Unitate de învăţare Nr.

FUNCTIONS OF COMMERCE

Cuprins

Obiectivele Unităţii de învăţare Nr. 9

9.1 Professional Practice: The Functions and Importance of Commerce
9.2 Language Focus: The Gerund
9.3 Vocabulary: The Stock Market
Lucrare de verificare Unitate de învăţare Nr. 9
Răspunsuri şi comentarii la testele de autoevaluare
Bibliografie Unitate de învăţare Nr. 9

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OBIECTIVELE Unităţii de învăţare Nr. 9
Principalele obiective ale Unităţii de învăţare Nr. 9 sunt:

 Să îşi însuşească conceptele şi terminologia specifică domeniului

 Să selecţioneze informaţiile esenţiale din aceste texte ;
 Să opereze cu noţiuni precum: comerţ, comerciant, comerţ cu ridicata,
comerţ cu amănuntul, servicii comerciale;
 Să rezolve exercitiile de înţelegere ale textului utilizând cuvinte şi
structuri din text.
 Să își însușească noțiunile de gramatică studiate

9.1 Professional Practice: The Functions and Importance of Commerce

The term commerce refers to the process of buying and

Definition of selling-wholesale; retail, import, export, enter port trade
Commerce and all those activities which facilitate or assist in such
buying and selling such as storing, grading, packaging,
financing, transporting, insuring, communicating,
warehousing, etc. The main functions of commerce is to remove the hindrance of
persons through trade; place through transportation, insurance and packaging;
time through warehousing and storage; and knowledge through salesmanship,
advertising, etc., arising in connection with the distribution of goods and services
until they reach the consumers.
Commerce The growth of commerce, industry and trade bring about the growth of agencies
generates of trade such as banking, transport, warehousing, advertising, etc. These
employment agencies need people to look after their functioning. Increase in production
opportunities results in increasing demand, which further results in boosting employment
opportunities. Thus development of commerce generates more and more
employment opportunities for millions of people in a country.

Human wants are never ending. They can be classified as 'Basic wants' and
'Secondary wants'. Commerce has made distribution and movement of goods
Commerce possible from one part of the world to the other. Today we can buy anything
tries to satisfy produced anywhere in the world. This has in turn enabled man to satisfy his
increasing innumerable wants and thereby promoting social welfare.
human wants
Production is meant for ultimate consumption. Commerce makes possible to link
producers and consumers through retailers and wholesalers and also through the
aids to trade. Consumers get information about different goods through
Commerce advertisements and salesmanship. The manufacturers are regularly informed
links about the likes and dislikes of the consumers through marketing research. Thus
commerce creates contact between the centers of production and consumption

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producers and and links them.
consumers
The exchange of goods is a complex process beset with several types of
hindrances. Commerce removes these hindrances. According to James
Stephenson, "Commerce embraces all those activities which help to break the
barriers between producers and consumers”.
It is the sum total of those processes which are engaged in the removal of
hindrances of persons (trade), place (transport, packing and insurance), and time
(warehousing) in the exchange (banking and finance) of commodities."
Thus the main function of commerce is to remove the following hindrances:

1. Hindrance of person:
This hindrance refers to the lack of contact between producers and consumers.
The producer is faced with the problem of finding the buyers who need the
goods he has produced and who are able and willing to buy such goods. The
consumer does not know the source of supply of goods which would satisfy his
needs at prices he can afford. Commerce removes this hindrance by means of
trade.
Trade provides an organized market where the buyers and sellers can contact
each other. It saves both producers and consumers from the time-consuming and
expensive exercise of locating each other.

2. Hindrance of place:
A major problem faced by producers is to send their goods to distant places
without loss through theft, pilferage, damage, etc. Commerce solves this problem
by means of transport, packing and insurance. Modern means of transport carry
goods too far-of places quickly and safely. Packing of goods helps to preserve
their quality in transit and storage. With the help of packing, businessman can
preserve the quality of goods. Thus, transportation and packing are useful
commercial activities.

3. Hindrance of time:
In modern industry goods are produced on a large-scale in anticipation of
demand. There is usually a time gap between the production and consumption of
goods. Therefore, it becomes necessary to store the goods until they are sold.
This problem is solved by warehousing or storage. Warehouses provide suitable
storage facilities to protect the goods from fire, rain, pests, etc. Warehousing is,
thus, an integral part of commerce.

4. Hindrance of exchange:
Buying and selling of goods between persons living in different places requires a
common medium of payment. Money serves as common medium of payment.
However, convenient, and safe means of payment are required to settle the
transaction. Banks help to remove this obstacle in the process of exchange by
making and collecting payments on behalf of their clients.
Now businessmen can send money from one place to another in the form of

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 bank-draft, cheque, etc., without facing any risk. Banks also provide credit in the
form of overdrafts, letter of credit, cash credit, discounting of bills, etc.

