Introduction to Business & Communication

Course Code: ACCT 6104

Lecture
03
Chapter-01

Introduction

7-1
Components of Human Occupation and Business

HUMAN OCCUPATION
Profession
Profession is an occupation involving the provision of personal services
of a specialized and expert nature.

Employment / Service
Service or employment involves working under a contract of
employment for or under someone known as employer in return for
wages or salary. 

Business
Business includes those human, economic, legal, recurring, risk bearing
activities relating to production and distribution of goods, services and
ideas with a view to earn profit.
 Contd…
There are several components of business. Some important
components are mentioned below- 
Industry
 Industry is concerned with the production of goods with the steady
application of human labor.
 It is the important stage of business which refers production of things in
factories.

Commerce
 Commerce is the process of buying & selling and all those activities
which facilitate trade, such as storing, grading, packaging, financing,
insuring, transportation etc.
 It removes the hindrances of person, place, time, exchange and
knowledge.
 Contd…
 Commerce has mainly two branches i.e. trade and aids to trade.

Commerce remove some hindrances such as -

1) Hindrances of Person: Commerce helps to remove the distance between
buyer and seller i.e. hindrance or difficulty between persons by means of
trade.
2) Hindrances of Place: The goods may be produced at one place and the
demand for these products may be the greatest at different places. This barrier
of distance is removed by commerce through the different means of
transportation, by which goods are carried from one place to another. It
creates place utility.
3) Hindrances of Time: Through storing and preservation, the warehouse
removes the hindrances of time by balancing the time gap between
production and consumption.  
 Contd…
4) Hindrances of Exchange: Banks as part of commerce, act to remove the
hindrances of exchange and enable buyers to procure goods, especially by
extending their own credit. 
5) Hindrances of Information: Marketing promotional tools (advertising, personal
selling, salesmanship, sales promotion & direct marketing) help to remove the
hindrances of the lack of information by bringing the notice of the people.
Direct Services
 Professionals like doctors, auditors, teachers, lawyers, nurses,
engineers, accountants, designers and other professionals earn money
through selling the services independently and individually.
 These activities are not business but called as profession.

 If these works are done by more than one person, through forming a
firm or institution to earn profit than it may be called as business.
 Business and its Ramification / Types
1] Industry
 Production of goods for sale by the application of human labor or
mechanical power is called industry.
 Industry may produce capital goods or consumer goods. It may be
concerned with steel, chemical, car, jute etc.
 Industry also involved in commercial activities which provide services
such as Tourist / Hotel / Entertainment / Cinema / Media

a) Primary Industry
These industries do not convert the raw materials to other
commodities.
i) Extractive Industry
These industries are engaged in supplying materials/natural
wealth/ commodities which are extracted or raised from the land,
sea and air or the surface of the earth.
 Business and its Ramification / Types
ii) Genetic Industry
The word ‘genetic’ means parentage or hereditary. It is concerned
with mainly producing- breeding, reproduction and
multiplication of different species and plants or animals.

b) Secondary Industry
i) Manufacturing Industry:
These industries are concerned with the converting of the form of
raw materials and semi-manufactured goods into finished products.
Manufacturing industries are subdivided into-
 Business and its Ramification / Types
> Analytical Industry:
In analytical industry, the basic raw materials are broken down /
analyzed / separated into several parts/useful materials.

> Synthetic Industry:

These industries brought various ingredients and put together &
combined in the manufacturing process to produce a new product.

 Processing Industry:
The industry which is operated for the processing of raw materials
through different stages of production for finished products.

