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Business Activity

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All firms operate in four sectors of the economy that have different purposes. Businesses are public or private—public meaning governmental and private meaning ownership by sole proprietorship, partnership, corporation, or by limited liability. For a business to satisfy customers and provide a positive level of return, inputs and outputs are essential. Inputs are the available resources used to produce the product the business is attempting to distribute. Outputs are goods or services that are being supplied to other businesses or domestic customers. Depending on the structure of a workforce within a business, there are strategic (necessary choices with significant consequences) and tactical (low-level) decisions or adjustments that are vital to the business’s existence. Departments within a company include human resources, marketing, accounting and finance, and operational management. The reason for any business activity is to achieve maximization of profit—excluding nonprofit organizations or non-government organizations.