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Business Studies Full Answers

The document provides an overview of key concepts in business studies, including definitions and characteristics of business and industry, the merits and limitations of sole proprietorships, and the importance of choosing an appropriate form of organization. It also discusses the benefits of joint ventures, features of global enterprises, principles of insurance, and the broader scope of international business beyond just trade. Overall, it serves as a comprehensive guide to fundamental business concepts and structures.

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7 views4 pages

Business Studies Full Answers

The document provides an overview of key concepts in business studies, including definitions and characteristics of business and industry, the merits and limitations of sole proprietorships, and the importance of choosing an appropriate form of organization. It also discusses the benefits of joint ventures, features of global enterprises, principles of insurance, and the broader scope of international business beyond just trade. Overall, it serves as a comprehensive guide to fundamental business concepts and structures.

Uploaded by

choudharigita3
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Business Studies Worksheet Answers

1. Define business. Describe its important characteristics.

Business refers to an economic activity where goods and services are produced, distributed, and

exchanged for profit. Characteristics of business include:

1. Economic Activity: Aimed at earning profit.

2. Production and Exchange: Involves manufacturing and selling goods/services.

3. Profit Motive: Essential for business survival and growth.

4. Risk and Uncertainty: Involves financial and market risks.

5. Continuity: Business runs continuously and is not a one-time activity.

6. Customer Satisfaction: Focused on fulfilling customer needs.

7. Innovation: Required to remain competitive in the market.

8. Social Responsibility: Businesses must contribute to society ethically.

2. Define industry. Explain various types of industries.

Industry refers to the production of goods and services using labor and capital. It is classified into:

1. Primary Industry: Involves natural resource extraction (e.g., agriculture, mining, fishing).

2. Secondary Industry: Includes manufacturing and construction industries (e.g., automobile, textile).

3. Tertiary Industry: Provides services rather than goods (e.g., banking, transport, IT services).

3. What do you understand by a sole proprietorship firm? Explain its merits and limitations.

A sole proprietorship is a business owned and managed by a single individual.

Merits:

1. Easy Formation: Requires minimal legal formalities.

2. Full Control: Owner has complete decision-making power.

3. Quick Decision Making: No need for consultation.

4. Retention of Profits: Entire profit goes to the owner.


5. Secrecy: Business information remains confidential.

Limitations:

1. Limited Capital: Funds depend on the owner's savings.

2. Unlimited Liability: Owner bears all losses personally.

3. Lack of Continuity: Business ends with the owner's death.

4. Limited Managerial Ability: One person may lack expertise in all areas.

4. Why is it important to choose an appropriate form of organisation? Explain the factors that

determine the choice of form of organisation.

Choosing the right form of business organisation is crucial as it affects ownership, control, liability,

and operations.

Factors determining the choice of organisation:

1. Nature of Business: Large businesses require a company setup, while small ones may be sole

proprietorships.

2. Capital Requirement: High investment needs may favor partnerships or corporations.

3. Liability: If owners want limited liability, they opt for a company or LLP.

4. Control and Decision Making: Sole proprietors have full control, while companies require a board.

5. Continuity: A company enjoys perpetual succession, whereas sole proprietorship ends with the

owner's death.

6. Legal Formalities: More formalities are involved in companies, while proprietorships have fewer.

5. What are the benefits of entering into joint ventures?

A joint venture (JV) is a partnership between two or more businesses to achieve a common goal.

Benefits of joint ventures:

1. Access to New Markets: Helps companies expand internationally.


2. Shared Resources: Partners share expertise, technology, and financial resources.

3. Risk Sharing: Losses are divided among partners, reducing individual risk.

4. Innovation and Efficiency: Collaboration leads to new ideas and improved productivity.

5. Competitive Advantage: Allows companies to strengthen their market position.

6. Explain some important features of global enterprises.

Global enterprises, also known as multinational corporations (MNCs), operate in multiple countries.

Features:

1. Large Scale Operations: Operate in several countries with high production levels.

2. Advanced Technology: Use cutting-edge technology for efficiency.

3. Centralized Control: Headquarters control international operations.

4. Huge Capital Investment: Require significant financial resources.

5. Global Market Reach: Cater to customers worldwide.

6. Professional Management: Employ skilled professionals for operations.

7. Explain briefly the principle of insurance with a suitable example.

The principle of insurance is based on risk management and financial protection.

Example: A car owner buys an insurance policy. If the car gets damaged in an accident, the

insurance company compensates the repair cost as per policy terms.

Key Principles:

1. Utmost Good Faith: Both parties must disclose all relevant information.

2. Insurable Interest: The insured must have a financial stake in the insured object.

3. Indemnity: Compensation is given to cover actual losses.

4. Subrogation: After compensation, the insurer can claim damages from third parties.

5. Contribution: If multiple insurers exist, they share the liability.


6. Proximate Cause: Claims are settled based on the closest cause of loss.

20. 'International business is more than international trade.' Comment.

International trade refers to the exchange of goods and services between countries, whereas

international business includes various commercial activities beyond trade.

International business includes:

1. Import and Export: Selling and buying goods/services globally.

2. Foreign Direct Investment (FDI): Companies investing in businesses abroad.

3. Licensing and Franchising: Granting rights to use brands or business models.

4. Global Marketing: Strategies designed for international customers.

5. Joint Ventures: Collaboration between businesses from different nations.

Thus, international business encompasses more than just trade, covering investment, technology

transfer, and cross-border operations.

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