DIFFERENCE BETWEEN CHAMBER OF COMMERCE AND TRADE ASSOCIATION

How will you distinguish between chambers of commerce and trade associations?

SOUMYA SINGH

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A trade association is a voluntary association of persons belonging to the same trade or industry. It may be organised on the basis of regions also. It is a non-profit body established to protect and promote the interests of a particular trade or industry.

Indian Jute Mills Association, Indian Sugar Mills Association, All India Food grain Dealers' Association, Bombay Mill Owners' Association are examples of trade associations.

Both Chambers of commerce and trade associations are voluntary and non-profit organisations of businessmen. They perform by and large similar functions. But there are following differences between them.

1. Scope:

A trade association consists of business firms operating in the same industry, or trade. On the other hand, a chamber of commerce includes business firms operating in different fields of business activity. Thus, it is wider in scope than a trade association.

2. Nature of member-firms:

The various firms which constitute a trade association are essentially competitors. But all member-firms in a chamber of commerce are not competitors.

3. Representation:

A chamber of commerce represents the interests of business community in general while a trade association seeks to protect and promote the interests of a particular trade or industry.

4. Structure:

A trade association contains business firms operating in different regions as it is organised on trade basis. A chamber of commerce is often organised on regional basis, and, therefore, its members are located in a particular region or country.

5. Name:

A trade association is often known by the trade or industry it represents, e.g., Indian Sugar Mills Associations, etc. On the other hand, the name of a chamber of commerce is decided after the name of a region or community, e.g., Bengal Chamber of Commerce, Marwari Chamber of Commerce, etc.

CHAMBER OF COMMERCE

A chamber of commerce (or board of trade) is a form of business network, for example, a local organization of businesses whose goal is to further the interests of businesses. Business owners in towns and cities form these local societies to advocate on behalf of the business community. Local businesses are members, and they elect a board of directors or executive council to set policy for the chamber. The board or council then hires a President, CEO or Executive Director, plus staffing appropriate to size, to run the organization.

The first chamber of commerce was founded in 1599 in Marseille, France. Another official chamber of commerce would follow 65 years later, probably in Bruges, then part of the Spanish Netherlands

ROLE OF CHAMBERS OF COMMERCE

Chambers of commerce plays a vital role by rendering useful services to businessmen and the Government. Services to businessmen

Chambers of commerce serves as friends, philosophers and guides to the business commu­nity. Businessmen derive the following advantages from chambers of commerce:

(i) Businessmen get valuable information free of cost.

(ii) They can expand their business activities with the help of suggestions and advice from chambers of commerce.

(iii) Chambers of commerce creates markets for the products of their members by organising fairs and exhibitions.

(iv) Businessmen get a common forum at which they can discuss problems and exchange views on matters of common interest.

(v) Differences and disputes among businessmen can be solved amicably and economically with the help of chambers of commerce.

(vi) Members take advantage of educational and training facilities offered by chambers of commerce.

(vii) Chambers of commerce undertakes research on behalf of their members.

(viii) Chambers of commerce fosters a sense of cooperation's among businessmen.

Chambers of Commerce in India

In India, chambers of commerce have been organised at both regional and national levels.

1. Regional Chambers of Commerce

(i) Indian Chamber of Commerce (Kolkata)

(ii) Bengal Chamber of Commerce (Kolkata)

(iii) Indian Merchants Chamber (Mumbai)

(iv) Mawari Chamber of Commerce (Mumbai)

(v) Madras Chamber of Commerce (Chennai)

(vi) Punjab, Haryana and Delhi Chamber of Commerce (New Delhi).

2. National Chambers of Commerce

(i) Federation of Indian Chambers of Commerce and Industry (FICCI)

(ii) Confederation of Indian Industry (CII)

(iii) Associated Chambers of Commerce and Industry (ASSOCHAM)

(iv) All India Organisations of Employers (AIOE)

FICCI:

The Federation of Indian Chambers of Commerce and Industry (FICCI) were estab­lished in 1926 in New Delhi as an apex central body of businessmen in India. It consists of both individual and corporate members.

Its membership consists of 50 chambers of commerce and trade associations, 200 overseas members, and 1500 associate members. Its management is vested in an executive committee. FICCI acts as a representative body of Indian business

optimum size of firm and factors affecting the size of firm

OPTIMUM FIRM SIZE

A business unit may be launched in a small scale and then expanded gradually. With the increase in the scale of operation, it can enjoy various economies in regard to prosecution, marketing, financing and management.

But it must not be presumed that these economies will be available in increasing measure with every growth n the scale of operations. The law of diminishing return applies after a certain level of production. In other words, a point will come beyond which further expansion of business operations may lead to inefficiency. This point indicated the optimum size of firm.

