Class Notes
Class: XI Topic: Nature and purpose of Business
Subject: BUSINESS
STUDIES
CLASSIFICATION OF BUSINESS ACTIVITIES
Business Activities can be classified into two categories:
Business •Industry
Activities •Commerce
A. Industry- It refers to economic activities which are connected with conversion of
resources into useful goods.
It also includes:
Mechanical and technical skills
Breeding and raising of animals and plants
Processing of goods
Group of firms producing similar or related goods.
Industry may be further divided into
Primary
Secondary
Tertiary
Primary Industries: Those activities which are concerned with the extraction
and production of natural resources and breeding of living organisms.
It is further subdivided into:
Extractive
• These industries extract or draw out products from natural sources. Eg.
Farming, Mining, hunting etc
Genetic
• These industries are involved in breeding of plants and animals. Eg. Poultry
farms, Pisciculture, Nurseries etc
Secondary Industries:
These industries process raw materials which has been extracted in the Primary
industries and convert them into semi-finished and finished goods.
Secondary industries may be further classified into:
Manufacturing:
•Analytical: Analyses and separates different elements from the same
materials.
•Synthetical: Combines various ingredients into a new product.
•Processing: Successive stages for manufacturing finished goods.
•Assembling: Assembles different components/ parts to make a new
product.
Construction
•Industries involved in the construction of buildings, dams bridges,
roads etc
Tertiary Industries: These are concerned with providing services to primary
and secondary industries as well as activities related to trade.
B. Commerce: All those activities which are necessary for maintaining free
flow of goods and services is Commerce. It includes two types of activities.
Trade and Auxiliaries to trade.
Trade
• Buying and selling of goods is trade. It can be internal or
External trade.
Auxiliaries to Trade
• Activities which assist trade. Banking,
insurance,Transportation and communication,
Warehousing and Advertisement.
Functions of Commerce:
It removes various hindrances in the process of exchange.
Hindrance of Persons: Commerce removes Hindrance of Persons with the
help of trade by making goods available to the consumers.
Hindrance of Place: Commerce removes the Hindrance of Place with the
help of transportation by moving goods from the place of production to
the place of consumption.
Hindrance of Time: Commerce removes the Hindrance of Time with the
help of warehousing facility which facilitates the storage of goods till it is
demanded in the market.
Hindrance of Risk: Commerce removes the Hindrance of Risk by providing
protection against various risks which may arise during storage of goods
or during its transportation with the help of Insurance.
Hindrance of Finance: Commerce removes the Hindrance to finance by
providing finance through banks and financial institutions.
Hindrance of Knowledge: Commerce removes the Hindrance of
knowledge with the help of advertisement. Advertisement makes it
possible to inform the consumers about the availability of various goods
and services in the market.
Content Prepared from home RNS
