Nature and Scope of Business

Economic Objective

Step 1: Business has five types of objectives - Economic, Social, Human, National, and Global. Step 2: Economic Objectives are those directly related to profit-earning and financial performance of the business. These include earning adequate profit, exploring new markets, creating more customers, growth and expansion, and making innovations. Step 3: Social Objectives relate to the welfare of society (quality goods at fair prices). Human Objectives relate to employee welfare (fair pay, good working conditions). National Objectives relate to national goals (employment, paying taxes). Step 4: Sin

Avoidance of unfair practices like hoarding and black-marketing

Step 1: Let us identify to which category each option belongs. Step 2: 'Providing training and development programmes to employees' - this benefits employees, so it is a Human Objective. Step 3: 'Payment of taxes honestly to the government' - this relates to national responsibilities, so it is a National Objective. Step 4: 'Earning adequate profits for business survival' - this is directly related to financial performance, so it is an Economic Objective. Step 5: 'Avoidance of unfair practices like hoarding and black-marketing' - this protects the interest of society and consumers, making it a

The chance of loss due to uncertain events in the future

Step 1: Business involves uncertainty - no one can perfectly predict the future. Step 2: Business Risk is defined as the chance (or possibility) of loss due to uncertain events in the future. These uncertain events could be natural calamities, market changes, human errors, political changes, or technical failures. Step 3: Option A is wrong - business has no certainty of profit; in fact, the possibility of loss is what defines risk. Option C is wrong - getting a fixed salary describes employment, not business risk. Option D is wrong - investing money is a characteristic of business, not the def

Human Cause

Step 1: Recall the five causes of business risk - Natural, Economic, Political, Human, and Physical/Technical causes. Step 2: Natural Causes involve events like floods, earthquakes, cyclones - beyond human control. Step 3: Economic Causes involve changes in market conditions like price fluctuations or new competitors. Step 4: Political Causes involve changes in government policies, tax laws, or trade restrictions. Step 5: Human Causes involve losses arising from human actions or behaviour - such as inefficient management, carelessness, accidents, forgery, theft, strikes, lockouts, and misappro