Business: Introduction & Concept
Author: Ahmad Reza Taheri
B.Com. M.Com. M.A. &
Research (Ph.D) student in Political Science
Publisher: Nashre Roosta
Quantity: 1000
First Edition: 2001
Price: (In Iran, 16000 Rials) and ( In Pakistan, 150.00 Rupees).
ISBN: 964 - 93423 - 0 - 3
Printed by: Printing House of Sistan & Balochistan University, university Road, Zahedan, Iran.
All rights reserved. No part of this publication may be reproduced without the permission in writing of the author.
بازرگانی: معرفی و مفهوم
تألیف: احمدرضا طاهری
ACKNOWLEDGMENT
I would like to offer my special thanks to my dear father, Dr.Mohammad Reza Taheri (Ph.D) a political Secince, Law, and Accounting professor. I would like to express my appreciation for his support , suggestions and hard work in making this book possible. His suggestions were extremely valuable.
My special thanks to Mr.Gholam Mohammad Khanzai, he was kind enough to take me to Karachi and was my focal point in Pakistan. This book could never have come into being without his cooperation.
Many thanks to Mr.Nawaz Ali Bhutto, the registrar of Sindh university for admitting me to this university and introducing me to the Department of Commerce.
I also would like to thank my teachers : Ms. Nusrat Fatima (M.Com) , Mr. Ashique Jatial (M.Phil) , Mr. Javid Chandio (M.Phil) , former chairman professor Manzoor Ahmed Shikh and professor Aga Riaz (current chairman).
Professor Hafiz Abro Director of Pakistan American cultural center and Professor Muneerudin Somro helped me much. Their kind assistance , contributions , personalities , methods and friendship have effected me most. I'm very grateful to Professor Emdad Ali Brahoee , Mr. Ali Reza Taheri and other members of my family especially my dear brother Omid Reza Taheri, a Ph.D student in Cognitive System.
At the end I like to assert that this book is the result of the collective contributions of these people and many others.
FOREWORD
As education in the field of Business and Commerce is getting popular day by day among the new generation , so the need was felt to produce some work on this subject. Although many books and articles about business are published annually , yet it is noteworthy to remember that this book is helpful to both the first year students of Business or Commerce at the B.Com level, and to the ordinary people to enhance their general knowledge of business. Many of the subjects which I have pointed in this book could be books in themselves. However since my aim was only to introduce this comprehensive science , therefore every thing is directed toward providing readers with an introductory view on Business. I am going to give you an introductory information regarding Business and its concept. I believe you find this book an effective one and my hope is that you will get as much out of this book as I have.
INTRODUCTION
In the early years of existence human being like any other creature used to search for its primary needs such as : nutrition to prevent hunger and shelter to be safe from danger. Actually there was no big difference between human being and other social animals. They could live , eat and sleep together. Among human being itself those who got more physical strength could easily dominate over other weakling ones so that may own their belongings , encroach upon their privileges and to have sexual abuses. Of course that , these horrible events still are happening in some parts of the world particularly in undeveloped and developing countries.
Long ago for many years people used to live in isolation. But later on they felt , to live individually is no more for their interest . They realized people are dependent on each other, for human began to joined in groups so as to may dominate over the surroundings and be able to get its desires. Therefore, individualism turned into socialism and since then human became known as a social or political animal. The interesting point of this political animal is its sense of knowingness which naturally was planted in its mind.
Earlier on , human history notion of life was very simple. People depended only to hunting , fishing and collection of wild fruits. Leaves and skins met their requirements of clothing and living in caves or over the trees could protect them from wild animals or other naturals phenomenon. Such groups or Normadic tribes were moving from one place to another to find their needs but mostly they preferred to stay by the side of lakes, rivers or near sea-shores.
Gradually and slowly human began to domesticate those animals which were beneficial like: sheep, goat, and cattle . These animals could provide human with milk and meat for food and skin for clothing . Now contrary to the past , they started to live in fixed places so that may cultivate their nearby lands… Cultivation led to agriculture where it became the primary occupation , then automatically this event led to the growth of villages and communities. Relative to this , three systems introduced one after the another. They are : Handicraft System , Domestic System and Barter System.
Handicraft System: In this system people began to produce clothing, housing and other related agricultural materials. These people are known as professional craftsmen like blacksmiths and weavers. They used of simple and inexpensive tools with the help of family labor to produce agricultural requirements at their homes and then exchange them with other agricultural products.
Domestic System: This system brought the new class of people who called merchants. Merchants or middlemen supplied raw materials and even tools to the craftsmen, then craftsmen undertook to convert raw materials into finished products at their own cottages or homes and in return received wages according to their performance. Middlemen or merchants collected those finished products from artisans or craftsmen and then sold them to the consumers.
