Look around. Business activity surrounds us. It is everywhere, starting each morning with the delivery of the morning newspapers, and with generation and distribution of the electricity we use to heat water for breakfast tea. Business per se is however quite difficult to exactly categorize it probably concerns all activities of trade (buying and selling), profit (making one, or existing not-for-profit), provision of service (whether governmental, charitable, religious or other) and many others.

Definition of Business Occupation; concern; trade. Pertaining to traffic; trade.

Castle English Dictionary.

Business has only two basic functions marketing and innovation.

Peter Drucker.

Here, we take the broadest possible view of the term, and encourage readers to think of business activity as it concerns their own undertakings, or organizations known to them.

Organizations have inputs (from our given example, newspapers, coal or gas, public donations), some process or activity adding value (manufacturing, delivery, conversion), and finally an output (the goods or service, and its waste). The common feature of all organizations is the transformation of inputs to outputs. This is summarized in Figure 1.2.

Figure 1.2: The basic system for transformation of inputs to outputs

Simply put, organizations of all types require land, labour and capital resources classically known as the factors of production by economists. Specifically, organizations require talented people with great ideas, a source of financial support for the enterprise, suitable buildings/accommodation for the process or activity, a supply of materials, committed...