Business, Trade and Commerce
Human activities can be classified into economic activities and non economic activities. Economic activities are those by which we can earn our livelihood and non economic activities are those performed out of love, sympathy, sentiments, patriotism etc. Economic activities are further divided into business, profession and employment. These economic activities can be differentiated on the basis of code of conduct, transfer of interest, risk of return, reward or return, mode of establishment, capital investment etc. A business activity may consist of production or purchase or exchange of goods, or supply of services, for satisfying needs of other people in the society. Functions of business enterprises include financing, human resource management, production and marketing. Business activity creates utility in goods and services, aims to make money and satisfy consumers, produces or procures goods and services and involves risk in transaction. Business activity can be classified into industry and commerce. Industry refers to the economic activities linked with conversion of resources into useful goods. Industries can be categorised into primary, secondary and tertiary industries. Primary industries involves activities related to extraction and production of natural resources; and reproduction and development of living organisms. Primary industries are further categorised into extractive industries and genetic industries. Secondary industry use materials that are already extracted by the primary industry. These industries may be classified into manufacturing and construction industries. Tertiary industry provide support services to primary and secondary industries and trade related activities.
Commerce provides the necessary link between the producers and consumers. There are two types of commercial activities trade and auxiliaries to trade. Trade can be further classified into internal trade and external trade. Internal trade can be further wholesale trade into wholesale trade and retail trade. External trade can be further categorized into import, export and entrepot trade. Auxiliaries of trade refers to services meant for facilitating activities relating to industry and trade. Auxiliaries of trade activities include banking and finance, warehousing, advertisement, communication, insurance and transportation. Objectives of business consist of economic and social objectives. Economic objectives include profit earning, survival, growth, innovation and optimum utilization of resources. Social objectives include availability of goods, supply of quality goods, avoidance of unfair practices, welfare of employees, promotion of social welfare, cooperation with government, and pollution control. Business risk can be categorised into speculative risk and pure risk. Causes of business risk are natural, human, economic and other causes.