Barter System: The handicraft system introduced division of labor which necessitated the exchange of goods. But money was not yet introduced. Hence artisans and agriculturists used to exchange their products directly, that is without the employment of money as a medium of exchange. Such a system of exchanging goods and services for other goods and services without using of money is called Barter system which in course of time this system suffered from various limitations. The limitations and inconveniences of barter system became apparent. So this caused the invention of medium of exchange. In the beginning some commodities such like : precious stones, shells, skins and ivory were commonly used as a medium of exchange. Subsequently other valuable metals like: gold and silver were used and finally paper money introduced.
Introduction of paper money as a medium of exchange gave a fillip to the extension of labor division. People began to produce goods according to their own skills and inclination to exchange their products. They set up special places which now called markets. These local markets gradually developed into towns and became the center of manufactured goods. Thus the size of markets and number of commodities exchanged increased to a great extent.
Partially it was under the stimulus of such environment that a fundamental revolution known as industrial revolution began in the British industry during the second half of eighteen century and first half of the nineteen century. Due to that, series of remarkable changes occurred not only in British industry, but also in other industries of different countries. This revolution was a phenomenon that radically altered the whole system of production and life of the countries. It turned the page of history to start a new chapter in human thought and activity. Some of the important features of this revolution are : mass production, capitalistic production, specialization, change in economy policy, rise in standard of living and trade cycles. The industrial revolution which started as a small cloud on the horizon of British industry in a short span of time spread over to the industrial sphere all over the world. Under the factory system ( the child of the industrial revolution ) workers now working in thousands of large factories located not at the homes of workmen but in elaborate buildings , built for the purpose mostly in cities or suburbs of the cities. The scale of production enlarged many times and products catered to the needs and tastes of consumers.
Recent advancement in the fields of science and technology, transport and communication together with the innovations and inventions have extensively widened the scope of commercial and business activities.
CONCLUSION
In these concluding remarks, I would like to remind you again the summarized definitions of Business and its parts plus its relation with Economics and their importance towards each other.
Trade is concerned with the actual buying and selling of goods. It classified into : home trade and foreign trade. Home trade or internal trade consisted of wholesale and retail trade. Foreign trade or international trade divided under the two heads : import trade and export trade. Trade itself is the main branch of commerce.
Industry means : all factories and companies involved in the manufacturing or production of goods. It is also a collective term for a group of firms operating in the same area of production. Thus it is concerned with the production. For the production we need finance and capital , without finance and capital we are unable to produce goods. So, both capital and finance will come under the umbrella of Commerce.
Commerce, in fact evolution of Business is the evolution of Commerce. It is the life blood of Business and plays an important role in the economy of a country. Because an economy extensively depends on the commerce. For example : enactment of commercial code or law of commerce plus commercial activities such as : trade, transport, finance, banking, insurance, warehousing, and marketing all in all would support and allow an industry to produce its products, then again after that, commerce establishes the necessary link between producers and consumers by the means of distribution.
Business , M.H.Ali the writer of (Business Organizations) in the beginning part of his book says : "the main objective of business is to earn profit. A business enterprise seeks to earn profits by exchanging goods and services for money. But every exchange of goods or services does not come within the definition of business. Those exchange of goods and services are considered as business which bring some profit to the exchangers."
Although M.H.Ali's book (Business Organizations) was a good and useful source for my work and I got some valuable information, nevertheless I would like to criticize a part of his definition concerning " Business" which he has written : "every exchange of goods or services does not come within the definition of business. Those exchange of goods and services are considered as business which bring some profit to the exchangers."
This above definition is suitable for the case of "Trade" but not Business. Because, Business is a wide science. We agreed that the main object of Business is to earn profit. Some where else business has been defined as : "an individual or group of individuals engaged in a trade, service or commercial activity with a view to making profit."
Well, in principle individual or group of individuals who engaged in any activity with a view to make a profit, but if they could not make profit from their business howsoever in that manner this situation also may called business , if not , then there is no any differences between the concept of Business and Commerce or Trade (study this fact radically) . Because all business activities which set up with a view of making profit in practice may not bring profit but so are called business. Let me to go further , I mean : even smuggling is a kind of business but we can not say that it is a kind of commerce. Remember that business is a comprehensive science which encompasses the over all commercial and industrial activities whether legal or illegal .
Economics, when we are talking about Business or Commerce willy-nilly the issue of Economics will come under the discussion. Because making profit will satisfy human wants and so satisfaction of wants is the main motive of Economics. By Economics we mean : analyzing the commercial and industrial operations and activities so as to find the most effective ways to develop a country's commerce and economy.
