A business is defined by Wikipedia as a commercial organization or individual trader that engages in business, industrial, or other economic activities for profit. Most businesses are either for-profit or non-profit entities that operate for the purpose of meeting a social purpose or furthering a socially responsible mission. Other types of businesses include government organizations and nonprofits.
A business can have any number of different types of activities. One of the most common types of business activity is the production of tangible goods capable of being traded. Some examples of tangible goods produced by a business are: furniture, manufactured goods, automobiles, trucks, agricultural produce, electrical equipment, petroleum, coal, gas, and other fuels. Many businesses engage in marketing and advertising.
In order to conduct business successfully, there are several key points that must be taken into consideration. The key points comprise the philosophy of the organization, its purpose, operational procedures, organizational structure, management policies, business objectives, customers, and competition. These key points are extremely important because without them, an organization is unable to conduct business activities. These key points are also referred to as premises, theories, and concepts. As long as these key points remain intact, an organization will be able to conduct all of its functions and remain profitable.
The key takeaways from business research include: the need for human resources, market research, marketing, research and development, operations, and finance. Human resources involves hiring, training, managing, and properly paying employees; researching the talent and skills of employees; managing the working environment; establishing proper compensation and benefits structures; creating a workable working environment; conducting market research; understanding the customer and their needs; communicating with customers effectively; and developing and implementing effective marketing campaigns. These key points are necessary if an organization wishes to be profitable. On the other hand, market research involves understanding what the public needs and wants. Research and development involve the process of finding new products and services, developing products and services, testing them, and finally presenting them to the public. Operations consists of the day-to-day activities of employees and the management system of the organization.
Other important areas in a business firm involve planning, operation, and finance. These are planning aspects that encompass budgeting, purchasing, selling, and the allocation of resources to meet company requirements. Operation covers the entire workings of the organization, right down to the daily activities of employees. Finance refers to the financial aspects of the organization and includes the financial accounting system, the payment systems, and the allocation of resources among the different departments, offices, and units within an organization.
The concepts and principles of Business Management are not static. There is always a need to update and review these principles and concepts in light of current market needs and market changes. A good example of this is with the changing consumer preferences for buying products. As consumers’ tastes change so do profit margins. A wise firm would adopt flexible and cost effective strategies in order to increase its profit margins as market conditions change. This would be reflected in the firm’s profit and loss account, balance sheet, cash flow statement, and loan and credit statements.