Free Essay

Business Environment

In: Business and Management

Submitted By sumagul
Words 1822
Pages 8
A report on

“Business Environment”

Date:___________________

Submit to:________________

Table of Contents

TASK 2: Nature of the Operating Business Environment………………………………..…3
Introduction………………………………………………………………………………….3
1.1 Explain how economic systems attempt to allocate resources effectively………………3 1.2 Assess the impact of fiscal and monetary policy on “Lloyds Banking Group, UK”, and their activities………………………………………………………………………..5 1.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a “Lloyds Banking Group, UK”....................................................................................7

References…………………………………………………………………………………….9

TASK 2: Nature of the Operating Business Environment
Introduction:
The study discusses different types of economic systems and assesses how these economic system attempts to allocate resources efficaciously, explains the UK government policies (namely monetary, fiscal, social, and competitive policies) and assess the effect of all the above-mentioned policies on a “Lloyds Banking Group, UK”, UK based organization. The paper exposits market structure types (namely, perfect competition, monopoly, monopolistic competition, and other market structures. Finally, the paper describes the ways market structures define the output and pricing strategies of the companies.

1.1 Explain how economic systems attempt to allocate resources effectively
Economic systems are a set of institutions for assigning resources and making possibility to satisfy human wants. Resource allocation is the assignment of resources to particular tasks to deduce the basic economic choices, which are what to produce, how to produce, and for whom to produce for. Resources may be awarded by markets, by planning or mix systems. In a market economy, goods and resources are assigned according to the choice of individual producers and consumers. In a Planning economy, goods and resources are assigned according to the central directions of a government agency. Economy system is to allocate economy, command economy, mixed economy. A market economy constructs on private businesses and market tool. In market economy is spread, flexible and embrace to change. Supply and demand are to influence on determining command economy. A mixed economy is to make an effect to a mixed economy system. Lastly, the economy is slow and not upgrade because of lacking competition, achievement requires to change, to change from command to market economy. Government direct the market economy and mixed economy. The collective instrument is to reject the breach of an economy. The role of government is broadening the economy to reject lacking in production. The economy is restricted thus government needs to opportunity cost. Land and resources are to devastate because of controlling policy. Capital is to be inducted by governments’ capital (Thomas Moranian, Donald, 2012).
There are different economic systems track by the government. These economic systems are usually introduced to allocate the resources more efficiently that are shown in the following;
Command or planned economy:
In a command or planned economic system, government administer the whole economy allocating the scarce resources like soil, capital, labour etc. Here, the planning body or the government has the intense information and can take more desirable decisions for the resource allocation but this economic system mainly cannot allocate the resources efficiently. This is because the planning body does not have the full knowledge or ability to decide how much should be produced. In such kind of economic system, there is always scarcity or surplus of the inputs where a company like Lloyds Bank faces difficulties to operate the business activities properly (Edgar, 1992).
Free enterprise economic system:
In the independent enterprise economic system, all the organizations can operate the business activities with little government involvement. Here, the government has very little number of companies in the market and rules and regulations are adaptable to operate the business activities. For this reasons, there works a strongly favorable competition in the market that leads a strong efficient resource allotment. As the government does not get involved in the market organization like Lloyds bank can behave in a manner what they really want considering the demand of the market (John and James,1992).
Mixed Economic System:
A mixed economic system is like the independent enterprise economic system, but here the government has a little bit involvement with different policies like monetary and fiscal policies. The mixed economic system is shown in the following figure; Figure: Mixed economic system
Here, though the private sector has the flexibility to operate the business activities freely government makes some rule and policies to make the market stable. This economic system can expeditiously allocate the resources as there remains both the independent trade and some limitation through which the market players can operate effectively. So, in its economic system resources are efficiently allocated with small wastage. In this economic system, private companies can execute their own policies managing the government policies and regulations (Johnand James, 1992).
1.2 Assess the impact of fiscal and monetary policy on “Lloyds Banking Group, UK”, and their activities
