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The etymology of
"business" relates to the state of being busy either as an individual
or society as a whole, doing commercially viable and profitable work. The term
"business" has at least three usages, depending on the scope — the
singular usage to mean a particular organization; the generalized usage to
refer to a particular market sector, "the music business" and
compound forms such as agribusiness; and the broadest meaning, which
encompasses all activity by the community of suppliers of goods and services.
However, the exact definition of business, like much else in the philosophy of
business, is a matter of debate and complexity of meanings.
Business is a word
which is commonly used in many different languages. But exactly what does it
mean? The concepts and activities of business have increased in modern times.
Traditionally, business simply meant exchange or trade for things people wanted
or needed. Today it has a more technical definition. One definition of business
is the production, distribution, and sale of goods and services for a profit.
To examine this definition, we will look at its various parts.
is a creation of services or the changing of materials into products. One
example is the conversion of iron ore into metal car parts. Next these products
need to be moved from the factory to the marketplace. This is known as
distribution. A car might be moved from a factory in Detroit
to a car dealership in Miami.
Third is the sale of goods and services. Sale
is the exchange of a product or service for money. A car is sold to someone in
exchange for money. Goods are products which people either need or want; for
example, car can be classified as goods. Services, on the other hand, are
activities which a person or group performs for another person or organization.
For instance, an auto mechanic performs a service when he repairs a car. A
doctor also performs a service by taking care of people when they are sick.
Business, then, is
a combination of all these activities: production, distribution, and sale.
However, there is one other important factor. This factor is the creation of
profit or economic surplus. A major goal in the functioning of an American
business company is making a profit. Profit is the money that remains after all
the expenses are paid. Creating an economic surplus or profit is, therefore, a
primary goal of business activity.