5. Hindrance of Risk:
During transportation and storage, there are several possibilities of loss or
damage of goods. There also exist risks of theft, burglary deterioration, fire, etc.
These risks cause anxiety among businessmen and discourage them from
investing money in business. Insurance helps to remove the hindrance of risks by
compensating businessmen for financial loss. It plays a vital role in the
development of trade and commerce.

6. Hindrance of knowledge:
Often a producer or merchant finds it difficult to sell his goods and services
because consumers are not aware of their benefits and uses. Advertising and sale
promotion remove this hindrance by bringing goods and services to the
knowledge of consumers. Advertising also persuades people to buy the goods
and services.
Thus, commerce plays an important role in the distribution of goods. It makes
available to the users goods produced in different parts of a country as well as
from other countries. People are able to buy goods produced anywhere in the
world. The producers are relieved of the problem of marketing the goods and can
concentrate on increasing production.

Commercial activities break the barrier between producers and consumers.

Commerce ensures a free and smooth flow of goods from producers to
consumers. Commerce provides the advantages of specialization. It helps to
better satisfy human wants by collecting and distributing goods. Commerce
Basic aim of provides the necessary link between the producers and consumers of goods. It
commerce has brought countries close to one another and the world has become one big
market. Large scale production is impossible without modern commerce.
Commerce has contributed significantly towards the economic development of
society and the quality of life of people.

The basic aim of commerce is to ensure the supply of right goods at the right
time at the right place and to right persons. Commerce brings goods to the hands
of ultimate consumer.

Test de autoevaluare 9.1 – Scrieţi răspunsul în spaţiul liber din chenar.

Correct the mistakes using the words given:

corporate culture, corporateladder, corporate headquarters, corporate logo,
corporate image, corporate profits

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 1. Before we employ people, we like to put them in job situation to see how
they do the work and fit into the corporate ladder.
2. The company has built a grand corporate logo as a permanent symbol of
its power.
3. Our stylish new corporate culture shows our wish to be seen as a more
international airline.
4. The economy is growing and corporate headquarters are rising.
5. The rules were introduced to protect women working in factories, but
today they make it harder for women to climb the corporate image.

9.2. Language Focus: The Gerund

Gerunds are words that are formed with verbs

Definition but act as nouns. They are very easy to spot,
since every gerund is a verb with ing tacked to
its tail. There are no exceptions to this rule.
The problem here is that present participles also end with the letters ing.
Besides being able to spot gerunds, you should be able to tell the difference
between a gerund and a present participle.

Let’s go back to the definition of a gerund for a moment. Remember that

gerunds are words that are formed with verbs but act as nouns. Present
participles do not act as nouns. Instead, they act as modifiers or complete
progressive verbs.

To find gerunds in sentences, just look for a verb + ing that is used as a
noun. It is that simple !

Examples:

 Reading helps you learn English. subject of sentence

 Her favorite hobby is reading. complement of sentence
 I enjoy reading. object of sentence

It is used:

a) after prepositions and conjunctions (exceptions – except, but)

Usage
1. The teacher got a sore throat from talking too much.
2. Can you sneeze without opening your mouth?
3. She is good at painting.

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b) after the following verbs:
suggest, enjoy, mind, can’t help, keep, finish, spend time (e.g. a week),
postpone, waste time/money, delay, deny, consider, excuse, forgive, avoid,
miss, risk, escape, can’t bear, can’t stand, …

1. I enjoy being with you.

2. Would you mind posting this letter for me ?
3. I can’t help being afraid.

c) after phrasal verbs: (Phrasal verbs are composed of a verb + preposition

or adverb).

1. When will you give up smoking?

2. She always puts off going to the dentist.
3. He kept on asking for money.
d) it can be the subject of a sentence :

1. Fishing is not allowed.

2. Hunting tigers is dangerous.
3. Flying makes me nervous.

e) in compound nouns
In compound nouns using the gerund, it is clear that the meaning is that of a
noun, not of a continuous verb. For example, with the word "swimming
pool" it is a pool for swimming in, it is not a pool that is swimming.
1. I am giving Peter a driving lesson.
2. We have a swimming pool in our back yard.
3. My sister bought some new running shoes.

Test de autoevaluare 9.2 – Scrieţi răspunsul în spaţiul liber din chenar.

Finish the sentences with a suitable gerund and additional words.

