Types of Economic Activities
Economic activities are undertaken to
earn money. Generally, people engage themselves in such activities on a regular
basis and are said to be engaged in their occupation. Occupations may be
classified into three categories based on the following:
A. Employment
B. Profession
C. Business
It refers to the occupation in which
people work for others and get remuneration in the form of wages or salaries. The
one who is employed by others are called employees and the one who employs
others is called employer.
Managers, Clerks, Bank officials,
Factory workers etc., are examples of employees.
There is a contract existing between the
employer and the employee. Employee performs according to assigned task.
Remuneration is given to employees for delivering value of services. An
employee must abide by the rules and regulations of the organization.
Professions are those occupations which
involve rendering of personal services of a special and expert nature. A
profession is something which is more than a job. It is a career for someone
who is competentin their respective areas. It includes professional activities
which are subject to guidelines or codes of conduct laid down by professional
bodies. Those engaged in a profession are called professionals and they earn
income by charging professional fee.
There should be a systematic body of
knowledge. There should be formal acquisition of knowledge by the members.
There should be a code of conduct governing the conduct and behaviour of
professionals. Service motive should be uppermost in the minds of people
rendering professional service.
Business refers to any human activity undertaken onaregular
basis with the object to earn profit through production, distribution, purchase
and sale of goods and services.
Business may be defined as “an activity involving regular production or purchase of goods and services for sale, transfer and exchange with an object of earning profit”.
According to James Stephenson business refers to “Economic activities performed for earning profits.”
According to H.Haney, “Business may be defined as a human activity directed towards producing or acquiring wealth through buying and selling of goods”.
Business activities are connected with raising, producing or processing of goods. Industry creates form utility to goods by bringing materials into the form which is useful for intermediate consumption (i.e., further use of material in order industry) or final consumption by consumers.
Business activities are classified on
the basis of size, ownership and function.
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
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
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.
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