Business Studies 4 Marks Question

Entrepreneurship development aims at individuals who want to start or possibly expand a business.
i. Entrepreneurship development programmes motivate people to establish a new business which in turn creates employment opportunities.
ii. It helps in the formation of capital.
iii. Entrepreneurship development programmes aids in the formulation of projects.
iv. It helps in distributing economic activities in all the areas of the country thus resulting in balanced regional growth.
v. It also helps the entrepreneur to use local resources.
vi. Entrepreneurship development programmes help in creating employment opportunities which in turn leads to improvement in the standard of living
vii. Entrepreneurship development is the means of enhancing knowledge and skills of entrepreneur through several classrooms and programmes and training.

Since business organisations are a part of society, they must have a positive attitude towards the needs of society. Business is only a subsystem of society and this subsystem must contribute to the welfare of the main system. Therefore, the decisions taken by the manager should take into consideration the welfare of not only his organisation but also the welfare of other subsystems (different parts of society like customers, shareholders, employees, etc.) so that the entire society or the complete system is benefited. When one subsystem thinks of the welfare of the other subsystems, the others also come to its help which finally results in the welfare of all.

The advantages of being an MNC is:
i. Huge Capital Resources: These enterprises are characterized by possessing huge financial resources and the ability to raise funds from different sources. They are able to tap funds from various sources. They may issue equity shares, debentures or bonds to the public. They are also in a position to borrow from financial institutions and international banks. They enjoy credibility in the capital market.
ii. Foreign Collaboration: Global enterprises usually enter into agreements with Indian companies pertaining to the sale of technology, production of goods, use of brand names for the final products, etc. These MNCs may collaborate with companies in the public and private sector.
iii. Advanced Technology: These enterprises possess technological superiorities in their methods of production. They are able to conform to international standards and quality specifications. This leads to the industrial progress of the country in which such corporations operate since they are able to optimally exploit local resources and raw materials. Computers and other inventions have come due to the technological advancements provided by MNCs.
iv. Product Innovation: These enterprises are characterized by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs of existing products. Qualitative research requires huge investment which only global enterprises can afford.

Difference between traditional business and e-business:

Basis of difference	Traditional business	e-business
Ease of formation	It is difficult to form.	It is very simple to form.
Cost of setting up	The cost of setting up is high.	The cost of setting up is low.
Physical presence	It requires physical presence.	It does not require physical presence.
Business processes and length of the cycles	The business process cycle is long.	The business process cycle is short.
Government patronage	Shrinking	Increasing(IT sector is among the topmost priorities of the government)

Following are the important auxiliaries to trade:
i. Transportation and communication: Production of goods generally takes place in a particular location, But these goods are demanded consumption in different parts of the country. This hindrance of place can be removed by transportation-road, rail or coastal shipping, etc. In the same way, the hindrance of information is removed by communication. Communication helps in the exchange of information between producers, consumers, and traders.
ii. Banking and finance: Banks and financial institutions provide credit facilities to provide finance for the smooth flow of business activities. Other facilities like collection and deposit of cheques, issue of bank draft, discounting of bills of exchange, etc. are also provided by banking institutions.
iii. Insurance: Risk is inherent in the business. The insurance sector provides protection from some of the risks faced by businesses. These risks mainly include theft, burglary, fire, accident, etc, and helps the businessman to focus on the primary and operating activities.
iv. Warehousing: Goods are not consumed immediately when these are produced usually there is a time gap between production and consumption of goods special arrangement has to be made to store the goods to prevent the loss of goods and to keep them fresh. Warehousing helps the businessman to overcome the problem of storage by creating time utility.

Along with economic objectives, the business also has social objectives which are as follows:
i. Supply good quality products: Businessmen should produce and supply products of proper quality and at reasonable prices to satisfy the expectations of consumers.
ii. Avoidance of unfair trade practices: Practices such as black marketing, adulteration, etc. should be avoided.
iii. Employee welfare: Employers should provide good working conditions, fair and just treatment, and impressive wages along with social security to their employees.
iv. Generation of employment: A businessman must create employment opportunities so that different sections of the society can earn their livelihood.
v. Conservation of the environment: Business enterprises should take the necessary steps to protect the environment. A proper arrangement should be made for the disposal of effluents, wastes, etc.
vi. Contribution to social welfare: Business plays a proactive role in the general welfare of society. The Business lends support to social, cultural, religious, research, and development organizations by building schools, hospitals, etc.

The disadvantages of departmental stores are as follows:
i. Lack of personal attention: Large size of the store makes it difficult to provide adequate personal attention to all the customers.
ii. High possibility of loss: Due to large-scale operations, the possibility of losses are high in these stores. Losses are like loss of theft, pilferage, etc For example, in case of a change in fashion, the store has to sell out-of-fashion goods in the clearance sale at heavy discounts.
iii. High operating cost: Because of the various services offered by the store to its customers, the operating cost is high. High operating cost increases the price of the goods and hence these stores are not attractive for lower-income groups.
iv. Inconvenient location: Since these stores are centrally located, it is not convenient for the purchase of goods required immediately.
v. High risk: There is a greater risk as the success of departmental store depends on continued prosperity.

i. At 'Geeta Pustak Bhandar' only religious books are sold out. This type of shop is known as the Single Product Store. These traders deal in only one type of goods. They keep all the varieties of this type of goods. For example, there will be religious books of all religions available with the trader dealing in religious books.
ii. At 'Kapoor Pustak Bhandar' all kinds of books are sold out. This type of shop is known as Single Line Store. These traders deal in one product. They keep goods of all types of the class, the product of which they deal in.