such activities, their categorisation and some other related
aspects.
LEARNING OUTCOMES
distinguishes between the needs and wants of society;
justifies how the needs of the society can be satisfied by pursuing numerous
economic activities; and
identifies an economic activity as per their interests and skills.
1.1 HUMAN ACTIVITIES
Every human being is engaged in one activity or the other. It may be cultivating land,
preparing food, playing football, reading storybooks, studying in a school, teaching in
a college, working in an office, jogging in the park and so on. If you try to ascertain as
to why individuals engage themselves in one activity or the other, you will find that by
doing such activities they are trying to satisfy some of their needs or wants. All these
activities which human beings undertake to satisfy their needs or wants are called
human activities.
Business studies (319) Senior Secondary 1
, Module - 1 NATURE AND SCOPE OF BUSINESS
Introduction to Business However, even if all human activities satisfy the needs and wants, they differ from each
other in terms of the purpose for which they are undertaken and the end result. For
example, let us take the activity of preparing food - one prepared by a mother at home
for her family and the other by a cook in a hotel. Here, you will notice that the purpose
and end result of the activity of preparing food (a) by a mother and (b) by a cook
Note varies. In the first case, the purpose is to feed the family members without any expectation
of monetary return while in the second case, cooking food is a part of his job so as to
earn money in terms of salary or wage. The end result in the first case is 'self-satisfaction'
and looking after the family, while in the second case it is 'earning money' for livelihood.
The human activities that are undertaken with an objective to earn money or livelihood
are called economic activities. A farmer growing crops, a worker working in a factory
for wage/salary, a businessman engaged in buying and selling of goods are examples
of economic activities.
Whereas the other types of activities that are undertaken to derive self-satisfaction,
are called non-economic activities. While activities like meditation, engaging in sports
for physical fitness, listening to music, providing relief to flood victims etc., are examples
of non-economic activities.
Economic Activities
HUMAN Busines Profession Employment
ACTIVITIES
Non-Economic Activites
Figure: 1.1 Human Activities
INTEXT QUESTIONS 1.1
1. Define 'Economic Activities?
2. Below are given certain non-economic activities. Convert them into economic
activities:
Example: A nurse attending her ailing son. (Non-economic activity)
A nurse attending patients in the hospital. (Economic activity)
(a) A person working in his own garden.
(b) A lady preparing food for her husband.
2 Business studies (319) Senior Secondary
, NATURE AND SCOPE OF BUSINESS Module - 1
(c) A man white-washing his own house. Introduction to Business
(d) A teacher teaching his son at home.
(e) A Chartered Accountant preparing his own accounts.
1.2 CLASSIFICATION OF ECONOMIC ACTIVITIES
Note
Economic activity can be a one-time activity or a continuous one. For example, you
know how to stitch clothes and one day you stitch a shirt for your friend and he pays
some money to you. Of course, this is an economic activity as you have some monetary
gain but it is a one-time activity. But, if you start stitching shirts on a continuous basis
and charge money for that, you are said to be engaged in some continuous or regular
economic activity. It may be noted that by getting themselves engaged regularly in a
particular economic activity people try to earn their livelihood. So, the economic activities
in which individuals engage themselves on a regular basis and earn their livelihood are
known as their 'occupations'.
In fact, everyone is engaged in one occupation or the other, and these can be broadly
categorised as -
(a) Profession;
(b) Employment; and
(c) Business
Let us know a few more details about these occupations.
1.2.1 PROFESSION
You are aware of doctors. Who they are and what do they do? They are basically
individuals who have a special knowledge and training to examine the patients, find out
the ailment, if any, and then treat them to be cured from such ailment. And, for doing all
these they charge a fee from patients. Similarly, we have Chartered Accountants who
specialise in matters related to accounts, taxes etc. and help people and organisations
in such jobs for a fee. If we look further, we find Engineers, Architects, Film-stars,
Dancers, Artists and many others engaged in their own field having specialised knowledge
and training. They are all known as professionals and the activities they are engaged in
are called profession.
In order to gain clarity on the concept of a profession, let us look at its basic features
which can be summarised as follows:
(a) Profession is an occupation for which the individual has to acquire a special
knowledge and skill.
Business studies (319) Senior Secondary 3
