HEALTH:
In modern age the demands of human beings are increasing day by day and to meet these demands one has to do some kind of work to earn money, that means he will have to keep himself busy in performing business activities.
The term “business” literally means to remain busy in some kind of activity. The remain busy does not mean that a person who is busy in playing cards, watching T.V., reading novels, roaming on roads purposelessly is busy person.
Here the busy person is what who remains busy in the economic activities to get financial gain and not that person who remains busy in non-economic activities.
If a person makes economic gains then and only then he will be able to meet his necessities and demands of life. So, for making profits or economic gains in our society every person is busy in doing some kind of work, e.g. a doctor is busy in consulting the patients, a pharmacist is busy in dispensing the medicines, a nurse is busy in administering the medicines to the patients to the patient, a chemist is busy in collecting and distributing the medicines, a technician is busy in performing various kinds of laboratory tests, a worker is busy in the factory, a teacher is busy in teaching the class and so on.
According to Thomas Evelyn “Economics is the study of man’s behavior in earning his living. To earn their livings, men enter into a wide variety of occupations concerned with the production of goods and services that are needed by the community in which they live. There are innumerable occupations and a man has to choose which one he will follow”.
The business activities include all activities from production to distribution of goods and services. Industry, trade and other activities like warehousing, transport, insurance, booking and advertising etc., are all parts of business activities.
Classification of business activities:
The business activities are broadly classified into two groups:
- Industry
- Commerce
INDUSTRY
The word “Industry” refers to that of business activities which relates to growing, extraction, production, conversion, processing or fabrication of goods.
The industries produce different kinds of products for different kinds of products for different purposes which may be classified as follows:
- Primary products
- Semi-manufactured goods
- Manufactured goods
- Capital or producer’s goods
- Consumer’s goods
Primary products
Primary products include all the products or raw materials obtained from agriculture, forests, mines, animal husbandry and fisheries etc. The examples of primary products include wheat, rice, cotton, sugarcane, cereals, wood, metal ores, milk, fish, raw silk etc. The various raw drugs obtained from plants and animals also constitute the primary products.
Semi – Manufactured goods
Semi-manufactured goods are those goods which are produced by one industry but cannot be consumed as such unless it is passed through another industry to undergo further manufacturing processes to obtain a finished product. For example, capsule shells are manufactured in one kind of industry but filling is done in another kind of industry. Similarly pig iron, cotton yarn and pulp etc. are some of the examples of semi-manufactured goods.
Manufactured goods
Manufactured goods are those goods which are ready for use by the consumers or other users. The examples of manufactured goods include cloth, shoes, sugar, paper, various medicines, machines tools etc.
The manufactured goods are further classified as
- Capital or producer’s goods
- Consumer’s goods
I. Capital or producer’s goods
Capital or producer’s goods are those goods which are used in the process producing some other goods. The examples of producer’s goods include pig iron, store items, machine tools and machinery etc. used for manufacturing other products.
ii.) Consumer’s goods
Consumer’s goods are those goods which are ready to use by the consumer’s goods include drugs such as tablets, capsules, syrups, injections etc.; cloth, shoes, soap, T.V., fridge, washing machine etc.
Classification of Industries
According to the types of goods produced the industries are classified as follows:
- Genetic industries
- Extractive industries
- Manufacturing industries
- Construction industries
Manufacturing industries
- Analytical industries
- Synthetic industries
- Processing industries
- Assembling industries
- Genetic industries
The word genetic is derived from the term “genetics” which means heredity. It means genetic industries are concerned with the reproduction or multiplication of plants, animals and birds. The examples of genetic industries include plant breeding nurseries, cattle breeding farms, poultry farms and fish hatcheries.
- Extractive industries
Extractive industries are those industries which are concerned with extraction or drawing out the products from natural sources such as soil, air or water. The products so obtained are generally used by other industries producing finished goods. Extractive industries include agriculture, mining, oil exploration, forestry, fishing etc.
