Role of business in society
A business is an organisation that makes, buys or sells goods or provides a service.
All businesses aim to satisfy customer needs and wants.
Needs and wants
Needs are the basic requirements that are essential for survival such as food, water, clothing, shelter and warmth.
Wants are things we would like to have but don’t need to survive. These include luxuries such as mobile phones, expensive jewellery or holidays.
For a business to survive, it must satisfy the needs and wants of the customer. Businesses can satisfy needs and wants by providing goods and services to the customer.
What are goods and services?
Goods are tangible products meaning you can see and touch them.
Durable goods can last a long period of time, normally involving repeated use. Examples include:
- washing machine
- TV
- car
Non-durable goods are normally consumed when used. Examples include:
- food
- toothpaste
- fuel
Services are when someone does something for you. Services are intangible products, meaning they cannot be held or touched. Examples include:
- train journey
- haircut
- cinema screening
For a business to be able to provide goods and services it will need to combine a variety of resources. These are known as the factors of production.
