1.(a) Sunita is working as a nurse in a near by Hospital. Her son falls ill and she takes care of him at home. Is it an economic activity? Give reasons in support of your answer.(in 60-80 words)
(b) Suresh had gone to Dubai and brought lots of perfume from there. He sold few of it to his friends and gifted some to his relatives. Can we say that Suresh is doing business. Support your answer with reason. (in 60-80 words)
(c) Mukesh's grandfather is an experienced businessman. He tells Mukesh that he must concentrate only on earning profits rather than on any other objectives of business. Is Mukesh's grandfather right? What are the other objective he is talking about? Mention in brief.(in 60-80 words)
2.(a) Mr. michel runs a partnership firm with two of his friends. They manufacture and sale plastic products and earn huge profits. They keep the cost low by paying low wages to the working very poor working condition. Identify the business responsibility being violated by the firm and advise the firm in this regard which is essential for the long term prosperity of the organization.
(b) You are a computer professional and very much aware of the use of Information Technology in business. Advise your friend who is a businessman as to why he should adopt the E-commerce mode of business.
3. Mr. john is running a sole proprietorship business. He is very ambitious and wants to expand his business. He himself performs all the functions. As a student of Business Studies suggest to him any other form of organization which can help in expansion of his enterprise and also explain its advantages over sole proprietorship.
4. Seven friends wish to establish a huge pharmaceutical business and they even want to export the product. They know that it needs an investment of more then 50 lakhs rupees and wish to raise funds from the public. Which form of business organization would you suggest to them and why?
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1. (a) In Sunita's case, taking care of her son at home while not working as a nurse in the hospital is not considered an economic activity. Economic activities involve producing or exchanging goods and services for monetary value. In this situation, Sunita is not engaged in any productive or economic activity.
(b) Selling perfumes to friends and gifting them to relatives does not necessarily make Suresh a businessperson. To be considered a business, there are certain criteria that need to be met. These criteria typically involve regularity, profit motive, and scale of operations. Selling a few perfumes to friends and relatives may be seen as a casual or occasional activity rather than a full-fledged business.
(c) Mukesh's grandfather's perspective of focusing solely on earning profits as the objective of the business is incomplete. While profit-making is an essential objective of any business, there are several other objectives that should also be considered. These objectives can include providing employment opportunities, contributing to the welfare of society, ensuring consumer satisfaction, and maintaining ethical practices. A well-rounded business must consider these multiple objectives for sustainable long-term growth.
2. (a) The partnership firm in the given scenario is violating the responsibility of social responsibility. By paying low wages and providing poor working conditions, the firm is neglecting the welfare of its workers. The firm should prioritize the ethical treatment of its employees and ensure that they are provided with fair wages, suitable working conditions, and other necessary benefits. Fulfilling these responsibilities is crucial for the long-term prosperity and sustainability of the organization.
(b) E-commerce offers numerous advantages for businesses. As a computer professional, I would advise my friend, the businessman, to adopt the E-commerce mode of business for several reasons. Firstly, E-commerce enables a wider reach and access to a larger customer base, allowing for increased sales opportunities. Secondly, it provides cost-effectiveness by reducing the need for physical storefronts, thus reducing operational costs. Additionally, E-commerce allows for convenient and efficient online transactions, which can enhance customer satisfaction and loyalty. Lastly, it facilitates easy integration with various digital marketing strategies for effective promotion and brand building.
3. For Mr. John's ambitious expansion plans, he should consider transforming his sole proprietorship into a partnership or a private limited company. By forming a partnership, Mr. John can share the responsibilities, risks, and resources with a partner, enabling the business to expand more efficiently. Alternatively, converting the sole proprietorship into a private limited company would offer benefits like limited liability, access to more capital through share issuance, and the ability to attract investors. These forms of organization would allow for better division of tasks, expertise, and financial resources, ensuring the growth and expansion of the enterprise.
4. Considering the need for a significant investment and the desire to raise funds from the public, a public limited company would be the most suitable form of business organization for the seven friends. A public limited company allows for the issuance of shares to the general public, enabling them to raise a considerable amount of funds. This form of organization offers limited liability protection to its owners, facilitates the attraction of investors, and provides a legal framework for large-scale operations and international expansion. A public limited company would serve their purpose of establishing a huge pharmaceutical business and enables them to export their products.