Business activity as category of market economy

Organization of a business activity

The entrepreneurship and business represent independent, any initiative activities of certain citizens or groups of citizens which they perform at own risk, under the property responsibility and directed, mainly, to receipt of an economic benefit in the form of profit.

Depending on the main field of activity allocate several types of an entrepreneurship and business — production business, commercial, financial business, etc.

category of market economy

The concept «commerce» arose later (Latin «Commercium» — trade). In broad understanding — it is business activity in the trade sphere.

According to the dictionary by Dahl commerce is a trade, business volumes, merchant crafts, according to the dictionary by Ojegov is a trade, trading activities. In the Market Language dictionary (1992) commerce is considered as trade, as any sale of goods in the form of trade independently because whether they are made by the marketing person or are purchased at other persons. The compulsory provision in these activities the fact that it is always directed to receipt of business (trade) profit.

In pre-revolutionary Russia commerce attached great value, and even the honorary title «The adviser of commerce» was entered. (Today — the Honoured worker of trade.)

In modern literature there is a set of determinations of the concept «commerce».

In the narrow sense of the word «commerce» is an acquisition and sale (sale) of goods. In a broader sense understand any business activity directed to profit earning as commerce, i.e. commerce is kind of an entrepreneurship component.

Tasks and functions of a business activity

The business activity is:

  • complex of the transactions providing purchase and sale of goods and together with trade processes representing trade in the broadest sense;
  • the special type of activity connected with sales of goods on which resulting effects of work of trade enterprise depend;
  • commodity-money exchange in the course of which goods from the supplier carry over trade enterprise with orientation to requirements of the market;
  • all that provides the maximum advantage of a commercial transaction for each of partners in case of first-priority accounting of requests of consumers;
  • operational and organizational activities for implementation of transactions of exchange of inventory items for the purpose of a requirements satisfaction of the population and profit earning.

The business activity finishes process of commodity production, the resulting effect of work of the organization depends on it.

Through a business activity communication of the organization with final consumers of its products and services is performed. Commercial services work with specific goods, the supplier and the buyer and function while there are a need and an opportunity to sell goods or service.

The business activity assumes the solution of a task of sale of already made specific product. For this purpose on commodity market and services the balance of interests of the seller and buyer shall be reached.

For sellers (entrepreneurs) benefit is income gained from the transaction, and for buyers — the goods (service) which are best satisfying requirement.

Thus, commerce is the activities performed by individuals, the entities on extraction of the natural benefits for production or acquisition and sales of goods or rendering services in exchange for other goods, services or money to a mutual advantage of interested persons or the organizations.

From a business activity the proper response to changes of a market situation is required that promotes a steady position of trade enterprise in the market. At least important point is also orientation to the buyer. The trade enterprise of any pattern of ownership exists for consumers and thanks to consumers. Therefore, all attention and funds of a business activity shall be allocated for implementation of wishes and requests of buyers.

As already noted, the main function of the goods circulation is change of forms of cost. But besides, the goods circulation performs also other (additional) functions. They are called production as they are connected with continuation of a production process in the sphere of the address.

In the course of a business activity trade workers study demand of the population and the market of goods, determine the need for them, reveal sources and suppliers of goods, establish with them economic connection, do wholesale and retail business, are engaged in promotional and informational activities. Besides, a lot of work on forming of an assortment and management of trade inventories, rendering trade services is carried out.

All these types of activity are interconnected and are carried out in a certain sequence.

Depending on the work content commercial functions can be subdivided into two main types:

— functions of commercial nature (trade — purchase, sale, resale);
— functions of production nature (technological — delivery, delivery, acceptance, shipment).

Functions of commercial nature are the processes connected with change of cost, i.e. with purchase and sale of goods for the purpose of profit earning.

The works connected with implementation of process of a purchase sales and, exchange of goods concern them:

  • studying and consumer demand forecasting on goods;
  • studying and detection of needs of the population for goods and services;
  • identification and studying of sources of goods (producers or intermediaries), including signing of the contracts on delivery, development of requests and orders for goods, organization of accounting and control of accomplishment of contractual conditions, commercial calculations;
  • the organization and technology of carrying out wholesale purchases at different producers;
  • the organization and technology of wholesale and retail sale of goods, including forms and sales methods of goods, service quality;
  • sales promotion through promotional and informational activities and progressive forms of trade;
  • forming of a trade assortment and management of trade inventories;
  • goods insurance on delivery.

Functions of technological nature are the processes connected with movement of goods as potentiality cost and which are continuation of a production process in the sphere of the address (transportation, storage, packaging, packing, sub-sorting).

Commercial work is activities on commodity market and services in the conditions of complete economic freedom which is determined by proportions between the demand and supply and is regulated by the state by means of economic levers.

The main objectives of a business activity in trade are:

— involvement in a goods turnover of products of the entities of various patterns of ownership, first of all domestic manufacturers.

Therefore commercial workers shall know well not only the economic region, but also other areas, geography of placement of production, natural resources, etc.

