Industry and Commerce

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Business represents organized efforts by an individual or group of individuals engaged in making a living. It includes all profit seeking activities and enterprises that provide good and services required to an economic system.

Definition:

The term ‘business’ defined by different authors in their own way.

According to Urwick and Hunt, “Business is any enterprise which makes, distributes, or provides any article or service, which other members of the community need and are able and willing to pay for.

Classification of Business Activities

  • The basic cause of all productive activities is the unlimited wants of human being and need to satisfy them.

  • Basic requirements of human beings are three viz., food, clothing, and shelter.

    For example tooth paste and soap, bread, furniture, dress, T V etc.

  • The manufacturer may produces goods for consumer.

  • Generally the manufacturer may take the help of middleman like the wholesalers and retailers to distribute to the consumer.

  • Business activities classified into two categories:

    (i) Industry

    (ii) Commerce

Classification of Business activities

Classification of Business Activities

Classification of Business activities

Industry

  • The production side of business activity if referred as industry.

  • It is a business activity related to raising, processing or manufacturing of products.

  • Products are consumer goods as well as producer’s goods.

    • Consumer goods: Used finally by consumers.

      E.g food grains, textiles, etc.

    • Producer’s goods: Used by manufacturers for producing some other goods.

E.g Machinery, tools, etc. Expansion of trade and commerce depends on industrial growth.

Products are consumer goods as well as producers goods

Consumer Goods as Well as Producers Goods

Products are consumer goods as well as producers goods

The term industry refers to that part of the business activity which is concerned with:

Activity which is concerned with industry

Activity Which is Concerned with Industry

Activity which is concerned with industry

  1. Extracting materials like coal, iron ore, petroleum (called extractive industry)

  2. Processing and converting raw materials into finished product like soap, bread, fans (called manufacturing industry)

  3. Construction activity like building, dams, and bridges (called construction industry).