Overview of business

Q1.What do you mean by business? Narrate its importance in the modern era. 

Ans.
Business : 
(i) Business is a legally recognized organization that provides goods, and/ or services to customers in exchange for money, e.g. Tata Motors, Infosys, BHEL, Reliance, ACC, etc. 
(ii) Business is a commercial, industrial or professional activity undertaken by an individual or a group, e.g. the purchase and sale of goods, providing services, etc. in an attempt to make a profit. 
(iii) The business may refer to a particular area of economic activity, such as the real estate business, computer business, poultry farming, telecommunication, shipping, tours, and travels, etc. Most businesses are privately owned and formed to earn a profit. In other words, the owners of a business have one of their main objectives as the generation of financial returns in exchange for expending time, effort and capital. 

Importance of business in the modern era: 

Business, which one could refer to as economics, is important to society because it fundamentally deals with the allocation of resources throughout the world. These resources always be a higher demand for resources than there will actually be available: Economics devices what resources are made available, how they are produced and who gets them. Business exists because the functioning of a robust economy is essential to the goal of allocating resources properly. Businesses are often key players in preventing economies from becoming stagnant or crashed. Governments commonly suffer from unemployment, where no work is available to citizens and so they are stricken with poverty. Businesses can create jobs and provide salaries to people who need resources, like the money from a salary to survive. Furthermore, governments also suffer from inflation problems, where the value of a currency dips and becomes less effective. Businesses can help stem this problem by enacting policies that bring value back to currencies.

Q2. Explain its main characteristics of business?

Ans. The main characteristics of a business are as follows: 

(i) Economic Activity: Business is considered to be an economic activity because it is undertaken to earn money or livelihood 

(ii) Production or Procurement of Goods and Services: Goods are offered to consumers after they are either produced or procured by business enterprises. Thus, every business enterprise either manufactures the goods it deals in or it acquires them from other producers, to be further sold to consumers or users. 

(iii) Sale or Exchange of Goods and Services: Business involves transfer or exchange of goods and services for value addition. If goods are produced for self-consumption and not for selling purposes, it cannot be called a business activity Cooking food at home for the family is not business, but cooking food and selling it to others in a restaurant is business. Thus, one essential characteristic of business is that there should be a sale or exchange of goods or services between the seller and the buyer. 

(iv) Regular Dealings in Goods and Services: Business involves dealings in goods or services regularly. Therefore, one single transaction of sale or purchase does not constitute a business. 

(v) Profit Earning: One of the main objectives of the business is to earn profit.No business can survive for long without earning profit. It is a source of income for business persons and a source of finance for meeting the expansion requirements of the business. 

(vi) Uncertainty of Return: Uncertainty of return refers to the lack of surety relating to the amount of money that the business is going to earn in a given period. Every business invests capital in its activities to earn the profit. But it is not certain as to what amount of profit will be earned. There is even a possibility of losses being incurred even after the best efforts. 

(vii) The element of Risk: Risk involves the possibility of inadequate profits or even losses due to uncertainties or unexpected events. It is caused by some unfavorable or undesirable events. The risks are related to certain factors like changes in consumer tastes and fashions, changes in methods of production, strike or lockout in the workplace, increased competition in the market, fire, theft, accidents, natural calamities, etc. No business can eliminate risks.

Q3. Explain various types of businesses? 

Ans.

Types of Business: 

There are many types of businesses, which can be grouped into three categories: Service, Manufacturing and Trade.

