Business

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Business is a term that relates to the transaction of commerce.

The concept of 'business' is one that is broad in modern life and covers a diverse range of activities, usually with a common element related to the transfer of a medium of exchange, including, but not limited to, money.

History

Business and capitalism

Capitalism is a concept that relates to the allocation of resources, or capital.

In a pure capitalist approach decisions about the production of goods and services are ultimately set by demand levels, and the resulting action of the profit motive.

Demand decisions are at the most basic level set by millions of individual consumers making decisions as to the products and services they purchase, and the brands or supplier they prefer to source these goods and services from.

Business under non-capitalist models

Communism

The most prominent examples of business activities being carried out under non-capitalist systems are those examples of economies where business takes place under a centralized system of decision-making, known as communism. Communal decisions were taken assessing impacts upon society as a collective.

This contrasts strongly where demand decisions determine production and are primarily undertaken by the individual.

This supply-led approach to goods and services requires careful research and planning to succeed and in many cases of communist-based business models, this planning could often become out of line with actual consumer demand. Resulting shortages of goods and services could arise.

Over the long term this represents a risk to the system itself, as individual members of the population can become concerned by ongoing shortages of preferred products over time with resulting social discontent becoming a political issue that can affect the very survival of the system itself.

That is largely what occurred in the USSR leading to the dissolution of that system of business there.

Cuba and China remain prominent examples of communist-based economies, although as with business under capitalism, the pure approach has become somewhat modified over time, and even in China, various elements of capitalist business have arisen over time.

Co-operatives

There exists various island cultures in the South Pacific where a co-operative, or "co-op" approach to business is pursued by local communities.

This system shares some elements with communism in that business activities are coordinated with outputs pooled for sale to those outside the system. However co-operatives differ from communism in that business activity and the resulting profits from this business remain largely within the single local community, with resulting profits shared between members of the community.

Business and corporate responsibility

Anti-business backlash

During various periods of history there have been rebellions against what might be perceived as the interests of business.

Most recently this has been happening at various business forums which occur regularly such as World Trade Organization meetings.[1]

During the September 2007 APEC meeting in Sydney, Australia was the subject of unprecedented security, partly to do with reasons associated with fear of terrorism, but also because of concerns about anti-business protests that often occur now at such meetings of business and political leaders.[2]

Other current issues

Business is increasingly being seen as having an important role to play in issues related to climate change on planet Earth.

Issues related to the environmental impacts of production, the energy impacts of product consumption and the residues of waste after consumption are all current environmental topics relating to how companies must plan for the future. This is also becoming a factor in the marketing and brand positioning of many companies as consumers increasingly demand an approach that is cognisant of environmental factors when they choose which products or services to choose.

Etymology

References

  1. Police try to ban WTO protest web pages. October 1, 2002. Mazzocchi, Jo. The World Today - ABC (radio) - transcript. Retrieved: August 15, 2007
  2. Bryant, Nick (9 September 2007). Apec security leaves bitter taste in Sydney. BBC News. Retrieved on 4 October 2013.