What is business?

Business is the study of how organisations create value by producing goods or services to meet customer needs. At its core, business involves identifying opportunities, managing resources, and making decisions to achieve objectives such as profit, growth, or social impact. This topic introduces the fundamental purpose of business activity: to combine factors of production (land, labour, capital, enterprise) to satisfy unlimited wants with scarce resources. Understanding 'what is business' is essential because it sets the foundation for all other business concepts, from marketing and finance to operations and strategy.

In the Cambridge OCR A-Level, this topic explores the dynamic nature of business and its role in society. You will examine different types of businesses (sole traders, partnerships, limited companies, social enterprises) and their objectives, which may include profit maximisation, survival, or ethical goals. The topic also covers the external environment—economic, legal, technological, and competitive factors—that shape business decisions. By grasping these basics, you can analyse real-world business behaviour and evaluate how firms respond to change, a skill crucial for exams and future study.

Why does this matter? Business activity drives economic growth, employment, and innovation. As a student, understanding 'what is business' helps you connect theory to practice—whether you're analysing a case study about a start-up or a multinational corporation. This topic also introduces key models like the business cycle and stakeholder mapping, which reappear throughout the A-Level. Mastering it early ensures you have a solid framework for tackling more complex topics like business strategy and corporate finance.