 Assembling Industry:
In an assembly industry, the finished product can be produced only
after various components have been made and then brought together
for final operations.
 Business and its Ramification / Types
ii) Service Industry:
Business provides not only goods but also services. When a person goes
to a cinema hall or takes out an insurance policy on his life, he receives
nothing material in return of his money but a piece of paper. These
industries may be called as public utility industries.
 
iii) Construction Industry:
These are engaged in various construction activities. These categories of
industries are using the products of manufacturing industry. e.g.
construction of bridge, building, road, tunnel, over-bridge, fly-over,

apartment etc.
 Business and its Ramification / Types
2] Trade:
Trade is the stage of business by which trading company buys products
and sales it in own country or abroad without being involved in
manufacturing.
  a) Domestic – It is also known as internal trade or home trade.
It include wholesale, retail, agency, distributor etc.
b) Foreign – It is also known as international trade.
* Export
* Import
* Entry-port trade or Re-export.
 Business and its Ramification / Types

  3] Aids to trade:
Some aids which are related to trade, industry and
commerce such as- Transportation, Warehousing/Storage,
Insurance, Banking, Advertising, Communication, Marketing
research etc. are included in the scope of business.
 Relationship of Industry with Commerce
The functions of industry and commerce are different but they are
related in the various side. The overall objectives of these both sectors
are same which are mentioned below-

1) Earning profit
‘Industry’ and ‘Commerce’, both are the branches of business. To earn
profit, industries are involved to produce the products and commerce is
involved to distribute the goods and services.

2) Achieving objectives
By the contribution of both commerce and industries, business objectives
are achieved. Both of these two sectors are involved to fulfill the
demand of the customers. 
 Relationship of Industry with Commerce
Contd…..

3) Creating utility
Industry creates utility by transforming natural resources into the
desired products and commerce creates utility by reducing the
hindrances of trade. It creates ownership, time, place, risk, money,
exchange, possession and knowledge utility. So, these are closely
related in creation of utility.

4) Increasing national income

Industries and commerce both are contributing to increase the
national income. In both sectors, people are employed. Various
programs are taken by these sectors to utilize the natural
resources properly.
 Relationship of Industry with Commerce
Contd…..

5)Depends on each other

 Industry and commerce work as the continuous process and depends
on each other.
 Commerce helps industries by supplying raw materials and industries
help commerce by producing the required products. Industries starts
their work after collecting raw material from suppliers i.e. from
commerce, on the other hand, commercial activities are started after
producing the products in industries.
From the above discussion, we can say that, industries and
commerce are closely related.
 Industrial Structure of Bangladesh
> Large-scale Industries
  * Large amount of capital
* Using large volume of raw-materials
* Engage a lot of employees
* Producing large scale production
* High contribution to national income
* Using high technology and production strategy
* Large area occupation
* Large market coverage
* Follows some rules, regulations, policies etc.
 Industrial Structure of Bangladesh: Contd..
> Medium-scale Industries
  * Need comparatively less amount of capital
* Using less capital but large number of employees
* Using some modern technology but organization / mgt.
system is weak

* Employee more than 20 and less than 230

* Examples:
Soap, Plastic, Nilon, Leather, Cigar ate, Matches, Cosmetics, Glass
etc.
Industrial Structure of Bangladesh: Contd..
> Small and Cottage Industries
  * Needed small capital
* Using available raw materials

* Small size machineries

* Family based employees and operation

* Investment mainly comes from family, relatives and friends

* Local based

* Employees less than 20 and investment maximum 10 lacs

* Small and target oriented market coverage

* Example:

Furniture, Electric & Electronics, Textile, Garments, Biri, Poultry,

Hatchery, Accessories etc.
Factors to be considered for choosing place
/ location for business
1) Nature of the business
2) Size of the business

3) Communication and Transportation

4) Land

5) Density of population
6) Availability of raw materials
7) Warehousing facility
 Contd..
8) Supply of fuel and energy

9) Homogeneous business

10) Existence of linkage industries

11) Weather and climate

12) Social, cultural and political environment

13) Market structure

 Trade and Aids to Trade

Trade
Trade means buying and selling

Aid to trade
Institutions that are meant and build
to assist and support the trading
process.
 Trade Vs. Commerce
General perception is that, trade and commerce are the

same terms and can be used interchangeably. But the fact is,

both the terms are different from each other and carry

different meanings.
Trade simply means buying and selling of goods and

services in return for money or money’s worth whereas

commerce not only refers to the exchange of goods and

services but also includes all those activities (like banking,

insurance, advertising, transportation, warehousing etc.) for

the completion of that exchange.

