Introduction of Business Organization

Subject: Accountancy

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This note provides you with the introduction and meaning of Business organization.
Introduction of Business Organization

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Introduction

The human society requires different types of economic activities. Such economic activities are performed to fulfill the needs and wants of individuals and families as well as to uplift their living standards. The nature and volume of the economic activities largely depend on the economic prosperity of the society. These economic activities should be performed in an organized way and efficient manner for the optimum utilization of scarce resources. In order to make optimum utilization of available resources, an appropriate form of business organization with available resources should be selected. The development of the forms of business organization is connected with the development of industry and commerce.

Meaning and definition

The term 'business' refers to all the economic activities, which are carried on by individuals and organizations for generating incomes. It is concerned with the production and distribution of goods and services for earning the profit. It is centered on the service and satisfaction of the customers by fulfilling their needs and wants. It involves risk and uncertainty and committed to fulfilling its responsibilities.The term 'organization' refers to the act of bringing necessary resources for the production and distribution of goods and services and utilizing them in the best possible manner for achieving the definite objectives. The production and distribution of goods and services require a number of resources like men, materials, money, machine, and management. The organization is a means for bringing cooperation among these resources for continuous production and distribution of goods and services for fulfilling needs and wants of the customers.The term 'business organization' is composed of two terms as 'business' and 'organization'. Hence, the term business organization refers to the act of bringing resources and utilizing them in the best possible manner for the production and distribution of goods and services in order to earn profit through the service and satisfaction of the customers. It is concerned with the proper management of available resources for achieving the specified objectives of the business. The resources can be managed either by an individual or by the government. The following are some of the main definitions of business organization:

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"Business organization is the act of bringing into effective cooperation the available resources for production and distribution of goods with a view to earn the profit. " - Dr. A.N. Agarwala

"Business organization is a concern, company or enterprise which buys and sells, is owned by one group or group of persons and is managed under a specific set of operating policies." - Wheeler

Form of Business organization

Business can be established in various forms. It can be established and managed by an individual, group, government and other parties. so, on the basis of ownership and management, business organizations can be classified into the following forms:

  1. Sole trading Concern
  2. Partnership Organisation
  3. Joint Stock Company
  4. Public Enterprises
  5. Co-operative Society
  6. Multinational Company
Things to remember
  • The nature and volume of the economic activities largely depend on the economic prosperity of the society.
  • Business is centered on the service and satisfaction of the customers by fulfilling their needs and wants.
  • Organization refers to the act of bringing necessary resources for the production and distribution of goods and services and utilizing them in the best possible manner for achieving the definite objectives.
  • Business organization can be classified into the following forms:

    1. Sole trading Concern
    2. Partnership Organisation
    3. Joint Stock Company
    4. Public Enterprises
    5. Co-operative Society
    6. Multinational Company

     

  • It includes every relationship which established among the people.
  • There can be more than one community in a society. Community smaller than society.
  • It is a network of social relationships which cannot see or touched.
  • common interests and common objectives are not necessary for society.
Videos for Introduction of Business Organization
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Questions and Answers

Business organization refers to the management of available resources for the production and distribution of goods and services in order to earn profit through the service and satisfaction of the customers.

Business organization refers to the act of bringing resources and utilizing them in the best possible manner for the production and distribution of goods and services in order to earn profit through the service and satisfaction of the customers. It is concerned with the proper management of available resources for achieving the specified objectives of the business. The resources can be managed either by an individual or by government.

According to Dr. A.N. Agarwala, "Business organization is the act of bringing into effective cooperation the available resources for production and distribution of goods with a view to earn profit. "

According to Wheeler, "Business organization is a concern, company or enterprise which buys and sells, is owned by one group or group of persons and is managed under a specific set of operating policies."

From the above definitions, it is clear that business organization refers to the management of available resources for the production and distribution of goods and services in order to earn profit through the service and satisfaction of the customers.

The following are the forms of busness organization:

    1. Sole trading Concern
    2. Partnership Organisation
    3. Joint Stock Company
    4. Public Enterprises
    5. Co-operative Society
    6. Multinational Company
Quiz

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