It seems worthwhile to distinguish "business" from other forms of organization - while there may be some similarities in their nature, their operations, and the ethical environment surrounding them, there are distinct differences that are essential to the consideration of an organization as a business as opposed to an organization of another kind. Specifically, business is to be differentiated from government and nonprofit organizations.
The difference between government (1) and business is in the absence of force. It is accepted, or at least conceded, that government accomplishes its goals by the application of force, in the sense of physical violence. Certain actions are prohibited or required, and the consequence of failing to comply is to do violence upon those who refuse to comply - or, as a mitigating step, to threaten violence before actual recourse to violent action. This is common to goals pertaining to actions as well as goals pertaining to material goods.
It's also worth noting that the application of physical force is characteristic of government, but the absence of physical force is a quality, but not a distinguishing characteristic, of business. Nonprofit organizations also seek to accomplish their goals without recourse to violence.
The difference between business and nonprofit organizations would seem to be the generation of profit (a non-profit being, by its very name, and organization that does not generate profit). However, this is not entirely accurate. Many nonprofits sell merchandise, and even those who do not engage in fundraising sales generate earnings from donations that exceed the value of the benefits they provide, by more than enough to cover overhead expenses. Therefore it can't be accurately said that nonprofit organizations do not make a profit at all.
The chief difference is in the way in which the profits of a business or a nonprofit are dispersed. The top-line or "gross" profit of a business or nonprofit organization may be reinvested in the organization or held in reserve. But the bottom-line or "net" profit of a business is redistributed to its owners, whereas a nonprofit organization seeks to use all net profit to accomplish the goals of the organization. While it may happen that in a given fiscal year or quarter, a nonprofit organization has generated a net profit, this amount is consumed by the organization in the long run, rather than being dispersed to owners.
Admittedly, there are instances in which the profit of a nonprofit organization is dispersed to the owners of the nonprofit in the form of benefits - a youth group holds a fundraising event to generate cash that pays for a benefit to the members of the group (such as a vacation trip for members of the organization) - so it may be argued that this is not a legitimate nonprofit, or a legitimate use of funds for the purpose of the nonprofit, but this seems like a red herring.
Insofar as differentiating a business from a nonprofit is concerned, the distinguishing characteristic of business seems to be the generation of a profit that will be returned to the owners of the business as a monetary payment.
I expect that the details will bear further consideration, and that there may be a number of "exceptional" cases, but my sense is that the essence of this distinction is correct.
- I realize that any mention of "government" tends to draw fire. My intention is not to open that can of worms, but merely differentiate government from business. Comments along those lines - particularly in suggesting a more accurate way to distinguish the two - will be accepted. Comments on politics in general will not be posted here. There are more appropriate venues for political discussions.
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