INTRODUCTION TO COMMERCIAL ORGANISATIONS

INTRODUCTION TO COMMERCIAL ORGANISATIONS – We as human perform different activities in our day to day life. We perform such activities to satisfy our daily needs and requirements. We as human perform different activities in our day to day life. We perform such activities to satisfy our daily needs and requirements. This can be done for monetary purpose and for non monetary purpose also. So we can classify our activities into two broad categories

• Economic activities
• Non-economic activities.

Economic activities includes all those activities which we undertake to earn money. For example: sale of goods by shopkeeper. Non-economic activities include all those activities which are undertaken not for the purpose of earning money but for self satisfaction. For example: mother cooking food for her child.

Meaning of Business

Business includes all those activities involved in production of goods and sales of goods, done with an aim to earn profits. Business involves sale or transfer of goods and services for some consideration. It has a motive i.e., to earn profits. It always involves some risk, larger the business higher is the risk.

Meaning of Industry

Industry in broad term means a group of firm producing similar or related goods. All the business enterprises which are responsible for undertaking industrial activities are called industrial enterprises. Those people who own industries and control them are called industrialists. It mainly includes all such business activities which are involved in extracting, constructing, processing, multiplying, assembling useful products. Industries requires use of 4’M mainly- Men, Machines, Materials and Money for producing goods.

Industries are of two types:

• Primary industries
• Secondary industries

Primary industries are concerned with extraction and multiplication of natural resources. For example mining of coal. They are of two types, extractive industries, which are concerned with extraction of natural resources like minerals from mines, and genetic industries, which are concerned with reproducing plant and animals for the purpose of earning profit by its sale.

Secondary industries are concerned with transforming materials acquired by primary industries. For example- production of sugarcane in farms is work of primary industry and producing sugar from sugarcane is work of secondary industry.

Meaning of Commerce

Commerce includes all those activities which facilitate sale or transfer of goods and services. It is a wider term. It includes buying and selling of goods and services and all those activities which facilitate buying and selling.

The main aim of Commerce is to ensure the supply of goods at the right time, at the right place and in the proper quantity. It includes all process involved in removal of hindrances of person, places and time in sale of goods.

Meaning of Trade

It includes activities concerned with sale, transfer or exchange of goods and services for a certain price. It creates a link between producers and consumers. It is an important part of Commerce. Good maybe exchanged for cash or may be exchanged on credit. The persons who are involved in trade are called ‘traders’ or ‘merchants’.

Trade is of the following types:

• Internal Trade
• External Trade

Internal trade means buying and selling of goods within the boundaries of one’s own country. Both the seller and buyer belong to the same country.

It includes wholesale trade and retail trade. Wholesale trade means buying of goods in bulk and selling it to retailers. Retail trade means buying of goods from wholesalers and selling them in small quantities to customers.

External trade means buying and selling of goods and services between different countries. In this the seller and the buyer belong to different countries. It includes Import trade, which means purchasing goods and services from other countries. Export trade means selling goods and services to other countries and Entrepot trade means importing goods from one country with the purpose of exporting them to some other country. It is also called Re-export trade.

INTRODUCTION TO COMMERCIAL ORGANISATIONS