Business & Commercial Knowledge - An Insight

Prepared by
Vidya A R
Asst Professor
KMCT Law College
Kuttippuram

Vidya A R
 Introduction
• Domain is a specified sphere of knowledge
• Sphere is
• Vast ie Deals with manufacturing, trading (domestic and foreign),
commerce (Aids to trading/ Auxiliaries to trade) and services
• Scale depends onsize of investments made, covering MSML,
Medium, Small, Micro, Large Enterprizes

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• Geographic scope - Local, National, Multinational
• Ownership - State owned, Public Sector, Private sector (Sole
Proprietorship, partnership, company/corporate sector)
• Market Resources - Equipments, Commodities, Capital, Labour,
Product Markets
• Stakeholders - Entreprenurs, Promoters,Customers, Investors,
Business owners, Directors, Shareholders, Managers,
Employees, Suppliers, Laws and Regulation,Policy makers,
Supporting/Facilitating organizations, Society At Large

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• Functions- Production/Operations, Marketing, Accounting,
Finance and Taxation, HR
• Focus - Company, Enterprise wide, a particular business line, a
particular function
• Concerns - Survival, profitability, growth, sustainability, social
responsibilities, Governance, Values and ethics
• Mode - Traditional, Physical/Brick & Mortar/In-store,Digital, Online
• Underlying disciplines - Economics, Law, Philosophy, psychology,
Sociology

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 BCK vocabulary
• Each discipline has its own vocabulary which contributes
towards BCK vocabulary
• In its original discipline, strategy has a military description.
• Just like war strategy outsmart troops, a business strategy beats
the competitors

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• Logistics also from military ie movement of troops, military
supplies and equipments.
• In business, it means an operation involving many people
facilities/supplies
• Inbound logistics, imply the movement of inputs and outbound
logistics, the movement of outputs

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• Bulls In biology (Animal Psychology) - Bulls throw up their
enemies in combat the same way bulls imply the stockmarket
players who raise the stock prices through building a buy
preassure
• Bullish is being optimistic that an economy/market/busness is
likely to do well
• Bears have the tendency to embrace and push their enemies
downwards in a combat.
• Bears in a stock market have pessimistic expectations

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 Nature
• Ever involving and expanding
• Business affected by technology, society, economy and the like
• Business environment stay updated, learn and unlearn

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 BCK & CAs
• CAs put in place a credible system of truthful and fair accounting
and reporting of the society's resources, their deployment and
utilization
• Each business is peculiar
• Notion of cost, inventory, revenue and profits different in FMCG
and hotels
• Laws also affect
Note: Watch NDTV, CNBC etc, Read Business standard, ET etc

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 Human Activities
• Categorized into
1. Economic
• Presence of livelihood motive
• To earn a living
• Driven rationally

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 2. Non economic
• Driven by emotional or sentimental reasons or altruism ie concern
for the welfare of others
• Social, Religious, cultural, personal, recreational, charity and
patriotic activities

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 Characteristics of Economic activities
1. Income generating
• In economies individuals possess one or more factors of
production, labour, and, capital and entrepreneurship
• Corresponding income in exchange for their factor services are
wages, salary, rent, interest and profit
• Income may be in kind also
• Income generated in the process of production

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2. Productive
• Earning of livelihood = Participation in the process of production ie
manufacturing
• May be done for subsistence ie self consumption or for market
• Production represents the supply side of economies
• Consumption is an economic activity representing the demand
side ie goods and services on which people spend their income
• Production is organized in response to the demand

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 3. Savings, Investment and wealth
• Unspent income becomes savings which leads to investment and
wealth through financial sector ie Banks, NBFCs, Mutual funds in
stockmarkets, real estate, gold etc
• Corporates and governments borrow from them

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 Business as an Economic Activity
• Covers Production, distribution and trading (Exchange) of goods
and services
• Classified into Industry,Trade and commerce, aid to trade like
banking

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 ICAI logo

• “Ya Aeshu Suptaeshu Jagruti”

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• When a CA ticks, its inverted tick means it is different
• Actively participated in GST formulation.
• So Abdul Kalam called “Partners to Nation building”

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 Business, Profession and Employment
• Business is all market oriented activities coming under Industry,
Trade and commerce
• Mode of establishment is Entreprenurs decision and other legal
formalities
• Profit is the source of livelihood
• No prescribed qualification needed
• Founder's value is the ethical guidance
• Substantial requirement of investments

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• Personal autonomy / Freedom, the most ie you are your own boss
• Economic achievement is the popular psychological motive
• Certainity of income is the least
• Income stability or durability is uncertain
• Transfer of interest or succession possible

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 Profession
• Profession is independent rendering of services of special
character based on specified qualification under a professional
body giving a code of conduct
• Mode of establishment is membership of professional body and
certificate of practice
• Professional fee is the source of livelihood
• Strictly prescribed qualification needed
• Professional code is the ethical guidance
• Some requirement of investments

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• Personal autonomy / Freedom, quite a bit
• Service to the client/society is the popular psychological motive
• Certainity of income is quite a bit
• Income stability or durability quite certain
• Transfer of interest or succession not possible

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 Employment
• Rendering of services under a contract of employment for
wages/salary - also called wage employment
• Mode of establishment is letter of appointment and service
agreement
• Wages and salaries is the source of livelihood
• Minimum qualification for each job needed
• Employer's code is the ethical guidance
• Not much investments

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• Personal autonomy / Freedom, not much
• Livelihood is the popular psychological motive
• Certainity of income is the most
• Income stability or durability quite certain
• Transfer of interest or succession not possible

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Thank You

Vidya A R