Business is any activity with the primary objective of earning profits, such as selling goods or providing services.
People’s trust in business is diminishing because many believe those running it are only out for themselves. Even if companies change their culture to stop treating employees as costs to be reduced, that won’t solve all issues.
Definition
Businesses are enterprises that exchange goods or services for profit. Non-profit organizations that strive to advance social causes may also qualify as businesses. Businesses may operate under various structures including sole proprietorship, partnership or incorporation and can range in size from being run from just one person in one industry all the way up to multinational corporations listed on stock exchanges.
At its core, business is built upon consumer satisfaction. To accomplish this goal, businesses should offer quality-rich products at reasonable prices to satisfy consumer demands and remain legal while contributing positively to society as a whole.
Business has many synonyms, including trade, commerce, industry and traffic management – to name just a few. Work implies serious endeavor and requires significant effort; related phrases include get down to business, do one’s own business and mind one’s own business; all highlighting the significance of businesses to our economy and society.
Functions
Business functions are the processes enabling an organization to produce products and services. Their role is essential to its success and expansion.
Business processes involve specific tasks performed to achieve a particular goal, while functions refer to groups of activities necessary to produce certain goods or services. A business process may have multiple-to-many relationships with functions.
Marketing seeks to identify customer needs and desires, while production translates them into tangible products or services. Human resources needs to provide employees with adequate training and resources in order to fulfill their responsibilities effectively.
Accounting involves recording inflows and outflows of money as well as financial reporting. While small businesses might only require one main function for accounting purposes, larger enterprises might require several. Either way, each function plays an integral part of success for their respective business.
Environment
Business operates within an intricate ecosystem of external factors that influences its operations, from laws, regulations and other policies that regulate it to culture, traditions, customs and values of its surrounding society. Furthermore, this environment presents both opportunities and threats that could interfere with achieving its goals; an increase in taxes could make products too expensive and reduce sales; technology changes could render existing ones obsolete; or competition from rival companies could restrict profits.
The business environment can be divided into two distinct elements: macro-environment and micro-environment. The former refers to all of the forces that affect businesses generally, including economic policy, social conditions and technological trends; while micro-environments involve specific forces such as investors, customers or competitors that directly affect operations. Business leaders must possess an in-depth knowledge of both environments for strategic decision-making that will allow their businesses to thrive in their markets.
Stakeholders
Stakeholder relationships are professional connections formed between businesses and those who have an impactful interest in its activities and decisions, such as employees, shareholders, customers and suppliers. Aiming to build and keep strong ties with these stakeholders is integral to business success – this requires fair treatment of stakeholders as well as listening closely to feedback or suggestions they offer if any arise.
External stakeholders refers to individuals or institutions outside a business who exert indirect influence over it – for instance, local town governments that establish carbon emissions limits could be considered external stakeholders.
Step one in managing stakeholder relationships for any business is identifying its stakeholders. Once identified, understanding each stakeholder’s level of power and interest will help you decide how much time and energy to dedicate towards nurturing it further. Those with high levels of influence but less interest need regular updates while those with low levels of both influence and interest may only need monitoring – not necessarily nurturing.
