Business Organization (Firm and Industry)

WEEK: 1

TOPIC: BUSINESS ORGANISATION

Sub-topic: Firm and Industry

Firm: A firm is a business unit that produces goods or provides services with the aim of earning profit.
Example: Tata Motors, Infosys, a local bakery.

Industry: An industry refers to all firms that produce the same or similar type of goods or services.
Example: Textile industry, IT industry, Automobile industry.

Difference between Firm and Industry

Business Organisation

Definition

A business organisation is an arrangement where people, resources, and activities are systematically coordinated to carry out business activities and achieve objectives like profit and growth.

Types of Business Organisation

1. Private enterprises: Private enterprises are enterprises owned and managed by private individuals. Examples includes

a. Sole Proprietorship

b. Partnership

c. Joint Stock Company

d. Cooperative Society

2. Public Sector Enterprise: This are type of business organization owned, controlled and managed by the government. These organisations are owned by either the local, state or federal government and their major aim is to provide social services to the people

.  Basic Features of Business Enterprises

• Economic activity – Involves production or exchange of goods and services
• Profit motive – Aim to earn profit (except some public enterprises)
• Risk and uncertainty – Future outcomes are uncertain
• Organised activity – Planned and systematic work
• Continuity – Regular and continuous process
• Creation of utility – Adds value to goods/services

Difference between Private and Public Enterprises