The monetary policy sets by regulating the funds rate. It affects short-term and long-term rates, including credit-card rates and loans. Governments describe fiscal policy sets by taxation, law and regulation for strength to the environment. Fiscal and monetary policy affects organizations directly and indirectly though competitive factors and management performance are important factors. Businesses go over cycles of development, decline and regaining (Robin Sharma, Hornby W, 2001). Monetary and fiscal policies affect the timing and size of the cycles. The economy develops, customer expenditure increases, increases interest rates to inflation. Works shut down, employment losses increase and business sales decrease. Government spending is to recharge the economy. The business cycle continues with a new development level. Impact of the fiscal and monetary policy on the business organizations and their activities are given below Fiscal policy involves government taxation, spending and policies. Lower taxes more income for customers and more cash for businesses to invest in research, education and new infrastructure business. It is short-term in nature; help to drive business demand by making short-term jobs; help to bring the unemployment levels down over the long term. Over time business activity is to increasing income. It is to bear long-term growth (Grunewald, Richard C, Reidenbach, 2012).Monetary policy involves actions to affect a nation’s money supply; changes in short term interest rates impact long-term interest rates such as loan rates. Low interest charges mean lower interest expense for businesses, higher income for customers, controls inflation and higher business profits. High interest rates impact for businesses higher interest expenses, lower sales to customers and lower profits. Interest rate changes can impact customer expenditure (Kim Et Al.Bobo, 2009)
Government makes different monetary and fiscal policies to control the economy and the business organizations. These policies are taken by the government bodies considering theeconomic positions that also have a god impact on the business activities of a company that are shown below;
Changes in the interest rate: When government changes the interest rate through the monetary policy then it has an impact on the business activities. If interest rates rise then Lloyds bank will face difficulties on financing as the cost of capital will increase while the customers will reduce their consumption level that will reduce the sales volume of Lloyds bank. On the other hand, If Interest rate reduces then Lloyds bank will be able to get more financing at lower cost. This will help Lloyds bank operate the business activities.
Changes in the reserve requirements: if monetary policy changes the reserve requirement then it will also have an impact on the overall business activities. High reserve requirement will push the interest rate high that will influence the consumers to deposit more rather than consumption. So Lloyds bank has to change the business activities as its sales volume will reduce (Stoudmann, et al., 2006).
Changes in the exchange rates: If exchange rate changes then it will also affect the activities of Lloyds bank. If pound appreciates then the business sector of Lloyds bank that is operating in other countries will face problems while home country sales will increase more value for Lloyds bank.
Changes in the tax rate: If government changes the tax rate through the fiscal policy then it will affect the business activities from different perspective (Edgar, 1992). If tax rate is reduced then Lloyds bank will be benefited and company may increase the quality of the products without considering the changes in the price. Or Lloydsbank can increase more expenses on the advertisement or other sector as reduction in the tax rate has made the company more profitable.
Changes in the government spending: If government increases the government spending indifferent sector than a business organization will face reduction in the sales volume. On the other hand, reduction in the government spending will increase the demand for the private sector so is it for Lloyds bank.
1.3 Evaluate the impact of competition policy and other regulatory mechanisms on the activities of a “Lloyds Banking Group, UK”.
Competition puts businesses under constant pressure to offer the best possible range of goods at the best possible prices, because if they don't, consumers have the choice to buy elsewhere. In free market, business should be a competitive game with consumers as the beneficiaries. Competition policy is to make businesses compete. It inspires business effectiveness for customers and helps reduce costs and develop quality. Impact of competitive policy and regulatory mechanisms of Lloyds bank in the following Low price is to gain a high market share; in a competitive business, price are down; competition is inspires businesses to improve their quality of products and services to attract more consumers and enlarge market share; in a competitive business, businesses make their products that offer the balance between price and quality to customers; to provide and produce better products, businesses need to innovative in their product models, plan, manufacture procedures, servicesetc.; to hold their better competitors in global markets (Samuelson P Economics, 2001). Economic regulation and strategy is to examining the impact on business performance and contribute both to developed economic performance and to poverty decreases. Developing a technique for evaluating the impact on regulation which can process of regulatory policy is to making and contributes to better regulatory policy. To develop the role of regulation in improving economic performance and poverty improvement; to contribute better regulation policy making over the spreading of research (Dawes B International Business, 2005).

