6. Stabilizer of Organization

Stabilizer of Organization:

The insurance companies help in creating good will between the employers and the employees by providing group insurance to all the permanent employees of the company. They also introduce retirement income plans which ensures a regular income to the employees after their retirement. The monetary benefits given by the insurance companies to the employees of an organization greatly help in stabilization the organization.

6. Stabilizer of Organization

Stabilizer of Organization: 
The insurance companies help in creating good will between the employers and the employees by providing group insurance to all the permanent employees of the company. They also introduce retirement income plans which ensures a regular income to the employees after their retirement. The monetary benefits given by the insurance companies to the employees of an organization greatly help in stabilization the organization.

7. Covers Unforeseen Accidents

Covers Unforeseen Accidents: 

The insurance companies give proper coverage to the injury causing disability to the employee or the death of an employee on work oa a small periodic premium by the owner of the factory. The firm has not to bear the expenses of unforeseen accidents. The income of the firm, thus, remains stabilized through the insurance.

8. Spread of Risk

Spread of Risk:  

A large number of persons get marine, fire, life insurance policies and pay premiums to the insurance companies. whenever a loss occurs, it is compensated out of the funds of the insurers. The loss is spread among a larg number of policy holders. The insurance companies collect larg funds by way of premim. These funds are invested in government securities. The government thus gets sufficient loans easily for development purposes.

CONCEPT OF BUSINESS

In its literary sense, the term business means the state of being busy. Technically, the term Business is defined as all the commercial and industrial activities that provide goods and services to the people and are undertaken for profit. For example, a manufacturer who converts raw material into simi finished or finished goods (cotton to yarn to cloth).

A person who is engaged is fishing, poultry , mining with the sle objective to earn profit are carrying on the business activities. Similarly, all commercial occupations which deal with the buying and selling of goods on retail or wholesale basis, the financing of trad by banks, the transportation of goods from places where there are in less dmand to the places where they are more demanded for earning of profit are doing business. Thus business combines human, material, technological and financial resources carried on for profit.

ACTIVITIES EXCLUDED FROM BUSINESS

1) Social Service Activities:

There are certain human activities which do not seek profit. They are organized and operated with the sole object of rendering social dserviceto the society. For example, setting of free hospitals, free educational institutions, provision of freelgal services etc. Are provided by certain organizations purely for social benefits to the society. These and such other non-profit activities which are undertaken for the purpose other than of earning money or profit are excluded from the study of business.

2) Personal Consumption Activities

Personal Consumption Activities:

Similarly, all the activities which are concerned with the production or purchase of goods and services for personal consumption fall outside the scope of business. For instance, shoemaker making a pair of shoes for personal consumption or a tailor sewing shirts for his own use or a nurse nursing her own child are notbusiness activities because these do not involve in sale or transfer for value. However, if a shoemaker manufactures shoes for regular sale in  the market with a view to earn profit, it will be purely a business activity.