Definition of Business
Business is the evolutionary growth of various activities developing a simple to a complex system.
Computer technology is continuously improving so that life today is very different from the past and the developments we see today are unknown to the previous generations.
Today, a simple push button brings conveniences of technology right at our doorstep in the same manner that a mere power breakdown is sufficient to disrupt routinary and business activities.
There is much complexity in business because this area involves the whole range of human wants and needs. There are many managerial functions, procedures, systems, structures, practices, and organizational units in business.
In the first place, all business organizations involved men and deal with men. A business entity as an organization may be simple or highly complex in structure. The operations are subjected to public, consumer acceptance, government regulations and supervision, taxation, and technological change. In the second place, by the nature of their operations, all business enterprises have basic resources which are managed and developed under a money-and-credit economy.
Business primarily aims to satisfy the consumer’s basic and secondary needs. It can be achieved through the use of effective business marketing practices and strategies for reasonable returns to compensate for the businessman’s efforts and risk of loss.
Profit is the main objective of business which distinguishes it from charitable institutions and government agencies. The businessman aims at maximizing his profit so that he can provide for himself and keep his business variable. The profit, however, must be acceptable to every sector, i.e., commensurate his effort and risks, because a good business does not exploit the public. The businessman should be entitled to a reasonable return on investments because, in addition to using his skills and exerting effort, he takes the risk of loss (compared to other individuals who do not venture into enterprise because they are afraid to lose their money should the business fail).
In a broader concept, profit should be maximized to provide a fair share to the workers in the form of just wages and incentives, to the owner or stockholders in the form of dividends, to the management in the form of professional remuneration and profit participation, to the customers and clients in the form of reasonable prices with commensurate quality of goods and services and dependability of supply.
The complexity of today’s business requires a continuing if not lifetime study. Business is the sum total of all the enterprises that play a vital part in the production and marketing of goods and services to ultimate consumers.
In practical and legal sense, business is any activity involved in the production and distribution of goods and services, aimed to meet the economic needs of consumers with an objective of eventually earning profit.