The United States exists in a capitalistic economy meaning that private enterprise is based on fair competition, economic freedom, and private ownership therefore; business is the heartbeat of our economy. Everything from manufacturing, health care, sales, and agriculture involves business in some way. Businesses provide jobs and produce goods and services that we depend on every day (What Role Does Business Play in Our Economy..?). They pay state and federal taxes to the government on their services provided. The taxes paid by businesses and the people employed by them allow the government to function. Looking at businesses in this way you can clearly see that business is a pivotal part of the economy.
Within our economy two types of business organizations exist: for-profit and nonprofit. A for-profit organization will produce goods or services in the hopes of making revenue off its products. Most organizations you think of today are probably a for-profit establishment. Organizations that are classified as not-for-profit or nonprofit often operate under the guise of the emotional appeal of compassion but can also become major economic engines. They are business like establishments but unlike a for-profit business, their primary goals do not include making monetary profits. For profit businesses operate to generate revenue under the idea to have more profit than loss at the end of the day. Unlike for- profit businesses, nonprofits are organizations that are classified as tax-exempt with the IRS and function as charitable organizations. They operate in order to fund charities or individuals however; the employees of a nonprofit organization are allowed to earn salaries. Nonprofits constitute around 10 percent of all employees in the United States. A national look at nonprofits shows us that human services make up 30%, education makes up 17%, and medical care makes up 13% of all nonprofit organizations within the US. The other 40% of nonprofits are services in areas of agriculture, business leagues, social welfare, and labor. Nonprofits are similar to for-profit businesses in the concept that they both employ people, both offer goods and services, and both take in revenue (Brown, 2012).
Almost every market trend has an underlying economic factor involved. Economic trends are most noticeable within the stock market where we see the biggest impact of how our spending trends affect the price of a company’s stocks. Although the implementation of fiscal policy takes an average of three years to see significant results, the government can have a major impact on the economy. If the government lowers taxes, over time you will see an increase in spending by taxpayers. This money will go into the economy because the taxpayers will have more income left over to spend on goods and services. If however taxes go up, you see a vast decrease in spending by the American taxpayer. Monetary policy is the way the government managed Federal Reserve controls the money in the U.S. economy. If the Federal Reserve changes the cost of money through inflation, it changes the amount of money spent by consumers. Today, we are somewhat seeing a recovery in our economy since the recession of 2009 but unemployment rates are still high (Bernanke, 2010). The government reports to us that unemployment rates are lower however, there are reports to dispute this fact informing us that in the unemployment count, the government does not include people who are not looking for work or who are not on unemployment assistance. Also counted in the government’s unemployment index are people who took a minimum wage job just to “put bread on the table” who prior to 2009 had much higher paying jobs. Business and consumer spending in some areas is up from previous quarters since 2009 but down in areas such as construction and housing. We have recently seen an increase in inflation, which is especially obvious when you look at gasoline prices as well as many industrial and agricultural commodities (Introduction to the Economy, Fiscal and Monetary Policy, 2012).
In order to make a profit in a business operating in our turbulent economy, you need a strong marketing technique. You also must find a way to reach out to those international markets. Sometimes, the key to staying in business is dependent on how well you do market your product. According to the U.S. Department of Commerce, fewer than 10% of American companies are involved in international trade. Take a look at a product called Carlson Fish Oil. Fish oils have gained popularity in the U.S. as being a healing supplement that may treat depression, anxiety, cancer, and macular degeneration. If you wanted to market Carlson Fish Oils overseas, you will first decide on the country in which you are interested in marketing to. You will need to look into factors such as demographics, social and economic interests of the consumers in that country. Is there a need for your product where you intend to sell it? A product will not sell unless there is a need for it. Study the consumer group you wish to target with Carlson Fish Oils. Checking with the Department of Commerce is important so you can learn information about your market. Know the law regarding international trade or you may hire third parties in the form of indirect marketing to ensure you are not violating any international standards. You must devise distribution channels through overseas franchisees, foreign units, and joint ventures or by employing agents to distribute. Creating a web site is a great way to advertise your product and gives consumers a way to learn more about the product before purchasing it. Once your website is created, you need to optimize the web site for search engines to ensure that if a consumer types in the words “fish oil”; Carlson Fish Oils are one of the first to come up. Be sure to set a budget that will meet your global demands. Many countries cater to new or potential businesses so it is important to take advantage those incentives. You must devise effective channels for getting your product to the foreign market. Communicate with the trends and linguistic patterns of your target market. Once you have established the new business overseas, the company will have a positive effect on the economy in the U.S. as well. You will bring jobs and build economic relations with the U.S. and whichever foreign market you choose (How to Expand Your Business Globally).
Corporate social responsibility is a form of a self-regulating mechanism built into an organization that allows it to ensure it has high ethics and operates under the spirit of the law. It is a tool used to ensure that a company’s actions result in a positive impact to its environment, employees, consumers, and stakeholders. A stakeholder may be anyone who is impacted by an organization’s impact. There are stakeholders in for-profit and nonprofit businesses. Take a look at the SPCA, a very well-known nonprofit organization. The SPCA has a huge responsibility to society and its stakeholders because without the SPCA, animal abuse and overpopulation would be rampart. It seeks to campaign for animal welfare, find homes for displaced animals and assist in the investigation of animal cruelty cases. The stakeholders affected by the social responsibilities are the consumers who pay the low fees that just cover the business operating costs for adoption, euthanasia, and spay/neuter services. It is the corporate social responsibility of the SPCA that guides this business to be a service for its stakeholders rather than turn a huge profit (Dublin SPCA Veterinary Clinic, 2012).
It is important to remember that both profit and nonprofit businesses play a major role in the economy. While fiscal and monetary policies within the U.S. may affect the number of operational businesses, it is important that these businesses seek expansion into international markets in order to keep the economy moving. It is equally important that businesses keep their corporate social responsibility in mind to ensure it is operating in an ethical manner. It is in these ways that we keep our businesses thriving which in turn help our economy thrive.
References
What Role Does Business Play in Our Economy..? (n.d.). Retrieved April 15, 2012, from blurtit: http://www.blurtit.com/q7190585.html
Bernanke, C. B. (2010, February 24). Monetary Policy Report to the Congress. Retrieved April 15, 2012, from Board of Governors of the Federal Reserve System: http://www.federalreserve.gov/monetarypolicy/mpr_20100224_part1.htm
Brown, K. L. (2012). Nonprofit Organizations, 2nd edition. (J. M. Nixon, Editor) Retrieved April 15, 2012, from Refrence for Business: Encyclopedia of Business: http://www.referenceforbusiness.com/management/Mar-No/Nonprofit-Organizations.html
Dublin SPCA Veterinary Clinic. (2012). Retrieved April 15, 2012, from Dublin SPCA: http://www.dspca.ie/index.jsp?p=101&n=122&a=0
Introduction to the Economy, Fiscal and Monetary Policy. (2012). Retrieved April 15, 2012, from InvestorGuide.com: http://www.investorguide.com/igu-article-284-basic-economic-concepts-introduction-to-the-economy-fiscal-and-monetary-policy.html
How to Expand Your Business Globally. (n.d.). Retrieved April 15, 2012, from VA-Interactive: http://www.va-interactive.com/inbusiness/editorial/bizdev/ibt/expand_g.html