The World of Business

The business world is very competitive. It has never been as challenging before
as it is today. Business organizations complete in a much bigger arena where survival
is the ultimate prize. Skills that will win them an edge over competitors and keep
them aware of their environment are crucial.

A business is an activity that is intrinsic to human society: it is an entity that

combines and process economic resources or inputs, such as materials and labor, to
give goods, services, or outputs to clients. Businesses have a multiplicative effect,
since they are part of the complex web of interaction among institutions and people.
Involving major activities in these complex enterprises like purchasing,
manufacturing, marketing, advertising, selling, and accounting. The objective of
most businesses is to earn a profit. Profit is the difference between the amount
earned and the amount spent in buying, operating, or producing something.

Business makes the goods and services we use each day. Business organizations
are entities that are involved in business, which makes the goods and services that
people use each dy. These operate either for profit of not for profit. That also includes
the products and services used by other business as well as those needed by
individual consumers. There are generally three types of business organizations
operated for profit: service, merchandising, and manufacturing businesses. Service
businesses provide services rather than products to customers. Merchandising
businesses sell products they purchase from other businesses to customers.
Manufacturing business change basic inputs into products that are sold to customers.

Businesses play a major role in keeping any economy alive. It is therefore

necessary to ensure the proper and ethical governance of businesses. Business
people, manager and employees, but above all the organizational leaders must
behave in an ethical manner in managing and operating a business. Business ethics
refers to principles about how business and the organizations members should
behave. Otherwise, no one will be willing to invest in or loan money to the business.
Business without ethics threatens the survival of human society and in some cases,
destroy the fiduciary relationships of people. Business from the social and ethical
perspective is for the promotion of the common good, protection of the individual’s
interest, and the preservation of the human society in general. Without again this
ethical consideration, business will be chaotic human activity because there will be
no common understanding and agreement about what is the right and wrong.

Business also supports the well-being of members of society through their other
key functions. At the very least, a good business carefully avoids any actions that
undermine the local or global common good. More positively, these businesses
actively seek ways to serve genuine human needs within their competence and thus
advance the common good. In some cases, they actively promote more effective
regulation on a regional, national, or international level. For example, some
destructive business strategies, including corruption, exploitation of employees, or
destruction of the natural environment, might thereby lower short-term cost for
themselves, while leaving the much long-term cost to future generations of the local
society (Pontifical Council for Justice and Peace, 2012).

Business needs leadership that may affects the moral capability and performance
of organizations. Business leaders influence the scope and character of formal ethics
programs and the integrations of ethics into everyday organizational life. However,
most practicing business leaders in most countries most of the time are not held
accountable for dysfunctional moral, social, and environmental performances.
Business uses a variety of efforts to capitalize on diversity, including recruiting and
selection policies, as well as training and development practices. Business
organizations involves unique responsibilities such as the obligations of an employer
of the fiduciary duties of management to the shareholders that determine what a
person should do.

Milton Friedman (American economist) famously stated that the only

responsibility of business is to increase its profit. On the other hand, William Sauser,
in the Journal of Business Ethics article “Ethics in Business: Answering the Call,”
explained that organizations have four levels of responsibility: (1) Earning a profit;
(2) Legal responsibility; (3) Ethical responsibility; and (4) Discretionary
responsibility. Responsibilities of business beyond profit making have come to be
called Corporate Social Responsibility or CSR. Corporate Social Responsibilities, as
defined by the World Business Council for Sustainable Development (WBCSD), is a
“continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families,
the local community, and society at large.” So, more and more businesses are
embracing Corporate Social Responsibility because of profitability, and also because
more business leaders now believe that being a better corporate citizen is a source
of competitive advantage.

The field of social responsibility of business has grown significantly and today
contains a great theories, approach, and technologies. Business and society, social
issues management, public policy and business stakeholder management, and
corporate accountability in society. Recently, renewed interest in the social
responsibility of businesses and new alternative concepts have surged, including
corporate citizenships and corporate sustainability (Garriga and Melé, 2004).

Business risk is related to the nature of the business’s products and its operating
strategy. Businesses with stable sources of sales and earnings have relatively low
business risk. These business’ products are patronized even during times of
recession. Business risk is also associated with the cost structure of the issuing
business. If the issuing business chooses to occur higher fixed operating costs, then
its business risk increases. Business risk is usually measured by the degree of
operating leverage.
 In this world of business, we must not be calm and just go with the flow of our
business. In order to build and shape our business, we must do our absolute best,
by creating a business that is applicable to your target market. Business that will
continuously make concentrate in the business ethics, especially in terms of
marketing top ensure that the business is well known to the customers. Customers
should be treated with dignity and respect, and you should be aware of the ethical
rules or values and the codes of ethics.
Pontifical Council for Justice and Peace (2012). The Vocation of the Business Leader.
Retrieved from Pontifical Council for Justice and Peace: Accessed on 7 November
2021 http://www.pcgp.it/dati/2012-05/04-999999/Vocation%20ENG2.pdf

Garriga, E. and Domènec M. (2004). “Corporate Social responsibility Theories:

Mapping the Territory”. Journal of Business Ethics, 53: 51-71

Erdener, C. (2011). “Business Ethics as a Field of Teaching, Training, and Research

in Central Asia”. Journal of Business Ethics. 104, 7-18.

Ferrero, I., Hoffman, M., and McNulty, R. (2014). Must Milton Friedman Embrace
Stakeholder Theory?” Business and Society Review, 199(1): 37-59