Business Trade and Commerce – Complete Guide For Class 11 Business Studies Chapter 1

Our learning resources for the chapter, Business Trade and Commerce which is Chapter 1 for Class 11th Business Studies are designed to ensure that you grasp this concept with clarity and perfection. Whether you’re studying for an upcoming exam or strengthening your concepts, our engaging animated videos, practice questions and notes offer you the best of integrated learning with interesting explanations and examples. 

Understanding the nature and purpose of business is essential for students of Class 11th Commerce. This chapter delves into various aspects of business trade and commerce through real-life examples and explanations. Let’s dive into some scenarios to grasp these concepts better.

Specialized Knowledge: A Case Study of Sachin Tendulkar

When we talk about specialized knowledge in professions, Sachin Tendulkar is a name that comes to mind. Let’s explore his economic activity.

Scenario: Sachin Tendulkar is one of the highest-paid cricketers in the Indian team.

Question: Name the economic activity in which Sachin Tendulkar is engaged.

Explanation: Sachin Tendulkar has specialized knowledge and skills in cricket. He is neither in business nor in employment; hence, he is categorized as a professional.

So, that was an example of specialized knowledge in a profession. Now, let’s move on to another scenario involving a fisherman.

The Fisherman of Kerala: Rajesh’s Profession

Have you ever wondered if all skilled individuals are considered professionals? Let’s consider the case of Rajesh, a fisherman.

Scenario: Rajesh is a fisherman in Kerala. He goes fishing every day to get his livelihood.

Question: Can Rajesh be considered a professional?

Explanation: Rajesh cannot be considered a professional, although he possesses special skills and knowledge of fishing. He is not involved in selling services.

We have seen the distinction between professional and skilled labor. Now, let’s examine a company’s social responsibility.

Corporate Social Responsibility: Hindalco Limited’s Initiative

When it comes to Business Trade and Commerce, Companies often take initiatives that go beyond their profit motives. Let’s see how Hindalco Limited does this through CSR activities.

Scenario: Hindalco Limited has taken up a tree plantation along a busy road in an urban area.

Question: Which objective is Hindalco Limited trying to achieve?

Explanation: This is an example of Corporate Social Responsibility (CSR). CSR involves corporate self-regulation integrated into a business model. Hindalco Limited is fulfilling its responsibility towards society by protecting the environment through tree plantation.

Having explored CSR, let’s look at another aspect of economic activities with a focus on teaching at home.

Economic Activities: Teaching at Home

Ever thought if teaching your family members counts as an economic activity? Let’s find out.

Scenario: Ms. Maya teaches her daughter at home.

Question: Is it an economic activity?

Explanation: When Ms. Maya teaches her daughter, she does not receive any fee in return. Therefore, this cannot be considered an economic activity.

Moving on from individual teaching, let’s dive into the economic objectives of launching a new product.

Economic Objectives: Tata Motors and the Nano Car

Economic objectives drive many business decisions. Let’s understand this through Tata Motors’ launch of the Nano car.

Scenario: Tata Motors announced that Tata Nano will be commercially launched in 2009, aiming for a price of Rs 1,00,000.

Question: Explain the economic objectives of Tata Motors in launching the Nano car.

Explanation: Tata Motors had several economic objectives:

• Earning profit by keeping the car price low.
• Increasing the number of customers.
• Gaining worldwide publicity without additional advertising expenses.

So, we have discussed economic objectives. Now, let’s talk about the social objectives of businesses.

Social Objectives of Business

Businesses also have social objectives. Let’s see what these objectives can be with some examples.

Some objectives of a business are:

• Better quality of goods
• Treating workers as partners
• Generation of employment
• Innovation
• Job satisfaction of employees

Question: Identify two social objectives of business from the above information.

Explanation: Two social objectives of a business are:

1. Better Quality of Goods: Improving product quality enhances the living standards of society.
2. Generation of Employment: Providing job opportunities reduces unemployment.

With social objectives covered, let’s explore the different types of industries.

Extractive and Genetic Industries

Industries can be categorized based on their nature. Let’s look at an example involving rice cultivation and fish breeding.

Scenario: Look at the picture of a rice crop. Along with growing rice, another industry genetic in nature is in progress.

Question: How can you support this statement?

Explanation:

• Extractive Industry: Rice crop cultivation is part of the extractive industry, which draws products from natural sources.
• Genetic Industry: Fish breeding in flooded rice fields is an example of a genetic industry, involving the breeding of plants and animals.

Understanding industry types is essential. Now, let’s classify different occupations into these industry categories.

Classifying Occupations into Industries

People are involved in various occupations, which can be classified into different industries. Let’s do some classification.

Scenario: List of people involved in different occupations:

• Bank clerk
• Factory worker
• Doctor
• Tailor
• Teacher
• Carpenter
• Potter

Question: Classify them into different industries they are involved in.

Explanation:

Classifying occupations helps in understanding the workforce better. Now, let’s see how commerce removes various hindrances in trade.

Commerce and Services

Commerce plays a crucial role in bridging the gap between producers and consumers. Let’s look at how different services help in this process.

Question: Name the service used against each hindrance in the table below.

Explanation:

From understanding commerce, let’s move on to how career changes can shift the type of economic activity.

Change in Economic Activity: Rajat’s Career Shift

Career shifts can change the nature of one’s economic activity. Let’s consider the case of Rajat, a doctor.

Scenario: Rajat, a doctor, started his own clinic but later joined a hospital.

Question: Is there any change in his activity?

Explanation: Rajat transitioned from practicing independently (profession) to working under a contract in a hospital (employment). His activity changed from profession to employment.

Shifting economic activities are part of professional life. Now, let’s discuss business risks, distinguishing between insurable and non-insurable risks.

Business Risks: Insurable vs. Non-Insurable

Business risks come in various forms. Let’s identify which risks are insurable and which are not.

Question: Divide the following items into insurable and non-insurable risks:

• Failure of machinery
• Bad debts
• Change in demand for goods
• Flood
• Carelessness of an employee

Explanation:

Having distinguished between insurable and non-insurable risks, let’s consider the impact of natural disasters on businesses.

Business Risk: Natural Disasters

Natural disasters pose significant risks to businesses. Let’s examine the case of the 2008 Bihar flood.

Scenario: The 2008 Bihar flood affected over 2.3 million people, causing loss of homes and businesses.

Question: Under which causes of business risk is flood included?

Explanation: Flood is a natural disaster and falls under the category of business risks that are unavoidable by any business enterprise.

By understanding these concepts, students can grasp the diverse nature of business activities and their implications in the real world. With these insights, they can better appreciate the intricacies of business trade and commerce. Now that we’ve covered the nature and purpose of business, let’s explore the next chapter to deepen our understanding further.