To optimum size denotes the size of a firm at which there is maximum efficiency in operations. Efficiency will be reduced whenever the size is reduced below the optimum level or expanded beyond the optimum level. The concept of optimum firm was developed by E.A.G. Robinson.  By the optimum firm, we must mean that firm which in existing conditions of technique and organizing ability has the lowest average cost of production per unit when all those cost which must be covered in the long-run are included.

FACTORS AFFACTING THE SIZE OF FIRM

OR

FACTORS FOR DETERMINING THE OPTIMUM SIZE OF A BUSINESS UNIt

The size of an average firm varies from country to country. We have, on the one hand, giant concerns in the United States and Germany and tiny businesses in small Indian towns. Why is it so? There are a number of factors which determine the size of a business unit in a country.

Ø  Types of Industry: The nature of industry determines the size of the firm. The size of the firm will be large in those industries in which the product or the productive machinery is physically very large as in steel-making and ship-building and in those in which final product is highly complex as in the manufacture of typewriters, watches, cash registers, etc. The size of firms in an industry will be small where the product is both small and simple as in the case of manufacture of cutlery, weaving of standard cloths or the baking of bread.

Ø  Nature of Product: When a complex and large product is to be manufactured, the size of the firm will be higher. Size of a firm producing less standard and more fashionable products will be smaller.

Ø  Size of Market: It the size of market is sufficiently large, large firm may come into being to ha the benefit to large scale production and distribution.

Ø  Capital. The needs of capital and the ability of the management to raise capital also influence the size of a firm. If the management of a company can raise capital conveniently, there will be a tendency towards large scale operations. 

Ø  Attitude of Promoters and Management. The ability and attitude of the promoters and the management also influence the size of a business firm. If they are intelligent, foresighted, enterprising and ambitious, the size of the firm will tend to grow as the time passes.

Ø  Entrepreneurial Skill. The most important factor of comes is the skill, initiative and resourcefulness of the entrepreneur. Everything depends on his judgment and ability. An entrepreneur of outstanding ability will be able to procure as much finance as he may need, hire the requisite labor force and build up a huge business. But an entrepreneur of moderate ability will run business on a moderate scale and a man of limited entrepreneurial skill will be content with a small business.

Ø  Managerial Ability

For running the routine part of the business, managers are appointed. If a firm is lucky enough to have a manager of great ability, the size of the firm will grow to considerable dimensions. On the other hand, a mediocre manager will have a small-sized firm to manage.

Ø  Availability of Labour

Another factor on which the size of the firm depends is the availability of labour of requisite skill. After all, what can the entrepreneur even with large capital do, if the labour to man the business is not available? What is required is efficient and skilled labour.

Ø  Number of Employees

The number of employees employed by any business determines its size. This is done by comparing the wages paid to employees with other businesses. This factor is used where firms produce similar goods. If you use it in comparing firms that are producing differentiated products, then you end up with false results.

Ø  Power Used

The amount of power used determines the size of business. Don’t rely on this factor as it is inaccurate because the amount of power used by any business maybe more or less.

Ø  Raw Materials Used

The annual consumption of raw materials of any firm determines its size. It used only on those firms that are producing similar products. 

Ø  Volume of the Output

This factor is used on those firms that are producing homogeneous goods.

Ø  Total Assets

The total assets of any business determine its size. The value of all assets (current and fixed) is taken as a means of measure. It is used in both similar and differentiated firms.

Professor Robinson has grouped the factors determining the optimum size of a business unit into five classes. They are: 1. Technical factors, 2. Financial factors, 3. Managerial factors, 4. Risk factors and 5. Marketing factors:

Each class of factors decides the optimum size of unit. The optimum depending upon the group of factors is known as the optimum technical unit, optimum financial unit, optimum managerial unit, together may give the optimum size.

1. Optimum technical unit:

Technical factors are concerned with methods of production. They may include specialization, division of labor, mechanization and the like. Production methods become economical when these steps are taken. Technical forces decide the minimum and the maximum limits to size.

2. Optimum Financial unit:

Generally, the size of a unit depends upon the volume or size of capital and, in turn, the volume of capital depends on its size. Larger the size of a unit, larger the volume of capital required and easier to obtain capital because large volume of production and operational efficiency insure adequate return on capital. The optimum financial unit is governed by the volume of funds.

3. Optimum managerial unit:

Management expenses may vary with size. If the size is small it may be relatively costly to manage its affairs whereas with the growth of size there is an economy in such expenses. The growth of size may bring in complexities of organization and management. But in a larger unit the advantages of specialization and division of labor may be obtained and managerial efficiency improved.

4. Optimum survival unit:

The production of a commodity depends upon its demand in the market. Since demand may fluctuate from time to time, there is risk and uncertainty before the firm. Therefore, conditions of demand may influence the size of a unit because the risk or uncertainty is influenced by such conditions.

