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unit-1-nature-and-scope-of-business

Unit-1 Nature And Scope Of Business

In this introductory unit, you will learn the exact connotation of terms like business, commerce, trade, industry etc.

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What is the difference between commerce and industry?

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Learning Pundits Content Team

Written on Apr 15, 2019 3:37:43 PM

  • You have learnt that the business activities are classified into: Industry and Commerce. Industrial activities are concerned with the production of want satisfying goods and services. Unless these goods and services are made available to those . who need them, they may not fulfil their objectives i.e. satisfying human wants.
  • Therefore, the goods produced by the industries should be made available to the consumers at right place, right time, right quantity, right price and in right manner. Here comes the activity of commerce to fulfil all these requirements. All the activities which establish link between the producers of goods and consumers of these goods, and maintain a smooth and uninterrupted flow of goods between them come under commerce.
  • A smooth and uninterrupted flow of goods and services from producer to consumer is beset with many barriers and hindrances. For instance, goods produced by one may be consumed by another. In such a case, unless the producer and consumer identify each other, there is no scope for exchange of goods between them. This is the hindrance of person.
  • Similarly, for buying a product, consumers should have the knowledge about the existence of that product, its features, etc. Therefore, there is a need to provide such information to the consumers. This is the hindrance of knowledge.
  • The hindrance of time arises out of the time gap between the time of production and the time of consumption.
  • In many cases goods are produced at one place while they are consumed at another place. So, the goods should be carried from the place of production to the place of consumption. This gives rise for the hindrance of place.
  • Commerce eliminates all these hindrances and facilitates the exchange of goods between producers and consumers.
  • ΓΌIn a nutshell, commerce is mainly concerned with the purchase and sale of goods, and also embraces all those functions which are essential for maintaining smooth and uninterrupted flow of goods and services between the buyers and sellers. Thus, there are two main aspects in commerce: i) purchase and sale of goods, and ii) activities essential for the smooth and uninterrupted flow of goods.