EVOLUTION OF BUSINESS

EVOLUTION OF BUSINESS

 

Business is often explained as ‘busy-ness’ which means being busy. It is associated with production and distribution of goods and services. Thus, business can be described as the state of being busy with production and distribution of goods and services. It makes clear that, business started when people began to exchange goods or services.

Ancient man lived like a monkey and he wandered here and there alone. At that time, his needs were limited and so was satisfied with whatever he had. Later, he began to live as social beings, and groups were formed. They began to share what they obtained and the exchange process might have begun developed in that way. They exchanged goods for goods. It was called the barter system. Barter system was confined to small area only, because movement of goods were very difficult as there were no transportation and communication facilities.

Introduction of Money

Barter system had a serious limitation. In order to make a transaction it required double coincidence of wants. It was necessary to find a suitable person to exchange things, as the goods offered by one must be demanded by another. Moreover, there was no measure of value to determine the real value of goods. Just think about the situation where a cow is exchanged for a jackfruit!! everything has same value.

When these problems repeated, they thought about a common medium of exchange which can also measure value. Its paved the way for the introduction of money.

After the introduction of money business grew fast. Gradually, small villages were grown to be towns and some of them turned into business centres and market places. During 16th and 17th centuries a number of geographical discoveries were taken place and because of these some new trade places and routes were identified. The industrial revolution at this period speeded up growth of business. It brought some changes in industrial production and distribution.

Impact of Industrialisation

This brings in two changes. Firstly, it brought some changes in the method of production. Instead of handwork, machines working with power were began to use. Secondly, goods were started to produce in factories, in place of production at home with limited facilities. Followed by these changes, transportation facilities were widely used to move goods from one place to another. The business expanded its operations from village level to national level and from there to international level. During 1990s globalisation initiated fast growth of international trade in India.

Now, business is growing at higher growth rate. Developments in communication, transportation and banking sectors help to grow business.

With the growth of business, a parallel growth was also taken place in the form of business organisations. Business firms are growing from sole proprietorship to partnership, from partnership to joint stock companies, from joint stock companies to multinational companies and finally from multinational companies to transnational corporations.