MBA 1st Year Introduction Micro Macro Business Environment Long Question Answer :- In this Post you will find MBA 1 year related to important questions related to the answer such as the Introduction Micro Business Environment Answer and many other important questions. long Questions are answerer in section C
LONG ANSWER QUESTIONS
Q.1. What are the essential characteristics of business?
Ans. Characteristics of Business: The essential characteristics of business are as follows:
1. Entrepreneur: There must be someone to take initiative for establishing a business. The person who recognizes the need for a product or service is known as entrepreneur. The entrepreneur is a key figure in the process of economic growth.
2. Economic Activities: These also play an important role in carrying out business activities.
3. Deals in Goods and Services: Business always deals in goods and services. The goods include hath customers goods like clothes, Shoes, toothpaste and industrial goods like raw material, tools and machinery.
4. Risk: The business involves a greater element of risk and uncertainty. In fact, a businessman tries to foresee the future uncertainties and plan his business act future uncertainties and plan his business activities accordingly.
5. Profit: Profit is the most important character of business. Business is started for purpose of profit Profit is driving force of every business activity. The incentive of earning profits keeps business and is also necessary for the continuity of business. This does not mean that there earning profit. Profit is driving force of e person in business and is also will be no chances of losses in business.
6. Production: Business always always deals on production of goods and services The object of business to provide goods and services to society for the purpose of earning profit. The goods must be produced or manufactured so that they can be sold in market.
7. Sales: Sales are related with the transfer of values. The production for personal use does come under the scope of business. For example, if a shoe-maker makes a pair of shoes and wear himself his act is not treated as business. If a person makes a pair of shoes for the purpose of selling, now his act is treated as business.
8. Finance: Finance is another important character of business. No businessman can without finance, finance is the lifeblood of every business organisation.
9. Management: Every enterprise needs an organisation for its successful working. Various business. activities are divided into departments sections and jobs. In this way, organization creates the framework for managerial performance and helps in coordinating various business activities.
10. Regularity: In business, only those transactions are included which have regulartity and continuity and disolated transaction will not be called business, even if the person earns profit from that deal. A person builds house for himself, but later on sells it on profit.
11. Creation of Utility: The goods goods are provided to the consumer as per there likes and requirements Business creates various types of utilities in goods so that consumer may use them.
12. Consumer Satisfaction: The ultimate aim of business is to supply goods to the consumers which are produced for them. If a consumer is satisfied with the product he will purchase the same thing again, otherwise he will go for an alternative commodity.
14. Planning: Planning is the most important character of business Planning is related with all the activities of business. Planning is always based on past experience.
MBA 1st Year Introduction Micro Macro Business Environment Long Question Answer
Q.2. What are the different types of business? Discuss the forms of business organisations.
Ans. A business is an organisation that uses economic resources or inputs to provide goods or services to customers in exchange for money or other goods and services.
Business organisations come in different types and forms: Types of Business
There are four major types of businesses:
1. Service Business: A service type of business provides intangible products (products with no physical form). Service type firms offer professional skills, expertise, advice and other similar products.
Examples of service businesses are: schools, repair shops, hair salons, banks, accounting firms and law firms.
2. Merchandising Business: This type of business buys products at wholesale price and sells the same at retail price. They are known as ‘Buy and sell businesses. They make profit by selling the products at prices higher than their purchase costs.
A merchandising business sells a product without changing its form. Examples are grocery stores, convenience stores, distributors and other resellers.
3. Manufacturing Business: Unlike a merchandising business, a manufacturing business buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased.
A manufacturing business combines raw materials, labour and factory overhead in its production process. The manufactured goods will then be sold to customers.
4. Hybrid Business: Hybrid businesses are companies that may be classified in more than one type of business. A restaurant, for example, combines ingredients in making a fine meal (manufacturing), Sells a cold bottle of wine (merchandising), and fills customer orders (service).
Nevertheless, these companies may be classified according to their major business interest. In that Case, restaurants are more of the service type, i.e. they provide dining services.
Forms of Business Organisation
These are the basic forms of business ownership:
1. Sole Proprietorship: A sole proprietorship is a business owned by only one person. It is easy to set-up and is the least costly among all forms of ownership.
the owner faces unlimited liability, meaning, the creditors of the business may go after the personal assets of the owner if the business cannot pay them.
The sole proprietorship form is usually adopted by small business entities.
2. partnership: A partnership is a business owned by two or more persons who contribute resources into the entity. The partners divide the profits of the business among themselves.
in general partnerships, all partners have unlimited liability. In limited partnerships, creditors cannot go after the personal assets of the limited partners.
3. Corporation: A corporation is a business organisation that has a separate legal personality from its owners. Ownership in a stock corporation is represented by shares of stock.
The owners (stockholders enjoy limited liability but have limited involvement in the company’s operations. The board of directors, an elected group from the stockholders, controls the activities of the corporation.
In addition to those basic forms of business ownership, there are some other types of organisations that are common today. These are:
1. Limited Liability Company: Limited Liability Companies (LLCs) in the USA, are hybrid forms of business that have characteristics of both a corporation and a partnership. An LLC is not incorporated, hence, it is not considered a corporation.
Nevertheless, the owners enjoy limited liability like in a corporation. An LLC may elect to be taxed as a sole proprietorship, a partnership, or a corporation.
2. Cooperative: A cooperative is a business organisation owned by a group of individuals and is operated for their mutual benefit. The persons making up the group are called members. Cooperatives may be incorporated or unincorporated.
Some examples of cooperatives are water and electricity (utility) cooperatives, cooperative banking, credit unions and housing cooperatives.