Classification of Business activities

Classification of Business activities

Business activities are classified on the basis of size, ownership and function.

1. Activities on the Basis of Size

On the basis of size, business activities may be broadly grouped into two categories.

a. Small Scale

Small scale units require less capital. They employ small number of workers and produce the goods on small scale. Example: Manufacturing textiles in handlooms or power looms.

(i) Extraction of edible oil from seeds like groundnut, sesame, through treditional wooden churner.

b. Large Scale

Large scale units require huge capital. They employ large number of workers and produce the goods on large scale.

Examples

·           Manufacturing Textiles in a large Textile mill. Example. Raymonds, Ramraj Cotton

·           Extraction of edible oil from oil seeds in oil mills. Example. Suffola, Sunflower

2. Activities on the Basis of Ownership

On the basis of ownership business activities may be broadly grouped into three categories.

a. Private Enterprises

An enterprise is said tobe a private enterprise where it is owned, managed and controlled by persons other than Government.

·           Sole proprietorship. Example - Sundar Stationeries

·           Partnership firms. Example - Ramesh Bros.

b. Public Enterprises

An enterprise is said to be a public enterprise where it is owned, managed and controlled by Government or any of its agencies or both. Public enterprises may be organized in several forms such as,

·           Departmental undertaking - Public Works Department (PWD)

·           Public Corporation - Oil and Natural Gas Corporation (ONGC)

·           Government Company - State Trading Corporation (STC)

C. Joint Enterprises

An enterprise is said to be a joint enterprise where it is owned, managed and controlled by Government and private entrepreneurs. Example - Maruti Suzuki

3. Activities on the Basis of Function

On the basis of functions, business activities may be broadly grouped into two categories.

a. Industry

Industry includes all those business activities which are connected with raising, producing or processing of consumer goods. Example - bread, butter, cheese, shoes, or capital goods like machinery.

b. Commerce

It establishes a link between the producers and consumers of goods and maintains a smooth and uninterrupted flow of goods from producers to consumers.