They also shall know the range of the products issued by the entities of the region whenever possible to visit production enterprises, to take part in work of the exchanges, exhibitions, fairs, the wholesale markets, to monitor advertisements in media. catalogs, handouts:

  • studying and forecasting of reservoir of the regional goods markets. For this purpose it is necessary to use marketing which helps to organize a business activity in market conditions;
  • development and enhancement of promotional and informational activities;
  • creation of conditions for market grouping of the buyer. The market can be characterized as the market of the seller and the market of the buyer. In the first case the product demand exceeds the offer, in the second — goods offering exceeds demand for them that determines a priority provision of the consumer as it has options of the choice of goods;
  • search of the interested partners and their transformation into the clients for a long time;
  • professional consultation of interested persons and clients of rather consumer properties of goods, guarantee and after-guarantee maintenance;
  • requirements satisfaction of buyers the offer not only the main, but also the accompanying, complementing range of goods;
  • strengthening of business relations with clients;
  • the aspiration to quote such prices which make not only profit but also give the chance to provide a privilege to buyers in a discount type from the price.

On a business activity are assigned the following functions:

Forming of commercial policy. Understand determination of the current and perspective tasks of a business activity and methods of their decision as commercial policy. This policy depends on economy of the goods market, on the purposes of trade enterprise, on its real opportunities.

The commercial policy allows to strengthen influence in the market, to reveal and fill new market niches, to expand the commodity nomenclature, to raise competitiveness and level of trade servicing.

An integrated approach to commercial work. It assumes that all links of trade enterprise shall work as the single harmonious mechanism, i.e. there shall be close connection of the entity with suppliers, purchase and sale of goods shall be performed depending on demand.

Management of purchase and sale of goods. Commercial services establish partner business connections with suppliers on a commercial basis (commercial transactions, commercial transactions, commodity-money exchange).

Market development of goods. For this purpose reveal motivation of buyers for necessary goods, solvent demand, a ratio between the demand and supply.

Adaptation of commerce to changes of the environment. With market development there is an increasing number of various goods which cause changes of flows of commodities on channels of merchandising. Therefore it is necessary to react to the changing conditions timely.

The cost accounting, connected with a business activity. Commercial success is determined by a ratio between the expenses connected with a business activity, and income gained from it. And it is connected with mutually advantageous transactions, with competence and enterprise of the businessman.

All functions of a business activity conditionally divide into two groups.

Directly bringing the surplus value:

  • sales of goods;
  • rendering additional services;
  • implementation of export-import transactions;
  • maneuvering by commodity resources;
  • professional advertising;
  • carrying out legal and claims activities.

Participating in forming of income:

  • market research and its environments;
  • forming and provision of requests;
  • purchase of goods;
  • forming of a trade assortment;
  • impact on the industry (improvement of quality, expansion of the range);
  • establishment of economic communications;
  • organization and holding fairs;
  • research of additional commodity resources.

Thus, the business activity represents set of the legal, financial and economic and organizational knowledge and actions directed to enhancement of processes of purchase and sale of goods and services for satisfaction of demand and receipt of an expected profit.

Modern businessmen should face a set of problems which can’t be solved without laws of the market, identification of causes and effect relationships in commercial processes, without theoretical and practical knowledge in various areas daily: economy, right, finance, management, marketing, etc.

Methodology of a business activity

Methodology of a business activity

In case of the characteristic of a business activity economic concepts are used: market, requirements, property, resources, price, usefulness, etc. Technological and organizational processes of management of sale are connected with concepts: purchase, sale,  servicing, etc. To generalize the basic commercial processes, in a business activity use concepts: system, organization, structure of the organization, purpose, subjects, objects, etc.

Such basic concepts also constitute structure of a business activity.

In case of a research of problems of commerce these concepts are considered in a complex.

Implementation of a business activity is connected with the organization (Latin — I report a harmonious row, I arrange). There is a set of determinations of the organization from which the concept of the organization as the rational system directed to goal achievement is usually selected.

On the one hand, understand internal orderliness, coordination, interaction between parts as the organization whole, caused by its structure. On the other hand is a set of processes and actions which lead to education and enhancement of interrelation between parts of whole.

The organization of a business activity of trade enterprise includes certain regularities of functioning and interaction of its elements (parts).

Basic elements of the organization are:

  • the people entering into this organization;
  • the purposes for which achievement there is this organization;
  • the management setting the capacity of the organization for achievement of the purposes facing it in motion.

Therefore the concept of the organization is closely connected with a concept of management.

The organization is systematized, conscious consolidation of the actions of the people pursuing achievement of particular purposes and acting on the basis of certain rules and procedures.

Thus, the concept of the organization is applicable both to objects, and to subjects of a business activity.

In the analysis of a business activity all phenomena are considered in movement, development and change, positive and negative sides are researched, internal contradictions are studied, causes and effect relationships come to light and analyzed.

The set of methods of a research, applied when studying this discipline, represents methodology which vkpyuchat both general scientific, and special methods of knowledge (research).

For a research of a business activity are used:

  • general scientific methods — a method of dialectic materialism, the system analysis, mathematical methods, methods of modeling, observation, an experiment, analogy, group, comparison, etc. These methods are based on historical development of the phenomena and processes, on a research of concepts and transition from simple to more difficult with allocation of a tendency of their continuous enhancement and development;
  • special methods — questionnaires of buyers, expert evaluations, panel polls, economic-mathematical calculations in case of determination of efficiency of a business activity, etc.