Outline the nature of business and its role in society
The nature of a business is to produce and sell products, which can be either goods and/or services that fulfil consumers needs and wants in an attempt to earn a profit. Business plays a vital role in society through it providing both economic and social benefits. These benefits include profit, employment, income, choice, innovation, entrepreneurship, wealth creation, and also the quality of life. Furthermore, business plays a significant role in society through maintaining the wellbeing of communities.
One of the most significant roles of a business is to make a profit. Profit can either be referred to as a return, or a reward that business owners receive for producing and selling products. In order for a business to make a profit the business' sales revenue must be greater than its operating expenses, such as labour, power, machinery, and also raw materials.
The thought of earning a profit encourages society to build a business, although it comes with the risk of making a loss. Therefore, business' role of making a profit greatly impacts the well being of society.
Another important role of a business is to provide the opportunity of employment to society. Through businesses providing employment consumers are able to earn an income, which results in consumers being able to purchase products through the revenue attained. For instance, the SME sector accounts for about 50 per cent of the private sector employment in Australia, which is around 5.3 million citizens. Hence, businesses deliver employment to many individuals allowing individuals to earn an income.
Income is also another role in society that businesses provide. For individuals income is the amount of money received for providing labour. Whereas for the business' income it is the profit the owner/s make. Employees can...