There are various people and personalities who have defined business according to their perspectives. Before we get into the characteristics of business, some of the definitions for business are discussed below.
Prof. R. N. Owens definition of Business
“Business is an enterprise engaged in the production and distribution of goods for sale in a market or rendering of services for a price”.
L.R. Dicksee definition of Business
“Business is a form of activity pursued primarily with the object of earning profits for the benefit of those on whose behalf the activity is conducted”.
Urwick and Hunt definition of Business
“Business is any enterprise which makes, distributes or provides any article or service which other members of the community need and are willing to pay for.”
Haney definition of Business
“Human activity directed towards producing or acquiring wealth through buying and selling of goods”.
Peter F Drucker has drawn some conclusions about what a business is, what is useful from the business and how to understand the term business. His conclusions are listed below:
• Business is created and managed by the people.
• A group of people who will take decisions that will determine whether an organisation is going to prosper or
decline, whether it will survive or will eventually perish in market.
The characteristics of business are as follows:
• Business is to provide goods and services to the people. It provides the public with the things it needs and wants in order to survive, enjoy life and improve in a material sense. From the point of view of consumer, it satisfies the needs and desire of the customer and fulfils demands which should be provided by business in order to meet the requirements of the consumer in the society.
• Goods that have been produced or procured for sale in retail enter the realm of business. This activity of selling results in the creation of wealth for the society. In satisfying the demand, business uses the resources of land, labour and capital. These resources have little value when taken separately; but business combines them together to structure and refine the resources and add to the value of the society. Further, it is business which employs
people who exchange their talents for wages and salaries. Therefore, these people exchange their compensation for the desired goods and service.
• Business is a profit seeking activity firm. It supplies goods and services to customers, satisfy their demand and desire, and add to the society’s value by earning profit. Profit is the biggest stimulus for the survival of the business and its future development. Society has permitted business to earn profit as a reward for assuming the risks of operating it.
• Business is also an essential participant in the society. It satisfies the society’s demand of supplying goods and services, and earning profits. Business involves the most fundamental activities of the society. As a result, the society looks to business for something more than products, services and profits. It looks to business for leadership and direction in helping to achieve the society’s objectives.
• It expects business to assist in the establishment of a better service to the society.