References * Nordhaus, D., 2009, Organizational management, 3rd Ed. New Work: McGraw-hill international publication. * Burnes, B (2009) Managing Change: a Strategic Approach to Organisational Dynamics, 5th edition, Harlow: Financial Times/Prentice Hall. * French, WL, and Bell, CH (2005) Organization development and transformation: managing effective change, 6th edition, Boston:McGraw/Hill. * Scaner, D., et al., 2009, Introduction to business, 9th Ed. London: McGraw-hill international publication * Slack N et al., 2000.Operations Management. Pitman : UK * Daniels, J., Radebaugh, L., Sullivan, D. (2007). International Business: environment and operations, 11th edition. Prentice Hall. * Joshi, Rakesh Mohan, (2009). International Business, Oxford University Press. * Baron, Robert A., and Greenberg, Jerald (2008). Behavior in organizations– 9th edition. Pearson Education Inc., New Jersey.

Similar Documents

Premium Essay

Business Environment

...What Is Business Environment? Meaning: - The term Business Environment is composed of two words ‘Business’ and ‘Environment’. In simple terms, the state in which a person remains busy is known as Business. The word Business in its economic sense means human activities like production, extraction or purchase or sales of goods that are performed for earning profits. On the other hand, the word ‘Environment’ refers to the aspects of surroundings. Therefore, Business Environment may be defined as a set of conditions – Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization. Business Environment has two components: 1. Internal Environment 2. External Environment Internal Environment: It includes 5 Ms i.e. man, material, money, machinery and management, usually within the control of business. Business can make changes in these factors according to the change in the functioning of enterprise. External Environment: Those factors which are beyond the control of business enterprise are included in external environment. These factors are: Government and Legal factors, Geo-Physical Factors, Political Factors, Socio-Cultural Factors, Demo-Graphical factors etc. It is of two Types: 1. Micro/Operating Environment 2. Macro/General Environment Micro/Operating Environment: The environment which is close to business and affects its capacity to work is known as Micro or Operating Environment. It consists of Suppliers...

Words: 2497 - Pages: 10

Free Essay

Business Environment Analysis

...Business Environment Analysis Background Environmental analysis is a systematic process that starts from identification of environmental factors, assessing their nature and impact, auditing them to find their impact to the business, and making various profiles for positioning. A common process of environmental analysis or scanning is discussed in the following section. Environmental Analysis Process A business manager should be able to analyze the environment to grasp opportunities or face the threats. Organizations need to build strength and repair their weakness available in the business environment. Therefore, this process consists not only a single steps but a process of various steps. Environmental analysis comprises scanning, monitoring, analyzing, and forecasting the business situation. Scanning is to get the relevant information from the information overload. It is to focus on the most relevant information. Monitoring is to check the nature of the environmental factors. Analyzing requires data collection and use of different required tools and techniques. Forecasting is to find the future possibilities based on the past results and present scenario. Environmental analysis process is not static but a dynamic process. It may differ depending on the situation. However, a general process with few common steps can be identified as the process of environmental analysis these are a) Monitoring or identifying environmental factors, b) Scanning and selecting...

Words: 1523 - Pages: 7

Premium Essay

Business Environment

...Unit Title: The Business Environment Guided Learning Hours: 160 Level: Level 5 Number of Credits: 18 Learning Outcome 1 The learner will: Understand the significance of the environment on business activity. Assessment Criteria The learner can: Indicative Content 1.1 Explain the features of business activity. 1.1.1 Explain the business organisation as a transformation process. 1.1.2 Describe the different ways in which a business may structure its activities. 1.2 Discuss the complex interactions that operate between a business and its environment. 1.2.1 Discuss the complexity, volatility and uniqueness of an organisation's environment. 1.2.2 Explain the influence of shareholders on the internal environment of an organisation. 1.2.3 Outline the nature of the external environment (PEST). 1.3 Explain the need for change and its management within an individual business. 1.3.1 Discuss the need to monitor changes in the external environment. 1.3.2 Discuss the implications of environmental change for a business, its stakeholders and society. 1.3.3 Explain reasons for resistance to change by firms, managers and employees. 1.3.4 Describe ways in which resistance to change may be overcome. Learning Outcome 2 The learner will: Understand the structure and organisation of business. Assessment Criteria The learner can: Indicative Content 2.1 Discuss the impact of industrial and legal structure and size on organisational behaviour. 2.1.1 Classify...

