Management: Kinds of Business
Business activities may be divided into three kinds:
This classification is based on the nature of principal activity performed by the business enterprise.
- Industries involve the conversion of raw materials into finished products or goods and the application of labor upon raw materials so that greater usefulness becomes possible after the process in the industrial group can be divided into extractive industries: farming, fishing, and mining. The manufacturing industries use materials and supplies turned out by the extractive industries and change these raw materials into various articles of materials for further production of goods and new products. Ex. Hotdog/meat manufacturing company (CDO)
- Commerce involves the process of buying and selling where the goods are moved from the point of production to the point of consumption. Consumption involves purchasing and the actual investment of capital in the merchandise handled with the intention of reselling at a profit. Ex. Shopping mall, etc..
- Service enterprises are primarily concerned with the satisfaction of the needs and wants of the consumers. These are subdivided into two:
- Public and community service – ex. Transportation companies, news paper publishers, etc..
- Professional or trade service – are businesses which capitalize on personal skill and talent for rendering service. Payment for such personalized service is usually in the form of fees which are sometimes called retainer’s fee. Ex. Law offices, certified public accountant, repair shops, management consultants, etc..
Broadly speaking, services may also be subdivided into: (1) Recreation service which include TV stations, movie productions, and the theaters. (2)Personal services which include hotels, restaurants, schools, beauty parlors, etc..