What Is The Nature And Scope Of Business?

Business includes all those legal activities, which are undertaken for the purpose of earning profit. It means the ultimate objective of business id to earn profit. Hence all illegal activities (smuggling, gambling and robbery) social activities, self-consumption and gifts etc are excluded from the definition of business.

Scope of Business:

Scope of business is very broad. It includes all those activities, which are related to the production and distribution of goods and services with an objective of earning profit.

Industry: Industry is a part of business. The purpose of industry is to convert the basic raw material into finished or semi finished goods. Industry can be divided into two parts.

Primary Industry: Primary industry is concerned with the production of raw material.

• Genetic Industry: The genetic industry is concerned with the breeding of plants and animals etc.

• Extractive Industry: In this industry hidden resources below the surface of earth are extracted like extraction of oil, gas and coal etc.

Secondary Industry: This industry is concerned with the conversion of basic raw material into finished or semi finished goods. Basic raw material is received from the primary industry. This industry can also be divided into two types.

• Constructive Industry: All kinds of construction are included in this type of industry like construction of roads, buildings, bridges etc.

• Manufacturing Industry: In this industry raw material is converted into some finished or semi finished goods like textile mills, sugar mills etc.

Definition of Business:
“All the human legal activities to earn profit through purchasing and selling the products is known as business.” Human activities are divided into two parts.
• Economical
• Non-Economical
Economical:
These activities are mainly concerned with money or wealth.
For example:
1. A person goes to his office or attends a factory or workshop or attends his shop or hotel to sell certain article in order to earn money is known as economical activities.
2. When a man goes to deposit money in the bank, he is concerned with money therefore this activity is also known as economical activity.
Non-economical:
These activities are performed for pleasure or out of love out of pity out of patriotism. For example:
If a singer sings a song for his pleasure and not for any income, his activity will be a non-economical activity. And if he sings a song at a function and receive remuneration (money), it will be an economical activity.
Religious Activity: Worshipping of God and giving donation for the construction of a Mosque.
Economical Activities are divided into two parts.
• Industry
• Commerce
Types of Industries:
There are five main types of industries.
1. Manufacturing Industries
2. Service Industries
3. Construction Industries
4. Genetic Industries
5. Extractive Industries
Manufacturing Industry:
Manufacturing industries are those industries which convert raw material or Semi-finished goods into finished products.
Services Industries:
Service industries did not produce in-tangible goods, they only provide services to there customers for example, Retailer, Transport, Food services as well as others.
Construction Industries:
These types of industries are concerned with construction of dams, buildings, roads and etc.
Genetic industries:
Genetic industries refer to those industries under which plants and animals are grown for the purpose of sale.
Extractive Industries:
These types of industries are concerned with supplying of Commodities, which is extracted from earth like minerals, oil, petrol etc. The product of these industries are generally used by manufacturing industries for making finished goods.