Any activity which fulfills human needs and wants can simply be called a business. Businesses are created through human needs and wants. At times human wants are created by businessmen. While different needs arise in human beings, it is natural for them to be motivated to fulfill them.
Needs
Human needs mean the driving force in man to to satisfy the basic desires. In the past,
- Food
- clothing &
- Shelter were considered as basic needs.
Later,
- Education
- Health
- Security were also considered as important needs. You understand very well know that you have to fulfill these needs.
You may consume various foods to fulfill your hunger and thirst which arise from your food needs. Think of the way in which you fulfill your clothing or other basic needs. Don't they take various forms? The various forms used to fulfill needs are known as "wants". Wants are complex and differ from person to person. Wants vary depending on the economic and social status of man.
Products
A variety of things are used to satisfy wants that arise from needs. These are called Products. Products can be classified as Goods, services and ideas. Things with physical appearance are called goods and which don't have a physical nature are services. Knowledge and intelligence can be called ideas. The persons who consume or uses these products known as Goods, services and ideas is called a consumer.
Production means changing the form of resources and adding value to them according to the needs of the consumer The aim of production is to fulfil human needs and wants. Production can basically be divided into three categories.
- Primary production
- Secondary production
- Tertiary production
Primary production
These are the industries that utilize resources in their natural form itself.They can be categorized as:
- Agriculture, forestry, animal production(farm products)
- Fisheries.
- Mining and quarrying
Secondary production
This includes industries that produce finished goods by changing the basic material obtained from primary industries. There are two pairs in these products.
- Manufacturing
- Construction
Tertiary production
This is known as services industries and commerce too. They are mainly divided into two pairs
- Trade.
- Services required for trade.
Although production is commonly classified as above, the central bank of srilanka, has classified production as follows when calculating the Gross National production.
- Agricultural productions
- Industrial productions
- Service productions
Production process
The production process changes the nature of inputs. Think of the way in which your lunch is prepared consider how your chair is made. These products are created by processing different inputs.In other words,they are produced through a production
process
For instance you can see form the diagram 1.4 that flour taken as an input to produce bread,turns into bread after going through a certain process. Likewise, you should also be
able to understand from the diagram page.
There are two types of production direct production, indirect production. When a person produces what he needs by himself, it is called direct production. It is called as self production
Eg: Growing vegetables needed by the family in the home garden itself.
When a person produces goods, services and ideas with the intention of selling them in the market it is called as indirect production. It is because goods are produced aiming at the market.
Specialization
When a person continuously does some work that he selects according to his ability or skills he gets a special ability or a competency in doing it. It is called as personal specialization.
Eg: A carpenter has special ability in making furniture. The special competancy he gets by involving in it for a long time that is to produce quality and artistic furniture, is specialization.
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