Lesson 1 of 28
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Role of Business

Overview

  • The nature of a business
    • Producing goods and services
    • Profit, employment, incomes, choice, innovation, entrepreneurship and risk, wealth and quality of life

Key Terms & Concepts

Business: An organisation that produces/sells goods and/or services in order to make a profit.

  • Wealth: Successful business creates wealth for all stakeholders.
    • Business redistributes wealth to government, employees and shareholders
  • Income: The amount of money a person receives for their labour (wage/salary)
  • Profit: What remains once all expenses are deducted from sales
    • Key to a business’ long-term survival
  • Employment: The number of employees depends on the size and nature of the product(s)/service(s)
  • Goods and Services: Tangible items that can be seen or touched, and activities or care provided, respectively
  • Innovation: The development of new products or the improvement to existing products
  • Choice: The act of selecting among alternatives
    • Businesses will compete to offer the best price and the highest quality
    • Those that are successful gain significant financial return
  • Quality of Life: The overall wellbeing of an individual (a combination of material and immaterial benefits)
    • Producing a range of products which satisfy our wants results in a higher quality of life