Unformatted text preview: 8/29/2019 Putting It Together: Role of Business Putting It Together: Role of Business
Synthesis
Now that you have been exposed to some of the terms and de nitions we use in business, have you
been able to nd something that doesn’t have a link back to business? Let’s go back to where we
started.
If you were in your living room, then everything in your
surroundings was most likely manufactured by a business
for your use—chairs, television, computer, pens, pencils.
What if you had been at the co ee shop? Well, this one
is easy because you were doing your studying in a business,
surrounded by people working for a business who were
serving the customers of the business.
The last possibility we suggested was the beach. Well, the ocean doesn’t have anything to do with
business, does it? Remember in the module we talked about nonpro t organizations as business
entities. Aren’t there organizations that use their pro ts to support clean water and preservation of the
coastline? What about the lifeguards at the beach who are paid by a business to keep swimmers
safe? Where did the children get the shovels and pails they were using to play in the sand?
By this time you should begin to see that even though you may not think of business as you go about
your daily routine, it is always there, like the air we breathe. Throughout this text you will learn about
how businesses operate, why they engage in the activities they do, and numerous other components
that go into this thing we call “business.”
In the meantime, don’t stop looking for something that quali es as “non-business related”—you might
nd something after all. Summary
This module covered the role of business. Below is a summary of the topics covered in this module. What Is Business?
1/3 8/29/2019 Putting It Together: Role of Business We de ned business as any kind of organization or action that creates goods or provides services.
While this is usually undertaken with making a pro t as the main goal, though this isn’t always the
case. For-Pro t vs. Non-Pro t
For-pro t businesses focus on earning a pro t. They are concerned with the company’s well-being
and success above all else. Non-pro t organizations, on the other hand, are more goal-oriented. They
are concerned with communities or members. Instead of focusing on earning money, NPOs focus on
their customers and their needs (e.g., credit unions, sports clubs, human service programs, aid and
development programs). Factors of Production
In order to produce services or goods, a business needs four resources: land (or other natural
resources), labor, capital, and entrepreneurship. Natural resources are de ned as resources found in
nature unaltered by man; these include oil, wind, trees, and so on. Labor can be divided into two
general categories: physical labor and mental labor. Both kinds of work are necessary for success.
Capital includes things created by human beings that are used to make other goods: power tools,
computers, and even art (which can be used to create museums or art shows). Money is not
considered to be capital. An entrepreneur is the person who starts the company or business—without
him or her, the business would not exist to begin with. Functional Areas
Businesses are made up of functional areas—di erent activities that need to be done to maintain the
business. These include management, operations, marketing, accounting, and nance. Management
ensures employees are on task and that each employee is being leveraged in the way that makes the
business most e cient. Operations watches over production and ensures quality of product.
Marketing brings in customers, both by making the business look appealing to customer and by
taking customer feedback and improving the business. Accounting keeps track of the money
currently coming in and the money currently being spent. Finance plans for future expenses and
income. Stakeholders
There are two kinds of stakeholders (individuals who have a vested interest in a company): internal
stakeholder and external stakeholders. Internal stakeholders include employees, managers, and
owners. These individuals are vested in the company because they directly depend on it for income.
2/3 8/29/2019 Putting It Together: Role of Business External stakeholders include customers, shareholders, creditors, suppliers, and others. These people
have a legitimate interest in the company for various reasons and can all be a ected by actions the
business takes. 3/3 ...
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