What is Concept of Business

What is the Concept of Business The term business is used in different senses? In a functional sense, it is used to refer to the function or activities of an organization or individual. Sometimes it is used to refer to the enterprise or unit rendering the business. The term is also used in a very broad sense to embrace the whole business system.

Traditionally the term business referred to commercial activities aimed at making a profit or to organizations formed to make a profit. Indeed in the past economic theory made a fundamental assumption that profit maximization was the basic objective of every firm. The modern outlook is different. For many organizations profit maximization in the short run, not the primary objective. For them, profit is only secondary. There are many organizations both private and public. Which do not aim at a profit from their business? In short, the definition of a business as a commercial activity to make a profit or an organization formed to make a profit is a narrow one. Yet to a layman business still means industry and commerce.

The old concept of business

The old concept of business, condemning it to commerce and private profit, has undergone a radical change. Today, business is regarded as a social institution forming an integral part of the social system.

   

  The modern concept of business

 The modern concept of business is thus a very broad one. Business is viewed as a subsystem of the total social system. In our modern view of society is an ecological one. Ecology is concerned with the mutual relations of human populations or system with their environment. It is necessary to take this broad view because the influence and involvement of business are extensive. Business cannot isolate itself from the rest of society. Today the whole society is a business’s environment.