- Manufacturing industries
Manufacturing industries are those industries which are engaged in the production of goods. Here the raw materials or semi-manufactured products are converted into finished goods i.e. capital goods or consumer’s goods. Generally the goods supplied by the extractive industries are used as a raw material for manufacturing industries. For example pharmaceutical, textile, jute, sugar, cement, engineering and steel industries are some of the examples of manufacturing industries which alter the form of raw materials to make them more useful to the consumer’s.
Manufacturing industries may be further sub-divided as follows:
- Analytical industries
- Synthetic industries
- Processing industries
- Assembling industries
1. Analytical industries
Analytical industries are those industries which are engaged in the analysis of one kind of basic material and after separating a number of products are obtained from the same material. For example, crude oil is extracted from beneath the earth which is subjected to fractional distillation. After fractional distillation it is separated into petrol, diesel, kerosene, gasoline and lubricating oil etc.
2. Synthetic industries
Synthetic industries are those industries where two or more than two materials are mixed together in a manufacturing process to make a new product. Products like various chemicals, drugs, soaps, cosmetics, paints, fertilizers, pesticides, cement etc. are produced by synthetic industries.
3. Processing industries
Assembling industries are those industries in which the raw materials are processed through different stages of production to produce the final product. In the processing industries the analytical and synthetic methods may also be used. Drugs and pharmaceutical industries, paper, textile, sugar and steel industries are some of the examples of processing industries.
4. Assembling industries
Assembling industries are those industries where the parts or components are assembled to make a useful product. The parts or components required in assembling may be produced by the assembling industry itself or obtained from other industries engaged in the manufacture of required components. Such industries are known as ancillary industries. For example, production of cars, scooters, watches, television, radio, computers, X-ray machines, E.C.G. machines etc. are the typical examples of assembling industries.
5. Construction industries
Construction industries are those industries which are engaged in the construction of roads, buildings, canals, bridges, dams etc. The products of other manufacturing industries such as iron, cement, bricks, stones, marble, wood, glass, rubber etc. are used by the construction industries. Construction industries are extremely important and useful for the economic development of any nation.
- COMMERCE
The main object of an industry is to produce goods and services for the satisfaction of human wants whereas commerce is concerned with the distribution of goods to the consumers and users according to their tastes, needs, and conveniences. It includes all those activities which are related to the transfer of goods from the place of production to the ultimate consumers. Thus commerce serves as a valuable link between the producer and the consumer. Now a days commerce consists of a complex well developed system of transport, insurance, warehousing and other similar activities which facilitate trade
In the words of Evelyn Thomas “Commercial occupations deals with the buying and selling of goods, the exchange of commodities and the distribution of the finished products.”
Production is done at certain places but consumers are scattered far and wide.
Their requirements cannot be met only with the centralization of supply of goods at a place. The commercial activities help in the distribution of goods to the consumers and users through markets situated at different places. Thus, consumers need and the quantities in which they need. In this way the wheels of commerce move on and on to render the exchange of goods as smooth as possible and to deploy the goods all over the market and make them available to the consumers.
James Stephenson defined commerce as “Commerce embraces all those is the sum total of those processes which help to break the barrier between producers and consumers. It is the sum total of those processes which are engaged in the removal of hindrances of persons(trade), place (transport and insurance) and time(warehousing) in the exchange(banking) of commodities.”
Components/Subdivisions of commerce
Commerce has the following components/subdivisions:
- Trade
- Aids to trade
Trade
Trade means buying and selling of goods. A trader purchases goods to be sold to other traders or consumers at a profit.Generally he buys those goods which are in demand or which are likely to find response in the market.He may hold them in the store and sell them at an appropriate time when he will be able to get good margin of profit.
Since the goods are manufactured at far off places but are required by the consumers all over the world, the producers cannot supply the goods individually to all the consumers. So he appoints some dealers or distributors for the distribution of goods known as traders. Thus traders acts as intermediaries between producers and consumers. They buy the goods at most competitive prices and sell at higher prices depending on the trends of demand in the market. Sometimes they may get good margin of profit but sometimes they may go in losses. Trade, thus refers to buying, selling, transfer or exchange of goods or services for money or money’s worth.
Classification of Trade
The trade is generally classified into following categories:
- Internal trade
- International trade
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