Scope of Commerce
Scope of commerce means or implies the coverage of commerce.
The scope of modern commerce has become very wide, perhaps it has no boundary at all, because it has crossed the boundaries of nations, and it has acquired an international status.
Scope of commerce includes the role played by trade and aids to trade, banks and insurance companies; transport and advertising agencies which have contributed to a large extent for widening the scope of commerce.
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Scope of commerce includes the roles played by the following:
- Aids to trade.
- Documents of trade.
- Commercial office.
- Commercial organisations.
- Marketing services.
- Goods and services.
Coverage of Commerce
Lets discuss the role played by above points in the coverage of commerce.
Trade plays a key role in the scope of commerce.
It relates to the study of various procedures involved in buying and selling of goods both in home trade and foreign trade. It takes place not only, between individuals on limited scale but also between multi-national corporations (MNC) and governments of different countries on a very vast scale.
2. Aids to trade
Aids to trade play a significant role in bringing commodities from centers of production to centers of consumption. It includes a detailed study of all the various auxiliaries of trade such as transport and communication, warehousing, banking, insurance, advertising, mercantile agents, etc. Each one of these further has several branches.
Aids to trade supplement smooth functioning of trade and is therefore, also included in the scope of commerce.
3. Documents of trade
The detail study of various documents that are used in home as well as foreign trade is included in scope of commerce.
The important documents used in home-trade are:
- Bill of exchange,
- Promissory notes, Vouchers,
- Warehousing receipts,
- Railway receipts, etc.
The significant documents used in foreign trade are:
- Bills of lading,
- Letters of credit,
- Documentary bills of exchange, etc.
4. Commercial office
Commercial office is the nucleus of business activity because it is through the office that planning, execution of business activity is conducted.
Commercial office is the backbone of business.
In words of Prof. Dicksee,
“The office is to a business, what the mainspring is to a watch.”
5. Commercial organisations
Business activities are conducted by various commercial organisations.
Scope of commerce includes various forms (types) of commercial organisations like:
- Sole trading concerns also known as sole-proprietary organizations,
- Partnership firms,
- Joint-stock companies,
- Co-operative societies and
- Public sector or state enterprises like government companies.
6. Marketing services
Scope of commerce also includes marketing services.
There are numerous intermediaries, which ensure a smooth flow of goods by undertaking marketing functions like assembling, warehousing, grading, packing, etc.
7. Goods and services
Commerce deals with exchange of goods and services.
Goods include tangible goods such as toothpaste, soaps, computers, etc.
Services cover intangible and invisible functions of banks, insurance, airlines, hotels, hospitals, etc.
The exchange of all types of goods and services come under the scope of commerce.
Classification of human activity
Following chart shows an economic classification of human activity.
Above discussion gives us an overall understanding that the scope of commerce has become very wide and is growing.