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The Business Environment

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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 and non-profit organizations both play vitals roles in the fluency of the economy’s welfare overall. Behind every economy lies a set of governing rules that work as guidelines to that economy. The United States has its own set of policies that do just that. Currently, there have been some shifts in some of the country’s monetary and fiscal policies that have had a direct impact on the economy. Since, the world is moving toward a more global economic climate in which things are done in other places of the world have a tendency to have an impact on other economies, it is important that we familiarize ourselves with the products and services that are associated with various global markets. We as individuals have a choice in what sectors of business we want to partake in based upon our connection with society. The organizations that we are a part of all have some sort of impact on the economy from a societal standpoint. All of the aforementioned are important pieces to the business environment puzzle, but one must understand the role of business in any economy before they can truly discuss other determining factors.
Kelly and McGowan define business as any activity that provides goods and services in an effort to earn a profit (Kelly & McGowan, 2012). Business raises the standard in which people live all over the world. Without business there wouldn’t be a chance for people to live a better life. Businesses supply the main ingredient for life’s quality. In our economy business is like the key equation that makes everything in life balance. A few components that factor into the business equation to make the economy function are products, services, and jobs. Another way business play its role in the economy is through taxes. To ensure our economy has what it needs the government uses tax money for activities like building roads, and jails and employing their employees. Without businesses people as a whole would have to find everything we need, such as food, clothing, and shelter on our own. There wouldn’t be a Wal-Mart to go purchase household items for example. People would have to find how to put things together themselves in order to survive without business.
There are two different types of businesses. One is in business to make a profit. The other is solely focused on giving to the community and not making a profit. A business that makes a profit gets the financial benefits for its owner and/or shareholders. Nonprofit organizations do make a profit also, but it can only be used for the mission the organization was created on. In cases like foundations the profit can only be given to another non-profit organization. For-profit businesses have to pay a tax on their profit. Nonprofit businesses do not have to pay taxes. If a for-profit organization goes out of business equity could get taken, and the owners and shareholder could receive the profit. For instance, a non-profit called Columbus Area Habitat Humanity builds their profit “through volunteer labor, donations of money, and materials”. “Habitat builds and rehabilitates simple, decent homes alongside their home owner partner families”. Since this is a non-profit organization, the volunteers cannot be paid with donations given. They also cannot keep the money or materials to themselves. Everything given to this organization has to be used to build the houses. If not it must be given to another nonprofit for their gain if it goes out of business.
The economy took a fall around the year 2000. Since then the economy experienced a drop in the stock market, a higher unemployment rate, the housing market lost value, large companies has to lay employees off, and banks no longer lent money as freely. According to Walker and Kaplan (2013) In order for the people to blossom, they have to stay in an interesting position for businesses to compensate competitive wages equal to high and rising living standards. Their research states:
This requires targeted investments by the government, especially in physical and informational infrastructure, education and training, and scientific research. But the bad measurements used by the government are keeping the public in the dark about how needed investments for the future are being crowded out by the government's enormous debt and other obligations. (Walker & Kaplan, 2013)
Due to mandatory spending increasing there isn’t a lot of money available for the government to spend on important assets that confirm our futures competitiveness. It will be harder to move forward in the future do to all the back pay owed from the past. On the other hand the monetary policy “refers to actions that shape the economy by influencing interest rates, and supply of money” (Kelly & McGowan, 2012). Genetski talks about how the key step in a monetary process involves the creation of bank reserves. “Bank reserves are deposits that banks keep at the Federal Reserve. Whenever anyone other than the Fed purchases anything they need to have money to pay for them. The Fed is different. It has the unique ability to pay for its purchases by informing banks that it has increased their deposits (bank reserves) by whatever amount is necessary to pay for its purchases.” (Genetski, 2013) The more bank reserves created the more money banks have to loan and invest. By doing this more money can be supplied to the economy. That causes spending to increase. After a while if an economy can’t produce goods and services as fast as people are spending it will cause an inflation. The Fed’s action showed something totally different than increasing liquidity like they said they would. Tightening the monetary policy only added to the current financial crisis. Furthermore, it is very important that we as a people are familiar with the global market. If a KFC wanted to open in other countries the best strategy would be to start a foreign franchise. Even though franchises have higher risk the positive outlook is it has more control and say so over the business. KFC could research the area they are trying to relocate, see how they meet that specific area’s needs, and figure out whether the food while sale there. They could also look at ways to customize their menu to fit that countries taste. Lastly, social responsibility also plays a big role in business. It the agreement of a business to give back to society. For a business to be socially responsible with its customers it should “provide quality products at a fair price. Ensure that customers are safe and informed. Support consumer choice and consumer dialogue”. (Kelly & McGowan, 2012) Total Systems is a company that: Improve lives and businesses across the world by processing a payment. We make it possible for millions of people to move money between the world's buyers and sellers. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare and more, we make it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience. (About Us, 2013).
When it comes to money people don’t want to go through a hassle. It is TSYS’s job to make sure that their customers are taken care of. Social responsibility can impact a customer in good and in bad ways. A good way a customer could be impacted is for example, someone commits fraud on a customer’s credit card. They call the 1-800 number on their card to report this incident. The call center makes notes of what happen and then the chargeback specialist goes in and places a credit on the card holder’s account. The customer could also be impacted in a bad way if the TSYS is not careful when transferring the card holder money correctly. Sometimes card holder’s card get blocked and transferred more than once to prevent a person from committing fraud of the customer’s card again. If you’re not careful you could send debits and credits to the wrong accounts. That can lead to an upset policy holder all from the one simple mistake. In conclusion, business is the heart of the economy. It determines the standard of living for an economy. There are two types of business that make the economy flow, profit and nonprofit. Monetary and Fiscal policies shape the health of the economy, and can also help sustain economic expansion. Foreign franchising is a good way to reach global markets when expanding businesses. And last companies carefully consider the priorities of all stakeholders. Without social responsibility companies would not keep loyalty.

References
About TSYS. (n.d.). TSYS. Retrieved May 6, 2013, from http://www.tsys.com/About/index.cfm
Kaplan, D. W. (n.d.). Current fiscal policy harms U.S. competitiveness - Term Sheet. Fortune Finance: Hedge Funds, Markets, Mergers & Acquisitions, Private Equity, Venture Capital, Wall Street, Washington . Retrieved May 5, 2013, from http://finance.fortune.cnn.com/2013/04/11/fiscal-policy-competitiveness/.
Kelly, M., & McGowen, J. (2012). BUSN 4(Student ed.). Mason, OH: South-Western
Cengage Learning.
The Contribution of Monetary & Fiscal Policies to the Current Financial Crisis | Heartland Institute. (n.d.). Home | Heartland Institute. Retrieved May 5, 2013, from http://heartland.org/policy-documents/contribution-monetary-fiscal-policies-current-financial-crisis The Contribution of Monetary & Fiscal Policies to the Current Financial Crisis | Heartland Institute. (n.d.). Home | Heartland Institute. Retrieved May 5, 2013, from http://heartland.org/policy-documents/contribution-monetary-fiscal-policies-current-financial-crisis

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