Words: 1141 - Pages: 5

Free Essay

Business Environment

...Contents 1. Introduction 2 2. Objectives 2 3. Business Environment 2 3.1. Demographic environment 2 3.2. Economic environment 2 3.3. Geographical and ecological environment 3 3.4. Legal environment 3 3.5. Technological environment 3 3.6. Social environment 3 3.7. Educational and cultural environment 3 3.8. Political environment 3 4. About Mahindra & Mahindra 4 5. Task 1. 5 6. Task 2. 6 6.1. Market Penetration 6 6.2. Market Development 7 6.3. Product development 7 7. Conclusion 7 8. Recommendation 8 9. References 8 1. Introduction The term business is understood and explained in different ways by different people. For some, business is an activity, for some it is a method of transacting, for sonic others, it is a method of money making and some people argue that business is an organized activity to achieve certain predetermined goals and objectives. Based on all these meaning of justness, we may define business as gainful activity through which various elements of society conduct exchanges of the desirable things. 2. Objectives  To understand what the business environment is and why this is important for a company  Management student to understand its fundamental concept on business activity  To develop a right perspective about business environment 3. Business Environment Business involves activities, which links an organization with outside world. Within an organization, a business is governed by the behavior of its employees, management...

Words: 2139 - Pages: 9

Premium Essay

Business Environment

...qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwer...

Words: 4002 - Pages: 17

Free Essay

Business Environment

...The Business Environment Many new businesses get started with the best intentions in mind, yet they fail to change with the fast moving business environment which causes them to not be in business very long. This paper examines the business environment and its impact on the economy. First, this paper describes the role of business in the economy. It compares and contrasts the roles of for-profit and non-profit organizations in the economy and discusses the impact of current fiscal and monetary policies on the economy. Also, it outlines a strategy to access global markets. Finally, it discusses the impact of a company’s level of social responsibility on a stakeholder. The Role of Business Businesses are the engine of the economy. Businesses rely on the factors of production, which include four fundamental resources; natural resources, capital, human resources, and entrepreneurship (Kelly & McGowen, 2010). There are five key dimensions that will help determine if the economy will worsen or prosper. These five dimensions include the following environment: technological, competitive, global, social, and economical. For Profit and Non-Profit Organizations Comparison There are many similarities of for profit and non-profit organizations. Both types of organizations provide products or perform services, employ staff, and receive revenue. These organizations also contribute the region’s economic growth and stability (Kelly & McGowen, 2010). Contrast There...

Words: 894 - Pages: 4

Free Essay

Business Environment

...Lela Jones Business Environment Task 1 1.1 Identify the purposes of different types of organisations. A business organisation is a collection of people, collaborating in a coordinated, structured and managed way to meet shared aims and goals. Organisations will come in all shapes and sizes, but will all have a common factor of goal orientation. “A system that coordinates people, jobs and technology and management practices to achieve a goal” Umstot (1998). A business will always be owned by someone whether it’s an individual or hundreds, with different types of ownership and objectives. Although profit may not always be the main objective, as those of charities or government run enterprises, some profit will need to be made for them to continue in business long term. The majority of organisations will aim to make a profit however small or large. There are many types of business organisations, including sole traders, partnerships, public limited companies, private limited companies, franchises and those in the public sector e.g. local authority and N.H.S. Sole Traders This is a business owned by one person, and the most common according to BIS (Department for business innovation and skills statistical release 2013), its estimated 62.6% of UK businesses are sole traders, but as there is no central register for them it is hard to establish exact numbers, a sole trader will employ one or more people, and can easily be set up compared to other types of organisations,...

Words: 4466 - Pages: 18

Premium Essay

Business Environment

... Surname Carty____________________________ Intake one First Name _Clive__________________________ Programme HND Buisness Management_____________________________ Module Code Unit One_________________________ Submission Date19/05/2013 _______________________________________ Module Name_ Individual Assignment ___________________________________________________________________________ Assignment Title Business Environment ..................................................................................................................................................... ................................................................................................................................................................................. NOTE 1 THIS ASSIGNMENT COVER SHEET NEEDS TO BE COMPLETED AND RETURNED WITH YOUR ASSIGNMENT. FAILURE TO SUBMIT A COMPLETED COVER SHEET WILL RESULT IN YOUR WORK NOT BEING GRADED DECLARATION I have read and understood the London School of Business and Finance (LSBF) Regulations and Policies relating to academic misconduct. I declare that: This submission is entirely my own original piece of work. It has not been submitted for a previous assessment in LSBF or any other institution. Wherever published, unpublished, printed, electronic or other information sources have been used as a contribution or component of this work, these are explicitly, clearly...

