Business Studies 4 Marks Question

Small scale industries comprise of small enterprises who manufacture goods or services with the help of relatively smaller machines and a few workers and employees.
Features of the small-scale industry:
i. Both the management and the control generally is with the owner/owners. So the owner is actively involved with the daily running of the business.
ii. These small scale industries tend to use labour and manpower for their production activities. So their dependence on technology is pretty limited.
iii. These units are more adaptable to their changing business environment. So in case of sudden changes or unexpected developments, they are flexible enough to adapt and keep carrying on. Large industries do not have this advantage.
iv. They use local and readily available resources. This also helps the economy with better utilization of natural resources and less wastage.

Business should work for the economic and social well-being of the community. The responsibilities of business towards society are as follows:
i. Maximum utilization of natural resources.
ii. To provide opportunities to public for meaningful work.
iii. To preserve social and cultural values.
iv. To uplift the weaker section of the society.

Some of the merits of Statutory corporations are as follows:
i. Operational flexibility: Statutory corporation is able to enjoy a high degree of flexibility in its operations, as it is free from unnecessary government controls and regulations.
ii . Non-interference by the government: Since the funds of these organisations do not come from the central budget, the government generally does not interfere in their financial matters, including their income and receipts.
iii. Autonomous organization: Statutory corporations have the autonomy to frame their own policies and procedures within the authority of the Act granted to them under the Special Act of Parliament or by State or Central Legislature.
iv. A valuable instrument for economic growth: These enterprises are considered to be an effective instrument for economic development because they have the power of the government along with the initiative of private enterprises

a. Esha intends to start e-business, whereas her father is following the traditional business.
b. The difference between e-business and traditional business is as follow:

S. No	Basis of distinction	Traditional business	e-business
1.	Ease of formation	The procedure involved in setting up the business is difficult.	The procedure involved in setting up the business is simple.
2.	Physical presence	Required	Not required
3.	Cost of setting up	High investment is needed	Investments are low as there is no need for physical facilities
4.	Operating cost	Operating cost is high due to fixed charges associated with an investment in procurement and storage, production, marketing, and distribution facilities.	The operating cost is low since the business operates on a network of relationships rather than ownership of resources.

Objectives represent the purpose for which an organisation has been started. Objectives guide and govern the actions and behavior of businessmen. Business objectives are the ends which a business organisation wants to achieve or accomplish over a specified period of time. These may be to earn profit for its growth and development, to provide quality goods to its customers, to protect the environment, etc.
The objectives of the business are as follows;
a. Economic Objectives are the objectives pursued to achieve the profit motive.
b. Social Objectives are the objectives pursed or desired to be achieved for the benefit of society.
c. Human Objectives refer to the objectives aimed at the well-being as well as the fulfillment of expectations of employees.
d. National Objectives are the objectives in order to serve the nation, business is an important element of the economy should have a goal to fulfill national goals and aspirations of its people.
e. Global Objectives are the aspirations of an entrepreneur to spread business across the borders and supplying quality products at reasonable prices.
f. Global Objectives

The term 'business risk' refers to the possibility of inadequate profits or even losses due to uncertainties e.g. changes in tastes and preferences of consumers, strike, increased competition, change in Government policy etc. It refers to the chance of loss on account of unfavourable or unpredictable happenings. These are of two types -
a. Speculative - It involve both the possibility of gain as well as the possibility of loss.
b. Pure - It involve only the possibility of loss. Their occurrence may result in loss
whereas non-occurrence may explain absence of loss, instead of gain.
Nature of Business Risks:
i. Business risks arise due to uncertainties: Uncertainties mean when you are not sure of what is going to happen in future. Common examples of uncertainties are: change in demand, government policy, technology etc. Business risk is due to these uncertainties.
ii. Risk is an essential part of every business: A risk is an important characteristic of the business. No business can avoid risk although the degree of risk may vary Risk can be reduced but cannot be eliminated.
iii. Degree of risk depends mainly upon the nature and size of business: For small scale business it is less and for large scale business it is more.
iv. Profit is the reward for risk-taking: The business earns a profit because they are bearing risk. "No risk no gain" larger the risk more is the profit. An entrepreneur bears the risk with the expectations of earning a profit.

a. The type of retail trade being described in the above lines is a Mail Order House.
b. The five conditions under which mail-house trading may be considered suitable are as follows:
i. The products can be standardized and graded.
ii. The products can be easily transported at low cost.
iii. The products have ready demand in the market.
iv. The products are available throughout the year and in large quantity.
v. The products can be described through pictures.

Internal trade can be classified into two broad categories viz., (i) wholesale trade and (ii) retail trade.
i. Wholesale trade: wholesale trade refers to buying and selling of goods and services in large quantities for the purpose of resale or intermediate use.
ii. Retail trade: A retailer is a business enterprise that is engaged in the sale of goods and services directly to the ultimate consumers. The retailer normally buys goods in large quantities from the wholesalers and sells them in small quantities to the ultimate consumers.