1. She is good at …………………….

2. He is crazy about …………...…….
3. I don't like……………………...….
4. They are afraid of …………………
5. You should give up ………….…...
6. Sam dreams of ………………….…
7. He is interested in …………………
8. My uncle is afraid of……………….
9. We insist on ………………………

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9.3. Vocabulary: The Stock Market

In the following conversation between two work colleagues, Peter explains to

Juan how the stock market works and the meaning of some different words
and terms used when talking about it.

From the context, try to guess what the meaning of the words/phrases in bold
are. Then do the exercise at the end to check if you are right.

Juan: 'I'm thinking about investing my money in the stock market and buying
some shares. The problem is that I have no idea about it. For example, what's
the difference between stocks and shares?'

Peter :'Basically, they are the same thing. They mean the ownership of part of
a company. In Britain, we normally say shares, but in North America they use
both.'

Juan: 'Can I buy shares for any company in the world on the stock market?'

Peter: 'No, you can only buy stocks and shares on the stock market for public
limited companies (called 'public corporations' in America). These are
generally big companies which allow anybody to buy shares in them. In fact,
only companies which are public limited companies are on the stock market.
The majority of companies in the world are private limited companies
(called 'private corporations' in America), which don't sell their shares on the
stock market.'

Juan: 'So, how do I buy stocks or shares in these public limited companies?
Can I do it myself by calling the companies?'

Peter: 'No, you don't have the permission to buy shares yourself, you have to
get a stockbroker to buy or sell shares for you. A stockbroker is
licenced/registered to trade stocks and shares (which means to buy or sell
stocks and shares) on stock exchanges. So you have to set up an account with
a stockbroker.'

Juan: 'Ok. So what's the difference between a stock exchange and the stock
market?'

Peter: 'The stock market means anywhere where stocks and shares are traded,
but a stock exchange means an actual location/organisation where they are
traded. For example, the actual place/organisation in London where stocks
and shares are traded for some companies is called the London Stock
Exchange. In New York, you have the New York Stock Exchange and the
Nasdaq Stock Exchange. All three stock exchanges are part of the stock

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market.'

Juan: 'So why does New York have two stock exchanges?'

Peter: 'There are actually more in New York. Each stock exchange has
different companies listed on them. So, if you want to buy shares in Google
your stockbroker has to use the Nasdaq Stock Exchange, because that's where
Google is listed and their shares are traded. But if you want to buy shares in
Ford, your stockbroker has to use the New York Stock Exchange, because
that's the stock exchange where Ford is listed.'

Juan: 'More complicated than I thought. I would like get a good return from
the shares, I want to make a lot of money. Do you have any recommendations
on what company's shares I should buy?'

Peter: 'I don't know. You should get advice from a stockbroker or look at how
a company's shares are performing. Check to see if the share value has
increased or decreased. When you own shares in a company you will become
a shareholder which means you are a part owner of the company and can
vote on who manages or directs the company. You will also receive a
dividend on each share you own, which is an extra payment. If the company
is making a profit they normally give some of this profit to their shareholders
as a dividend. So your return with be a combination of the dividend and the
increase or decrease in the share price.'

Juan: 'But can I get a higher return on my money if I put my money in the
bank from the interest than from the dividend in stocks and shares.'

Peter: 'It's safer to put your money in a bank, but you may make more money
with stocks and shares. If you want to see how much money you earn on each
dollar or pound you have invested, you have to look at the yield. For example,
if a banks pays you an interest rate of 2%, you earn 2% on every $1 and this
2% is called the yield. For dividends you have to divide the yearly dividend
per share by the amount you paid for the share. So, if a share cost you $2.50
and the yearly dividend is 15 cents, you divide 15 by 250. So the yield for the
share is 6%. So this shows you would make a higher return on your money
from investing in this company's shares than by putting your money in the
bank.'

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 Test de autoevaluare 9.3 – Scrieţi răspunsul în spaţiul liber din chenar.

Below is a definition/description of each of the words in bold from the above

text. Now choose the word/phrase from the question's selection box which
you believe answers each question. Only use one word/phrase once.

1. The name of a person who has/owns shares in a company, is

………….
2. A type of company where its shares are not sold on the stock market,
are called …………
3. The name for the money that a company pays to its shareholders, is
called the ……………
4. The actual place where the shares of a company are bought and sold, is
called a …………..
5. A different name for 'shares' that is commonly used in America, is
……………
6. A type of company where its shares are sold on the stock market, are
called ………..
7. A verb that means 'to buy' and 'to sell' that is used in the stock market,
is ……………
8. A different way to say 'profit' when talking about investing your
money, is ……………
9. A way to say that a company 'is on' a stock exchange, is
…………………….
10. The name of the person who buys and sells shares for a
client/customer, is …………

Lucrare de verificare Unitate de învăţare Nr. 9

Write briefly on one of the following topics:

1. The main functions of commerce and their inter-related features

1. The function of trade