UNIT 1

Before reading the text, have a look at the following questions.

1. Have you ever done a business? Why? What is it?
2. Which one do you like, going into business or going to college? Why?
3. I f you prefer to do a business.
a. What business do you want to deal with?
b. What is your goal to do the business?
c. What is the first important thing to start your business?
4. What are your criteria to say that an activity can be classified as a business?

Let’s read!
WHAT IS BUSINESS?
The word “business” is very common in our daily lives. But what does it means exactly?
Traditionally, it simply means exchange or trade for things. This happened thousands of years
ago when people always felt the need to trade what they had an excess of something they did
not have. They did barter trade to satisfy their need. As trading developed, precious metals
such as gold and silver became a medium of exchange to facilitate trading. Archeological
excavation and cave drawings showed that in the ancient cities of Carthage, Babylon, Egypt,
and China, traders sold wool, spices, hides, grains, and primitive products.
In modern time, the concept and the activities of business change. The scope is wider. It
comprises production, distribution, and sale of goods and services for a profit. Production is
the creation of service or the production of making something more valuable. It also means
bringing together materials, machinery and workers to make goods. Production changes the
value of materials by changing their forms. The example of goods production is the
conversion of iron ore into metal car parts, while shipping, air freighting, postal,
telecommunication, utilities, real estate, banking, finance, insurance, hotels, and restaurants
are all the examples of service production.
Distribution refers to the movement of goods and services from the producer to the
consumer. It includes the movement of materials from the suppliers to the beginning of the
production line. It involves the storage and handling of these materials and the finished
goods, packaging, inventory control and transportation to the end users. An efficient
distribution system will minimize the capital tied up in raw materials or unsold finished
goods.
When the producer, finishes the two activities of business production and distribution, the
ultimate test of his success is the volume of sale of the product or service. This sale means the
exchange of the product or service for money. If the sale is weak, the producer is unable to
make a profit and his business will not survive long. Consequently, his business activity does
not contribute to the nation’s economic growth.
Tan Chwee Huat
MANAGEMENT OF BUSINESS
Task 1
Answer the following questions based on the text.
1. What is the traditional meaning of business?
2. How did people thousandss years ago do a business?
3. What was the function of gold or silver thousands of years ago?
4. How did Babylon people do a business?
5. What does “it’ in “What does it means exactly?” in paragraph 1 line 1 refer to?
6. What does “this” in “This happened thousands of years ago when people always felt
the need to trade what they had in excess of something they did not have” in
paragraph 1 line 2 refer to?
7. What is the modern meaning of business?
8. What is the most important characteristic of business that did not exist thousands of
years ago?
9. If someone does a business in banking, what does he produce?
10. What does “it” in “it also means bringing together materials, machinery and workers
to make goods” in paragraph 2 line 3 refer to?
11. What does “their” in “Production changes the value of materials by changing their
forms” in paragraph 2 line 5 refer to?
12. What kind of distribution is for a producer who cannot minimize the capital tied up in
raw materials?
13. What will happen if a producer can sell his service or goods well?
14. What does “it” in “It involves the storage and handling of these materials and the
finished goods, packaging, inventory control and transportation to the end users” in
paragraph 3 line 3 refer to?
15. What is the standart of businessman’s success?