The changes in demand may be permanent cyclical and seasonal. Changes in demand due to the development of a substitute or a change in the taste and habits of the consumers may be taken as a permanent change.

The firm should reorganize its activities to adjust to the changed conditions. Cyclical variations are those which are concerned with depressions and booms. The firm has to meet both these situations and make adjustments. Seasonal variations are governed by change situations the firm has to adjust its size to keep it optimum in a particular situation, in seasons and the subsequent change in the demand for a commodity. In all these, however, changes in the size of a unit are difficult to make.

5. Optimum marketing unit:

Marketing optimum has to seek a balance between large scale marketing operations with a view to having some economies in selling and buying and better quality of commodities and services by limiting the size to a manageable limit. Demand estimates are to be prepared to decide the size of marketing operations.

difference between public and private sector

Difference Between Public Sector and Private Sector

Definition of Public Sector

The sector, which is engaged in the activities of providing government goods and services to the general public is Public Sector. The enterprises, agencies and bodies are fully owned, controlled and run by the Government whether it is central government, statement government or a local  government.

There are two types of public sector organizations, i.e. either they are fully financed by the Government through the revenues they raise by collecting taxes, duties, fees, etc. or the government holds more than 51% of the total share capital of the company which comes under various ministries. The enterprises are generally established with service motive. It is the largest sector, which works for the upliftment of the people by providing the following services to the people:

•        Generation of employment opportunities

•        Postal services

•        Providing education and health facilities at low cost

•        Providing security

•        Railway service

Definition of Private Sector

The segment of a national economy that is owned, controlled and managed by private individuals or enterprises is known as Private Sector. The private sector enterprises are divided on the basis of sizes like small & medium enterprises and large enterprises which are either privately or publicly traded organizations. They can be created in two ways, i.e. either by the formation of a new enterprise or by the privatization of any Public Sector Enterprise.

Business entities of the private sector are generally established with the sole objective of making profit and building brand reputation. They provide quality services to the community to win the trust and goodwill from people in order to survive in the long run and compete with the enemies. These enterprises also have to follow the government law and order. It is the largest sector in terms of employees. Although in private sector performance is the basic criterion for job stability, i.e. if you perform well you will get promoted and if you won’t, you will be perished. The major services provided by the Private sector are as under:

•        Quality education

•        Telecommunication services

•        IT services

•        Courier Services

•        Infrastructure development

BASIS OF COMPARISON	PUBLIC SECTOR	PRIVATE SECTOR
Meaning	The section of a nation's economy, which is under the control of government, whether it is central, state or local, is known as the Public Sector.	The section of a nation's economy, which owned and controlled by private individuals or companies is known as Private Sector.
Basic objective	To serve the citizens of the country.	Earning Profit
Raises money from	Public Revenue like tax, duty, penalty etc.	Issuing shares and debentures or by taking loan
Areas	Police, Army, Mining, Health, Manufacturing, Electricity, Education, Transport, Telecommunication, Agriculture, Banking, Insurance, etc.	Finance, Information Technology, Mining, Transport, Education, Telecommunication, Manufacturing, Banking, Construction, Pharmaceuticals etc.
Benefits of working	Job security, Retirement benefits, Allowances, Perquisites etc.	Good salary package, Competitive environment, Incentives etc.
Basis of Promotion	Seniority	Merit
Job Stability	Yes	No

Key Differences Between Public Sector and Private Sector

The following are the major differences between public sector and private sector:

1.       Public Sector is a part of the country’s economy where the control and maintenance is in the hands of Government. If we talk about Private Sector, it is owned and managed by the private individuals and corporations.

2.      The aim of the public sector is to serve people, but private sector enterprises are established with profit motive.

3.      In the public sector, government has full control over the organizations. Conversely, Private Sector companies, enjoys less government interference.

4.      The employees of the public sector has the security of the job along with that they are given the benefits of allowances, perquisites and retirement like gratuity, pension, superannuation fund etc which are absent in the case of the private sector.

5.       In the private sector working environment is quite competitive which is missing in the public sector because they are not established to meet commercial objectives.

In general Public Sector uses Seniority for promoting employees, however, merit cum seniority is also taken as a base for promoting employees. Unlike Private Sector, where performance is everything and so merit is taken as a parameter to promote them

Conclusion

Nowadays, Private Sector is progressing faster because promotes quality not quantity, it encourages talent. Public Sector is full of reservations like reservations for minority section, females, person with disability and many more, here nobody sees talent, it is completely ignored and because of this, competent youths remain unemployed. Although, public sector enterprises give so many facilities to their employees, which makes them satisfied that their job is secured, due to which, all the people are running after it like it is a marathon. However in the Private Sector, your job is never secured, even if you give years to it, you can be fired anytime just because of a single mistake.

