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Nature and Scope of Business chapter 1, (Criteria, Profession, Employment,…

- - - - Profession is an occupation for which the individual has to acquire a special knowledge and skill.
      - Professionals charge/get a fee for providing a service.
      - Professionals are regulated by a professional body which tells them the code of conduct.
      - Professionals acquire specialised knowledge from colleges or universities.
      - Professionals mostly work on their own but sometimes my work in organisations
      - Example: Doctors have their private practice/private clinics or they may work in a hospital.
    - - Employment is a contract in which one person, The employee, agrees to perform work for another, the employer.
      - There are certain terms and conditions of work.
      - Employees get salary in return for their work.
      - Technical education or a specialised skill is not necessarily required for employment.
      - The main purpose is to get an assured income.
    - - Business refers to activities that involve production or exchange of goods and services regularly with the objective of earning profit.
      - The activities must be carried out regularly.
      - The main objective of business to earn profit.
      - Business requires some investment in the form of capital/money.
      - The earnings are always uncertain.
      - Example: TATA Group of Businesses
- - - - These industries are involved in activities of extraction of natural resources like coal, oil etc and reproduction and development of living organisms like plants and animals.
      - Extractive
      - Genetic
      - Example - ONGC, farmers
    - - Analytical industry which analyses and separates different elements from the same materials, as in the case of oil refinery.
      - Synthetical industry which combines various ingredients into a new product, as in the case of cement, cosmetics etc.
      - Processing industry which involves successive stages for manufacturing finished products, as in the case of sugar and paper.
      - Assembling industry which assembles different component parts to make a new product, as in the case of television, car, computer, etc.
  - - - Trade
        
        Refers to acquiring goods from one person or place to sell it to another person or at another place.
        
        Trade involves actual buying and selling
        
        Traders help with the distribution of goods
        
        Trading helps in equalising demand and supply.
      - Internal trade - Trade that happens within a country is called internal trade. Both the buyer and seller are from the same country.
      - External trade - Trade that takes place between different countries is known as external trade.
      - EXPORT - Country A sells goods from Country A to Country B
      - IMPORT - Country A buys goods from Country B and sells it in country A
      - ENTREPOT - Country A buys goods from Country B and sells it to Country C
    - - Aids/Auxiliaries to Trade
        
        Transportation - Carrying of goods physically from Delhi/Singapore to Chennai.
        
        Warehousing - Systematic storage of goods once the goods are received at Chennai.
        
        Banking- Arranging money and making payments to the seller through banks and other sources.
        
        Insurance - Covering risk of damage/loss of goods in transit from Delhi/Singapore or while it is in store.
        
        Communication - Exchange of information with each other through postal and telecom services
        
        Advertising - To attract customers towards his product, a producer has to provide full knowledge of his product to the customer. Advertising enhances the knowledge of the customer about the products available in the market.