1. What is business ?

Business is a word which is commonly used in many different languages. Traditionally, business simply meant exchange or trade for things people wanted or needed. Today it has a more technical definition. One definition of business is the production, distribution, and sale of goods and services for a profit. To examine this definition we will look at its various parts.

1) Production is the creation of services or the changing of materials into products.

2) Next this products need to be moved from the factory to the marketplace.

3) Third is the sale of goods and services. Sale is the exchange of a product or service for money. Goods are products which people either need or want. Services, on the other hand, are activities which a person or group performs for another person or organization.

Business is a combination of all these activities: production, distribution and sale. A major goal in the functioning of an American business company is making a profit. Profit is the money that remains after all the expenses are paid.

2. Different forms of ownership

A business may be privately owned in three different forms. These forms are: the sole proprietorship, the partnership and the corporation.

The sole proprietorship is the simplest organizational form. There is one owner who makes decisions without consulting anyone. First of all they are services industries, such as beauty shops, different repair shops, restaurants. But they account for a small part of all business receipts/

A partnership is an association of two or more persons to carry on a business for profit. When the owners of the partnership have unlimited liability, they are called general partners. There may be a silent partner – a person who is known to the public as a member of the firm but without authority is management, and a secret partner – a person who takes part in management but who is not known to the public. This form of organization can be useful in international trade if one partner is well-equipped with purchasing and marketing skills and the other with trade documentation and related skills. The advantages of this form are obvious: it can provide a big capital, diversified management, tax benefits from the government.

A business corporation is an institution established for the purpose of making profit. It is operated by individuals. Their shares of ownership are represented by stock certificates. A person who owns a stock certificate is called a stock-holder. The advantages of this form are the following:

1) the ability to attract financial resources;

2) the possibility to invest the capital in plants, equipment and research;

3) the possibility to offer higher salaries and attract talented managers and specialists.

3. Management

Management plays a vital role in any business or organized activity. Management includes those personnel who have right to make decisions that affect company’s affairs. The four basic functions of management are: Planning, Organizing, directing and controlling.

Planning. Preparation of the plan is always considered as the initial phase of management. It means that someone has to decide: what, how, when and who should be executed. Management organization must find the answers to these questions: Where we are at this time? (Assess strengths and weaknesses of organizations in finance, marketing, manufacturing, human resources).

Where we want to move? (Assess opportunities and threats in the environment: competition, environmental sustainability, supply, what should be the goals and how to achieve them). How are we going to do?

Organizing. Is the process of putting the plan into action.

Directing is guiding and motivating the employees to work efficiently to achieve the goals and objectives of the organization.

Controlling is evaluating how well the company’s objectives are being met.