SCOPE OR COMPONENTS OF BUSINESS

Business includes many activities. Traditionally business activities are classified broadly into two parts: (1). Industry, and (2). Commerce. This is clearly shown in F.C. Hopper's definition: "It (business) means the whole complex field of commerce and industry ........". Thus, the scope of business consists two main components: (1) Industry, and (2) Commerce.

Meaning and Type of Industry

" Industry " refers to production of goods by manufacturing or processing. It converts raw materials into finished goods and thus creates form utility. Goods produced by an industry may be "consumers' goods" or "producers' goods". Consumer goods are in the form in which consumer wants them e.g. cloth, radio, television, foodstuffs, etc. Industry directly satisfy human needs and human wants. Producers' goods are used by other producers for further production e.g. machinery, factory, building, plants, tools, etc. Industry may be further divided into four different types.
1. Genetic Industry
2. Extractive Industry
3. Construction Industry
4. Manufacturing Industry

1. Genetic Industry : Genetic Industry is related to the reproducing, breeding and multiplying certain species of plants and plants and animals with the object of earning profit from their sale. The activities involved are rearing, breeding of animals, birds, and growing plants. Nurseries, where plants are grown for sale. cattle breeding farms, poultry, etc. come under genetic industry.

2. Extractive Industry : The Extractive Industry concerned with the extraction or drawing out products from natural sources. It supplies basic raw materials to other industries. Examples of such industries are farming, mining, hunting, lumbering, fishing, etc. Materials once extracted from earth cannot be replaced. Hence, these industries are also called exhaustive industries because with extraction there is depletion of resource and exhausts.

3. Construction Industry : This industry is concerned with the construction, erection, fabrication or building products. Examples of such industries are road, bridge, dams, canals, buildings, construction, etc. In this type of industry basic materials are manufactured by other industry like cements, iron, etc. The distinctive characteristic is that their products are not carried to the market for sale, they are erected or built at a fixed site. The products of construction industries are immovable.

4. Manufacturing Industry : Generally the term 'industry' refers to the manufacturing industry. This industry is mainly concerned with the production of different types of goods by using raw materials or semi-finished goods. It creates form utility in them. Manufacturing industries produces most of the goods that are used by the consumers. Textile, cement, soap, television, petrol, etc. are examples of manufacturing industries. It may be classified as follows:

(a). Analytical Industry : In this industry many types of products are manufactured by analyzing and separating different elements from the same material. For example crude oil is processed and separated into petrol, diesel, kerosene, lubricating oil, etc.

(b). Processing Industry : In this industry raw material is processed through different stages of production resulting in the final product. Textile, paper and sugar are examples of this type.

©. Synthetic Industry : In this industry various raw materials are put together in manufacturing process to make a final product. For example combining and mixing concrete, gypsum, coal., etc produces cement.
(d). Assembling Industry : In this industry various instruments or component parts already manufactured are assembled to make new useful product. For example, car, bicycle, radio, television, etc.