Business may be understood as the organized efforts of enterprises to supply consumers with goods and services for a profit. Business varies in size, as measured by the number of employees or by sales volume. Large organizations such as Reliance industries, Tata, Godrej, etc count their employees in the hundred thousands and their sales revenues in crores. But, most business units in our country even today are small units independently owned and managed and employees are fewer.
Whether a business unit has one or two people working at home, 10 operating in a retail store, 1000 employed in a factory or 1,00,000 operating in multiple units spread across the country, all business share the same purpose: to earn profit.
Business is an important institution in the society. Be it for the supply of goods and services; creation of job opportunities; offer of better quality of life; or contributing to the economic growth of the country and putting it on the global map; the role of business is crucial. Society cannot do without business. It needs no emphasis that business needs society as much.
Scope of business:
The scope of business is vast. Let us assume, u have decided to buy a car. Behind your purchase, there is a supplier of raw material, there is the manufacturer who converts these raw materials and other inputs into usable vehicles; there is a dealer who makes vehicle available to you at a place convenient to you; there is transport agent who assists in moving materials to the manufacturing plant and vehicles from plant to market; there is banker to finance various activities; there is an advertising agency which tells you about the vehicles; there is an insurance agent who assumes risk on your behalf; and a host of other activities. Not only your car, even a simple item such as a pencil necessitates a long chain of activities so as to make your purchase possible.
The multitudinous activities involved in bringing raw materials to the factory and the end product from there to the market constitute a business. In other words, business includes all activities connected with production, trade, banking, insurance, finance, advertising, packaging and numerous other related activities. Business also includes all efforts to comply with legal restrictions and government requirements and discharging obligations to consumers, employees, owners and other interested groups, which have stakes in business directly or indirectly.
Business is all above activities carried out and being organized with an important purpose i.e. earn profit by supplying goods and services to consumers to satisfy their felt needs. Thus, people occupy a central place around whom, and for whom business is run.