Words: 1121 - Pages: 5

Free Essay

The Business Environment

...The Business Environment Monica Thompson Prof Marilyn Fitzpatrick BUS 100 May 6, 2013 Author Note This report is written and submitted as an assignment for BUS100 (Intro to Business) class by Professor Marilyn Fitzpatrick in the spring semester of 2013 Abstract Business is any activity that provides goods and services in an effort to earn a profit. This paper will discuss the role business and the different affects business has on society today. The roles of for-profit and nonprofit organizations will be compared and contrasted. This paper examines the impact of the current fiscal and monetary policies on the economy. A selected product or service will have a strategy for accessing global markets outlined. In the world of business, there are certain constants that exist throughout. One the most important factors being the overall environment itself. The term Business Environment is pretty self-explanatory, and means exactly what it sounds like. The Business Environment is simply a set of different conditions and variable that dictates the nature of the current business environment. The role of business becomes an important factor in determining the flow of this current environment. Business, whether it is large or small scale, is the heartbeat of any economy. Companies that primarily focus on profit margins and financial rewards differ from those that business models consist of mission statements usually geared toward promoting the “greater good”. For-profit...

Words: 1818 - Pages: 8

Free Essay

The Business Environment

...The Business Environment James D Perkins Dr. Marcus Crawford Business 100 January 27, 2012 Abstract Businesses are the main provider of jobs in a capitalist economy and the primary reason for economic growth. The definition of business is any activity that provides good and services in an effort to earn a profit. Businesses in the economy drive up the standard of living and overall quality of life for humans. These businesses produce the products we enjoy and in turn create jobs people need. The major difference between profit and nonprofit businesses is the main goal of profit organizations is to generate a profit for the owners and nonprofit is to use their surplus of funds to advance the goals of the organization. Fiscal policy and monetary policy refer to the efforts to shape the health of the economy. Direct investment and foreign outsourcing are the two key components in deciding which direction to expand a business global. U.S. based company Apple boosts huge profits, but has lost touch with the social obligation it has to Americans by sending all jobs overseas. Businesses are the main provider of jobs in a capitalist economy and the primary reason for economic growth. The definition of business is “any activity that provides good and services in an effort to earn a profit” (Kelly 2012). Most everything in the world related to economy is business. Agriculture, manufacturing, retail, health care, and even our government is business related. Let’s...

Words: 1032 - Pages: 5

Free Essay

Business Environment

...The Business Environment I believe businesses have a huge role in today’s economy. The most important role I believe is providing jobs, which is a necessary part that business plays in any and all economies. The economy of the country is dependent upon the employment provided by big and small businesses and production of goods and services that we rely on in our day to day lives. Without businesses, you are unable to have any sort of a free market economy. Businesses also tend to provide the innovations and or an idea that makes the markets grow. Small businesses employ large numbers of people. They are necessary to molding a sense of independence, risk-taking, self-reliance, and personal achievement The comparisons and differences of Non Profit and For-Profit organizations and similar but yet still not the same you have to understand the meaning of profit. In business, profit is a word used to describe earnings. A nonprofit organization has a mission that benefits the community, society, or the world at times. It doesn’t any pay taxes, but it also cannot use its funds for anything other than the mission for which it was formed. Nonprofit organizations can and do make a profit, but it must be used only for the operation of the organization. The strength of a nonprofit is its efficiency in meeting consumer demands at minimal cost. Non-Profits meet these demands through work performed by volunteers, tax deductible contributions by taxpayers and direct government assistance ...