(a) Service: Service businesses offer services and make a profit by charging for labor or other services provided to customers. The output of the service sector may be information, service attention, advice, experiences, discussion and the like. Examples of the service sector include news media, hospitality industry (e.g. restaurants, hotels, casinos), consulting, legal practice, healthcare/ hospitals, waste disposal, real estate, personal services, business services, house decorators, entertainers and the like.
(b) Manufacturing: Manufacturers make products, from raw materials or component parts, which they then sell at a profit. Companies that make physical goods, such as cars, pens, TV, watches, fans, refrigerators, air conditioners, mobiles and the like are called manufacturers.
(c) Trade: Traders act as middlemen in getting goods produced by manufacturers to the consumer. Traders make a profit (as a result of providing sales or distribution services) in the form of commission. Examples of traders include retailers, distributors, dealers, sub-dealers and so forth. Most consumer-oriented stores, e.g. More, D mart, Lifestyle, Central, Croma, etc. are distributors or retailers.

Q4.What are the various types of industrial sectors? Explain in brief?
 OR
Q4.Discuss in brief the Engineering industry, Process industry, Textile industry, Chemical industry, and Agro-Industry? 

Ans. 
(a) Engineering Industry: 

• The Engineering industry primarily deals with the design, manufacture, and operation of structures, machines or devices. 
• The Engineering industry primarily comprises sectors like civil, electrical electronics, aeronautical, industrial, mechanical and chemical.
• Civil engineering is basically concerned with activities like planning, construction, designing or building of structures. 
• Chemical engineering is concerned with the construction, design, and operation of plants and machinery of chemical products.
• Electrical engineering deals with the design and manufacturing of devices for generation, transmission, distribution, and utilization of electricity.
• Electronics engineering is concerned with the designing and manufacturing of electronic devices like televisions, music systems, mobile phones, etc.
• Computer engineering deals with many hardware and software aspects of computing, from the design of individual microprocessors, personal computers, and supercomputers to circuit design. 
• Mechanical engineering deals with designing and manufacturing of power plants, refrigerators, air conditioners, engines or related devices. 
• Industrial engineering is concerned with the processing of production like laying out plants, material handling, industrial safety and managing inventory,, labor, etc.
• Aeronautical engineering is concerned with designing, manufacturing, and maintenance of aircraft, missiles, etc. 
• Major engineering Companies in India are BHEL, L&T, IRB Infrastructures, Bharat Electronics, Tata Steel, Tata Motors, Bharat Forge, Hindustan Aeronautics, etc. 

(b) Process Industry:

• The process industry refers to manufacturing that is associated with formulas and manufacturing recipes.
• In process manufacturing, once an output is produced it cannot be rolled back to its basic components. In other words, “once you put it together, you cannot take it apart”. E.g. Juice cannot be put back into the mango. 
• Some examples of process industries are food, beverage, chemical, pharmaceutical, paints and coatings, petroleum, ceramics, plastics, rubber, textiles, tobacco, wood and wood products, paper and paper products, and biotechnology industries. 
• Major processing Companies in India are Cadbury, Amul, Ranbaxy, Cipla, Asian Paints, johnson Ceramics, etc. 

(c) Textile Industry: 

• In the textile industry fiber is converted into yarn, then fabric, then textiles. These are then fabricated into clothes and other products.
• Textile industry can be divided into several segments, some of which are: – Cotton Textiles – Silk Textiles – Woolen Textiles – Readymade Garments – Hand-crafted Textiles – Jute and Coir
• Textile is a major industry. According to statistics, the present global textile market is worth more than Rs.20 lakh crores.
• The Indian textile industry largely depends upon textile manufacturing and export. India earns about 27 percent of its total foreign exchange through textile exports. 
• Further, the textile industry of India also contributes nearly 14 percent of the total industrial production of the country. It also contributes around 3 percent to the GDP of the country. 
• Indian textile Companies in India are Century textiles, Bombay Dying, Reliance, Arvind, Raymonds, S Kumars, etc. 

