Q.(a) What are the hindrances of Commerce ?

(a) Commerce faces hindrances of place, time, risk, finance, knowledge and person, each removed by an aid to trade. (b) Social responsibility is needed for self-interest/survival, public expectation, a better business environment, avoiding government regulation, and balancing power with responsibility.

This is a Part-IV OR-choice; both alternatives are answered in full.

(a) Hindrances of Commerce

Commerce is the branch of business that brings goods from producers to consumers by removing various obstacles (hindrances). The main hindrances and the aids that remove them are:

1. Hindrance of place — producers and consumers are located far apart. This is removed by transport, which carries goods from the place of production to the place of consumption (creating place utility).
2. Hindrance of time — goods are often produced in advance of, or in a different season from, their consumption. This is removed by warehousing, which stores goods until they are needed (creating time utility).
3. Hindrance of risk — goods in transit and in storage face risks of fire, theft, damage, etc. This is removed by insurance, which compensates for such losses.
4. Hindrance of finance — trade needs money for buying, holding and selling stock. This is removed by banking and financial institutions, which provide credit and finance.
5. Hindrance of knowledge/information — consumers may not know about available goods. This is removed by advertising and salesmanship, which spread information.
6. Hindrance of person — producers and consumers cannot always meet directly. This is removed by trade and middlemen (wholesalers and retailers), who act as a link.

(b) Need for Social Responsibility (any 5)

Social responsibility means the obligation of business to act in ways that benefit society along with earning profit. It is needed because:

1. Self-interest and long-term survival — a business that ignores society loses customer goodwill; serving society ensures its own long-term survival and growth.
2. Fulfilling public expectations — society now expects business to contribute to public welfare, not merely to earn profit. …