 Trade Vs. Commerce
BASIS FOR
COMPARISO TRADE COMMERCE
N

Commerce means exchange of

Trade means the
goods and services between the
exchange of goods and
parties along with the activities
services between two
Meaning such as insurance, banking,
or more parties in
transportation, warehousing,
consideration of money
advertising etc. that completes
or money’s worth.
that exchange.
Scope Narrow Wide
Type of
Activity Social Activity Economic Activity
 Trade Vs. Commerce
BASIS FOR TRADE COMMERCE
COMPARISON
Frequency of
Isolated Regular
Transactions
Employment a lot of people are engaged
very small size
opportunities here
Between buyer Between producer and
Link
and seller consumer
Demand and Represents only the demand
Represents both
supply side side
 Comparison among Industry, Commerce and Trade
BASIS FOR
COMPARISON INDUSTRY COMMERCE TRADE
It refers to It refers to the buying
extraction, It refers to and selling of
Meaning production, distribution of products produced by
processing and products produced by industries and
construction of industry distributed by
products commerce

 It consists all the

activities related to It comprises trade It consists buying and
Scope the production of and auxiliaries of selling activities
products trade

It requires large It requires less capital It requires

Capital capital than than industry and comparatively less
commerce and larger than trade capital than industry
trade. and commerce

It involves greater It involves It involves

Risk degree of risk in comparatively less comparatively less
comparison to risk than industry and risk than industry and
commerce and trade greater than trade commerce
 Types of Trade
Wholesale Trade is a form of trade in which goods are

purchased and stored in large quantities and sold, in

batches of a designated quantity, to resellers,
professional users or groups, but not to final consumers.

Retailing involves selling products and services to

consumers for their personal or family use.
Retail involves the process of selling consumer goods or

services to customers through multiple channels of

distribution to earn a profit. Demand is identified and then
satisfied through a supply chain.
 Types of Trade
>A hawker is an individual who sells wares by carrying them through  the
streets. He is a vendor of merchandise that can be easily transported;
the term is roughly synonymous with peddler.
> In most places where the term is used, a hawker sells inexpensive
items, handicrafts, vegetables or food items.

 Whether stationary or mobile, hawkers often advertise by loud street

cries or….. This commerce poses an illegal competition with the

regular retail shops.
A peddler is defined as a retail dealer who brings goods
from place to place, exhibiting them for sale. 

 An individual is ordinarily considered to be a peddler in the legal sense

if he or she does not have a fixed place of conducting business but

regularly carries the goods for sale with himself or herself. 
 Types of Trade
 A department store is typically a large retail establishment
that offers a wide variety of merchandise organized into
separate departments.
 Merchandise featured in department stores is generally
clothing for men, women and children; jewelry and
accessories like handbags, belts and scarves; shoes;
cosmetics etc..
 Some department stores carry small appliances for the home,
electronics, sports equipment, toys and furniture. All departments
are housed under the same roof to facilitate buying, customer
service, merchandising, and control.
 Types of Trade
 A chain store is one of a group of stores engaged in the
same kind of business in different locations and under the
same ownership and management. Chain stores in malls or
shopping centers are always looking to improve their
position and strengthen their brand identity in the
marketplace.

 Group of retail outlets owned by one firm and spread

nationwide or worldwide, such as Body Shop, K-Mart, Wal-
Mart. 
 Difference Between a Department Store & a
Chain Store
 Department stores and chain stores are two different
concepts. Department stores have a long history of offering
a wide variety of goods for retail sale, while chain stores
are retail outlets in various locations under the same brand
and management.

 While many department stores are chain stores, the

opposite is not true. There are many chains such as
restaurants and specialty stores that are not considered
department stores. 
 Types of Trade

 Supermarkets are large grocery stores that sell a large

variety of fresh and packaged food and other consumer or
household products. Supermarkets are divided into
sections, such as dairy, produce (fruits and vegetables),
meat, packaged goods, cleaning supplies, and personal
hygiene items.
 End of Today’s Discussion

Thanks to All