Words: 825 - Pages: 4

Free Essay

The Business Environment

...Assignment 1: The Business Environment Lisa Oliver May 7, 2013 The cornerstone and prosperity of any society depends on business. Through business, companies create resources that enable social development and welfare. Because we have a capitalistic economy, business is the main component of it. Business is in every corner of every sector of the market. Most everything you can possible think of that relates to the economy is business. Retail, services, agriculture, manufacturing, health care, even political campaigning all involves business. Even when civilizations were based on an agricultural type of economy, business transactions occurred. Businesses provide goods and services that our daily lives depend on and also create employment. It is through business that the government is paid taxes from, to make it function. Business helps to develop, produce and supply goods and services to people (customers) who need it. This is done with a view of creating profit. Business helps people to fend for themselves by focusing on producing product or by expertise. Business also helps society to create jobs for customers, distributors and suppliers. It helps to develop new goods and services and to supply goods and services that customers may not produce. For-profit organizations are those organizations established mainly for profit purposes. These organizations are important in the economy for they involve research and development. This leads to better and dynamic efficiency...

Words: 830 - Pages: 4

Premium Essay

The Business Environment

...THE BUSINESS ENVIRONMENT STUDENT TEACHER BUSINESS 100 28 APRIL, 2012 ABSTRACT This paper is going to describe the business environment in the world today explaining the role of business in the economy, for-profit and non-profit organizations, fiscal and monetary policies, accessing the global market, and social responsibility to a stakeholder group. Although there are many different types of businesses in the world today, they all hold the same functions in the economy; to use the factors or production in the best possible way to reach a certain market supplying goods and services to an economy in search of profit. I used the Business 100 book along with credited sources to get information for this paper. My methods for finding information came from chapters one through four in the Business 100 book and searching key words on the internet. I concluded that the role of business in the economy is very important to how an economy progresses or declines. Business does this by operating by fiscal and monetary policy in the country and accessing global markets in search of new outlets worldwide all while pleasing the stakeholders in every category. Inside every economy there are factors that participate in how that economy succeeds or fails. Business is one factor that plays a major role in any economy. Without business there essentially is no economy. Whether it is for profit or non-profit, business can contribute to an economy’s development with the factors of production...

Words: 1630 - Pages: 7

Free Essay

Business Environment

...The Business Environment 1. Describe the role of business in the economy. Have you ever wondered why there are so many businesses in the world? Or why do we need them all? Business is what keeps the economy moving forward. If you think about it the more business there are out in the world the more people that have the opportunity to gain employment. Employment levels influence a range of other standard-of-living metrics, such as disposable income, home foreclosure rates and new small business startups. When business are doing well the economy benefits. For example banks are more willing to lend consumers money. Interests rates are lower some businesses even given back to the community. 2. Compare and contrast the roles of for-profit and nonprofit organizations in the economy. You would think that all business is out to make money. However that is not the case. There is such a thing as non-profit organizations. A business is an organization or economic system where goods and services are exchanged for one another or for money. Non-profit Organizations commonly known as NPO are associations, charities, cooperatives, and other voluntary organizations formed to further cultural, educational, religious, professional, or public service objectives. Their startup funding is provided by their members, trustees, or others who do not expect repayment, and who do not share in the organization's profits or losses which are retained or absorbed. Businesses pay a significant portion...

Words: 809 - Pages: 4

Free Essay

The Business Environment

...The Business Environment Describe the role of business in the economy. A business is any activity that provides goods and services in an effort to earn a profit (Kelly / McGowan). The economy of the country depends upon the employment provided by big and small businesses and produces the goods and provides the services upon which we rely on in our daily lives. Businesses pay taxes to the government and allow the government to function on the tax collected from them. Hence business is the pivotal part of economy. “It is now a widely held view that a new era has dawned in which businesses must adopt a new conception of their mission, purpose and conduct, by endorsing and implementing corporate social responsibility. In The Role of Business in the Modern World, Professor David Henderson argues that now, as in the past, the primary role of business is to act as a vehicle for economic progress. This role depends upon business enterprises operating within the framework of a competitive market economy (David Henderson, “The Role of Business in the modern world, The Enterprise Institute).” Compare and contrast the roles of for profit and nonprofit organizations in the economy. Nonprofit business, like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain (Kelly / McGowan). Nonprofit organizations have to be present in the economy to create services and goods that are...

Words: 659 - Pages: 3