BUSINESS BASICS

“ALL RIGHT, PROFITS ARE DOWN, BUT LOOK

AT ALL THE THINGS THAT ARE UP.”

1. What is Business?
2. Careers in Business

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3. Looking Down the Road with the Auto Industry
WHAT IS BUSINESS?
Business is word which is commonly used in many different languages, but exactly
what does it mean? The concepts and activities of business have increased in modern
times. Traditionally, business simple 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 profit. To
examine this definition, we will look at its various parts.
First, production is the creation of services or the changing of materials into products.
One example is the conversion of iron ore into metal car parts. Next these products
need to be moved from the factory to the marketplace. This is known as distribution.
A car might be moved from a factory in Detroit to a car dealership in Miami.
Third is the sale of goods and services. Sale is the exchange of a product or service
for money. A car is sold to someone in exchange for money. Goods are products
which people either need or want; for example, cars can be classified as goods.
Services, on the other hand, are activities which a person or group performs for
another person or organization. For instance, an auto mechanic performs service
when he repairs a car. A doctor also performs a service by taking care of people when
they are sick.
Business, then, is a combination of all these activities; production, distribution, and
sale. However, there is one other important factor. This factor is the creation of profit
or economic surplus. 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. Creating an economic surplus or profit is, therefore, a primary goal of business
activity.
A. Answer the following questions about the meaning of business. The
questions which are starred (*) cannot be answered directly from the text.
Space is provided at the end for you to add your own questions.
1. What is one modern definition of business?
2. *How does this modern meaning of business differ from the traditional one?
*What factors have brought about these changes?
3. What does production involve?
4. What example of distribution is given in the reading?*Can you think of
another example?
5. How do goods differ from services?
6. In addition to production, distribution, and sale, what other factor is important
in defining business?

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 7. What is profit?*In general, what do companies do with their profits?
B. Fill in the blanks with noun or verb forms. Use your dictionary if necessary.
NOUN VERB
1. Production _________________
2. ________________ Perform
3. ________________ Examine
4. Conversion _________________
5. ________________ Classify
6. Distribution _________________
7. ________________ Create
8. Sale _________________
9. ________________ Calculate
10. Organization _________________

C. Use the correct noun or verb forms in the sentences. Change the
grammatical form of the words if necessary.
1. sale
a. An annual report includes the ____________________ figures of the
company for the current fiscal year.
b. An auto dealership _____________________ cars, trucks, vans, and
sometimes recreational vehicles.
2. distribute
a. Some companies hold exclusive _____________________ right for
specific products.
b. Factory representatives _____________________ products to wholesalers
and retailers.
3. produce
a. How efficiently a company ________________________ its products will
in large measure determine its success.
b. The ______________________ of high-technology instruments is one of
the most rapidly growing industries in the 1980s.
4. classify
a. Items _______________________ in order to show the relationship
between them.
b. _______________________ means the grouping of items to show the
differences between them.

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D. Classification means the grouping of items to show the relationship between
them. Items that are classified together have something in common; that is
something must apply to all the items in that group or class. Look at the
items below. They may be classified as either goods or services. Classify the
following items as either goods or services.
1. car 11. calculator
2. medical diagnosis 12. employment agency
3. travel agency 13. suit
4. briefcase 14. forklift
5. auto repair 15. office equipment repair
6. financial planning 16. newspaper delivery
7. computer 17. computer programming
8. videotape recorder 18. time clock
9. management consultant 19. law book
10. accounting ledger 20. income tax preparation
GOODS SERVICES

E. Match these parts of the business definition to the following real life
situations.
production of goods sale of goods
distribution of goods sale of services

Examples:
Iron ore is made of into metal car parts ____________________
A car is moved from a factory to a car dealership. ____________________
A salesman sells a car. ____________________
An auto mechanic repairs a car. ____________________

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1. A shipment of grain is transferred from a boat
to a truck. ____________________
2. A chemical plant turns raw materials into fertilizer. ____________________
3. A salesman from a concrete manufacturer
convinces the owner of a building materials
company to buy a shipment of drainage pipe from
his company. ____________________
4. A warehouse ships books to a bookstore. ____________________
5. A computer manufacturer receives silicon chips and
puts them into minicomputer. ____________________
6. A dentist repairs a child’s broken tooth. ____________________
7. A train moves truck parts across the country. ____________________
8. A grocer exchanges groceries for money. ____________________
9. A waitress takes your order for lunch. ____________________
10. a farmer plants vegetables for harvest in the fall. ____________________

F. Below is a list of terms that you will find in the text. As you read “Careers
in Business,” see if you understand each term. Use this as a working list and
add other terms with which you are unfamiliar.

NOUNS VERBS ADJECTIVES OTHERS

career offer suitable consequently
variety specialize in available ______________
field _______________ ________________ ______________
salary _______________ ________________
aptitude
demand
advancement
_______________
_______________

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 CAREERS IN BUSINESS
Business is an increasingly important activity throughout the world today.
Consequently, the opportunities for a business career have grown in variety and
number. There are now five broad fields or areas of business that offer exciting
careers: management, marketing, accounting, finance, and data processing. Within
each of these fields are specific job in which you can specialize. For example, within
the field of marketing you can specialize in market research, advertising, buying,
selling, or distribution. The figure below gives an idea of the general career
opportunities that are available in the various fields of business.

Business Fields and Careers

MANAGEMENT MARKETING ACCOUNTING FINANCE DATA PROCESSING

-general manager -researcher -book keeper -banker -computer operator
-personnel manager -advertiser -private accountant -financial analyst -computer programmer
-production manager -buyer -public accountant -stockbroker -systems analyst
-seller -government accountant
-distributor

In choosing a business career, there are several questions you may want to ask. For
instance, does the work interest you? Are there any areas of business for which you
have an aptitude or special capability? What are the opportunities involved, such as
demand (or need) for the job, salary, and chance for advancement? Answer to these
kinds of questions and careful planning will help in choosing a suitable and
successful career in business.

Answer the following questions about business careers. The questions which are
starred (*) cannot be answered directly from the text. Space is provided at the
end for you to add your own questions.

1. What are five different fields of business?

2. What are some specializations within the field of finance?
3. What are some different types of managerial careers?
4. What field of business is shown in the box on the far right of Figure 1?
5. What are some specializations within this field?
6. In the box which is second from the left, what information is presented?
7. What kinds of questions should you ask in order to choose a suitable and
successful career?
8. The reading states that “business is an increasingly important activity throughout
the world today.” *Does this general statement apply to your own country? *Why
or why not? *What opportunities are there for business careers in your country?
9. *Can you add any more business fields and careers to Figure 1? If you do not
know the name in English, describe the work.

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