Introduction to Commerce

Asst. Prof. Sukanya Desai

Company Secretary (Professional), SET(Commerce), M.com
(accountancy)
 Introduction
(IT’S ALL ABOUT COMMERCE)

An Ecosystem

Business
Organisations Functions

Business
Stakeholders
Environment
 Business

For Profit Organisations Non-profit Organisations

 Characteristics of Business

Production/
Economic Selling of Goods
Purchase of Goods
Activity and Services
and Services

Uncertainty
Regularity in in Returns
transactions Element of
Profit motive Risk

Providing Best Legal and

Value Lawful
Capital Customer
Appreciation satisfaction
 Classification of Business Activities

Curated by Asst. Prof. Sukanya Desai

Curated by Mrs. Sukanya Desai

 Classification of Business Activities
Curated by Asst. Prof. Sukanya Desai
 Classification of Business Activities

Industry Commerce

• Economic activities that are associated with the conversion of resources into goods that are
ready for consumption.
• Involves Production, Processing, Mining of goods.

Primary Secondary Tertiary

Industry Industry Industry

Extractive Manufacturing Service

Genetic Construction sector
Industry
 Primary
Industry
Curated by Asst. Prof. Sukanya Desai
This sector of a nation's
economy includes
agriculture, forestry,
fishing, mining,
quarrying, and the
extraction of minerals.
Secondary
Industry
Basic list of Manufacturing
and Industry sector,
the secondary sector is following:
Automotive.
Electrical industry.
Pharmaceutical Industry.
Chemical Industry.
Metallurgical industry.
Construction Industry.
Food Industry.
textile production.
car manufacturing, and
handicraft.
Tertiary
Industry
These include IT and ITeS,
Tourism and Hospitality Services,
Medical, Travel,
Transport and Logistics Services,
Accounting and Finance Services,
Audio Visual Services,
Legal Services,
Communication Services,
Construction Related
Engineering Services,
Environmental Services,
Financial Services and
Education Services
 Classification of Business Activities
Industry Commerce

• Commerce refers to the buying and selling of goods for value.

Wholesale • Involves all those activities which facilitate the transactions.
Retailer Domestic
Auxiliaries
Trade
to Trade
Export
Foreign
Import
Entrepot Communication Transport

Banking & Finance Warehousing

Insurance Advertising

Curated by Mrs. Sukanya Desai

 Objectives of Business
I Economic Objectives:
• Profit making
• Creating customers
• Market development
• Product development
• Wealth creation
II Social Objectives:
• Supplying desired goods
at reasonable prices
• Employment generation
• Fair remuneration ____
• Fair returns ______
• Social welfare
• Payment of government
dues
 Objectives of Business
III Human based Objectives: IV National Objectives:
• Labour welfare • Optimum utilisation of
• Developing HR resources
• Participative management • Self-reliance
• Cooperation • Development of small
scale industries
• Development of
backward areas.
 Pre-requisites of a Successful Business

1. Establishment of clear objectives

2. Proper planning and clear policy
3. Sound organisation and effective management
4. Dynamic leadership
5. Pleasant personality
6. Adequate capital/proper financial planning
7. Proper location and layout
8. Employees morale
9. Modern technology
10. Research and innovation
11. Efficient marketing
 Business Organisations

Types

Non-Corporate Corporate
Sole proprietorship Limited Liability Partnership
Partnership Firm Joint Stock Company
HUF
Co-operative Society
 Business Functions
Functions

Organisational Managerial

Administration Planning
Purchasing Organising
Production Co-ordinating
Finance Directing
Marketing Staffing
Human Resource Control
Public Relations Decision making
Sales
Customer Service
 Stakeholders

Government Customers
Owners Suppliers
Distributors

Investors
Management Who has stake in a
business?
Creditors
Competitors

Employees Communities
Shareholders
 Some Important Study Areas
• Accounting
• Auditing
• Corporate Governance
• Logistics and Supply Chain Management
• Taxation
• Compliance with laws
• Business Environment
• Business Economics
 Ultimate Effectiveness and Efficiency

Customers’ Requirements Providing best customer value

Efficient and Talented Manpower

Cash Flows and Working
Capital
Achieving Scalability

Customer Loyalty
Innovations and Robust Information Systems

Brand Positioning Resource Planning

Curated by Asst. Prof. Sukanya Desai
 Business + Environment = Business Environment
• A business is defined as an organization or enterprise or entity
• engaged in commercial, industrial, or professional activities.
• Business may be understood as the organized efforts of an enterprise to supply
consumers with goods and services for a profit.
• Entities can be profit making or they can be non-profit organizations (that operate
to fulfil a charitable mission or further a social cause).
• There are various forms of a business, such as a limited liability Partnership
(LLP), a sole proprietorship, a corporation, and a partnership.
• Businesses can range from small operations operating in one industry to large
operations operating in many industries around the world.
• The phrase ‘business environment’ indicates the aggregate total of all people,
organisations and other forces that are outside the power/ control of industry but
that may affect its business.
 Salient features of Business Environment
Understanding environment within which the business is to operate is very
important for successful business.
Some of the features of business environment are as follows:
• Totality of External Forces
• Specific and General Forces
• Relative
• Dynamic
• Uncertain
• Complex
• Multi-faceted
 Types of Business Environment

Business Environment

Internal External
Vision and Mission MACRO MICRO
Organizational Objectives (General Environment) (Operating Environment)
Organizational Culture Economic Customers
Organisational Structure Ecological Competitors
Resources and assets Technological Suppliers
Profits and cashflow Socio Cultural Distributors
Management And Demographic Intermediaries
Policies and strategies Political and Legal Employees
Business Ethics Shareholders
Corporate Governance Media
Company image General Public
Brand equity
 Business Environment

Internal External
Vision and Mission MACRO MICRO
Organizational Objectives (General (Operating
Organizational Culture Environment) Environment)
Organisational Structure
Customers
Resources and assets
STEEP Analysis: Competitors
Profits and cashflow
Management Socio Cultural Suppliers
Policies and strategies And Demographic Distributors
Business Ethics Technological Intermediaries
Corporate Governance Economic Employees
Company image Ecological Shareholders
Brand equity Political and Legal Media
General Public
“Thank You”

Asst. Prof. Sukanya Desai

Company Secretary (Professional), SET(Commerce), M.com (accountancy)