(d) Chemical Industry: 

• The chemical industry comprises companies that produce industrial chemicals. 
• Chemical industries produce more than 50,000 different products. About 75 percent of the industry’s output consists of polymers and plastics.
• According to statistics, the present global chemical market is worth more than Rs. 135 lakh crores.
• The chemical industry can be divided into 4 categories

(e)Agro-Industry: 

• The Industry that uses plant and animal products as their raw material is called agro-industry.
• The agro-industry mainly comprises the processing and preservation of agricultural products for consumption. 
• The agro-industry is broadly categorized in two-three types: 

1. Village Industries: These are owned and run by rural households with very little capital investment and a high level of manual labor. Products of village industries include pickles, papad, basket making, etc.
2. Small scale industry: These are characterized by medium investment and semi-automation. Examples of small scale industries are honey, jam, edible oil, rice mills, etc.
3. Large scale industry: These involve large investment and a high level of automation. Sugar, jute and cotton mills are an example of the large scale sector.

• The agro-industry helps in processing agricultural products such as crops, livestock and fisheries and converting them to edible and other usable, forms. 
• The global market for sugar, coffee, tea and processed foods such as sauce, jelly, honey, meat, spices and fruits and the like is huge. 
• India is the second-largest producer of food in the world. Major agro Companies in India are- ITC, HLL, Nestle, Gini Mills, Renuka sugars, Mapro Industries, etc.

Q5. Explain globalization? What are the advantages and disadvantages of globalization concerning India? 

Ans.

• Globalization is the process of transformation of a regional phenomenon into a global one. Globalization is a process by which the people of the entire world are unified into a single society and function together. 
• Globalization is generally used to refer to economic globalization, i.e. Globalization is the process of integrating national economies into the international economy through, trade, foreign investment, migration, and the spread of technology.
• The barriers to international trade have been considerably lowered through the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). Globalization has increased across the world in recent years due to the fast progress in the field of technology, especially in communications and transport. 

Advantages: 

The various beneficial effects of globalization on the Indian industry are:

1. Globalization has brought in huge amounts of foreign investments into the industry.
2. The huge amounts of foreign direct investments boosted the Indian economy quite significantly. 
3. Many foreign companies have set up industries in India. Which has helped to provide employment to many people in the country? This helped reduce the level of unemployment and poverty in the country. 
4. Many Indian companies acquired or set plants elsewhere in the world (e.g. Tata Motors, Crompton Greaves, etc.) 
5. Foreign companies brought in highly advanced technology with them and this helped to make the Indian industry more technologically advanced. 

Disadvantages: 

1. The global market calls for improved productivity and increased competition, therefore Indian industries have to upgrade their products and invest in the latest technology. 
2. Globalization increased competition in the Indian market between foreign companies and domestic companies. 
3. With foreign goods being better than Indian goods, consumers prefer to buy foreign goods. This reduced the amount of profit of the Indian Companies. 
4. Though overall employment is increased in some industries with the coming of technology the number of labor required decreased and this resulted in many people being removed from their jobs. 
5. Due to less environmental regulation, globalization may increase pollution in India.

Q6.What is Intellectual property Right? Explain its types. 

Ans.

Intellectual property Right: 

The term ‘Intellectual Property’ (IP) refers to the creation of the human mind like inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. IP is divided into two categories: 

(1) Industrial property: Which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and 

(2) Copyright: Which includes literary and artistic works such as novels, poems, and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.
Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.

IPR- IPR is temporary grants of monopoly intended to give economic incentives for innovative activity. IPR exists in the form of patents, copyrights, and trademarks.
Copyright: Copyright is the legal right to have control over the work of a writer, artist, musician, etc. If a person owns the copyright on something, it is his intellectual property and others must pay him to broadcast, publish or perform it. The symbol of copyright is shown below

Patent: Patent is an official document that gives someone who has invented something the legal right to make or sell that invention for a particular period and prevents anyone else from doing so. fr example design of a mechanism, calculator, car-bicycle, mobile, shoe and like

Trademark: Trademark is a name or design belonging to a particular company used on its products. Trademark is denoted by TM and a registered trademark is denoted by R in the circle as shown in the figure. Some examples of trademarks are shown in the following figure.