Again in the private sector, where performance is king, work load is much, but it keeps you alive and alert, this is missing in the public sector due to which the work sometimes becomes monotonous which creates boredom. One thing is really good in Private Sector i.e. it is corruption free. In Public Sector you have to pay lots of money to the government officers even for a simple work, for no reason. It is an unending debate, both are good at their  places, if the drawbacks are removed, they will surely prove good for the economy.

Difference between Business ans Profession

What are the difference between business and profession?

The followings are some of the differences between profession and business.

Business:

• It involves an activity relating to purchase and sale of goods with an objective of earning profit.
• It does not necessitate specialized study of knowledge.
• The primary objective of the business is maximization of profit.
• It involves huge amount of capital.
• The entire process of business involves risks.

Profession:

• It involves rendering of specialized services for a reward called a fee.
• Profession necessitates specialized study, training and knowledge.
• It involves element of service in exchange of an economic reward.
• It involves less amount of capital.
• Though risk is there in profession, it is negligible.

Importance of business organisations

Importance/significance of Business Organizations are as follows:

1. Benefits in specialization:

In organization every individual is assigned a part of total work and not the whole task. In other words the goal is divided into various activities and assigned to the person who is specialized in performing that task/activity, that provide the benefit of specialisation.

2. Role Clarity:

In the organisation the employees are assigned different jobs and the managers clearly define the jobs. The jobs are defined on the written document called job description which clearly spells out what exactly has to be done in every job. This description of job brings clarity in the minds of employees.

3. Clarity in working relationship:

it is clearly defined that what all and how much power and authority is enjoyed by different individuals or managers. Each manager knows very clearly to whom he can give order and from whom he has to receive the order. The superior-subordinate relation is clearly defined in organising.

4. Optimum utilization of resources:

there are very few chances of duplication of work or over-lapping of work because the jobs are assigned to different individuals by clearly defining the job in job description document. So, there are no chances that the same work is performed by two or more individuals.

5. Co-ordination and effective administration:

the similar and related jobs are grouped under one department which leads to unification of efforts and harmony in work. The organizing function establishes relation between different departments keeping in mind the co-ordination among different departments. By bringing clarity in working relationship administrative efficiency improver.

6. Adoption to change:

Whenever the changes take place in the business environment then with the help of organising function these changes can be adopted systematically because organising function creates different departments and group related activities under each department.

With this, changes can be adopted only in that area which may be affected by these changes and changes can be easily communicated to whole organisation through departments. Organisational structures can be suitably modified according to changes.

7. Expansion and Growth:

With optimum utilization of resources and proper division of work and departmentation, companies can easily meet the challenges and can expand their activities in a planned manner.

8. Development of personnel:

Delegation of authority is an important part of organizing. By delegating the routine the managers can concentrate to develop new methods and ways of performing job. It gives them time to innovate new technologies and areas for growth of the companies. Delegation not only reduces the work load of managers but it also helps them to use and realise their full potential for more creative work.

9. Others

1. Production of Goods :-
Business organization is very useful for the production process of goods and services. It increases the efficiency of various sections.

2. Reduces the Cost :-
Business organization principles are used to minimize the cost of production. So the profit of the business increases.

3. Distribution :-
Marketing and distribution problem is also being solved by the business organization.

4. Common Link :-
It provides a common link between various of the business activities. So effective cooperation among the various factors increases the profit of the enterprise.

5. Saves the Time :-
Due to business organization we can save our time which is more precious in the present age.

6. Minimum Wastage :-
Business organization reduces the wastage of material and other expenditure. So rate of profit increases.

7. Secretariat Function :-
Business organization teaches us the principles of office organization. It tells us the best way of performing the secretarial functions.

8. Finance Management :-
Business organization also guides the businessman that how he should meet his financial needs and expand the business.

9. Transportation Use :-
It guides the businessman that which type of transport he should utilize to increase the sale and profit of his product.

10. Makes the Businessman Efficient :- 
Business organization has enabled the businessman to conduct the business affairs efficiently. It also provides the solution of many problems.

11. Fixes Responsibility :-
It fixes the responsibility of ever individual in a different manner. It also introduces the scheme or internal check with works automatically.

12. Solve the Market Problems :-
Business organization solves the problems of buying, selling storage and grading.

13. Technical Development :-
It also very helpful for improving the technology in the country. Newmethods and innovations are used in the production process.

14. Decision Making :-
Decision making is very important factor for the success of business. The business organization is very useful in making the decisions in time.

15. Provides Skill :-
Business organization provides the skilled people like salesman to satisfy the customers.

16. Supply according the Demand :-
It guides the producer that he should produce the goods according the demand of the market. Facts about market are collected and demand is produced accordingly.

Conclusion

the business organisation bring the improvement and efficiency in performing activity/task and ultimately it helps to achieve the goal of the organisation and bring smooth running of the business.