Business Environment Essay

Submitted By diamondsmith09
Words: 1154
Pages: 5

The Business Environment
Introduction to Business 100
2/01/2013

The Business Environment is the role of the business in the economy; for-profit and nonprofit organizations, the impact of current fiscal and monetary policy, the strategy for accessing global markets and the impact of organization’s level of social responsibility on a stakeholder group.
The role of a business in the economy is to provide goods and services in an exertion to earning profit. The profit would be the money the company earns in sales, minus the expenses for the goods and the cost of salaries. Profit possibility provides motivation for entrepreneur to start their own business. Businesses that are successful increase the standard of living for virtually all members of a society.
Nonprofit organizations are business-like establishments that contribute to economic stability and growth; often work hand and hand with business to improve the quality of life in our society. Nonprofit main goal is to use any revenue above and beyond expenses to advance the goal of the organization. While business goals are to make money for its owners. Nonprofit similar to businesses generate revenue and incur goals of the organization, rather than to make money for its owner. Both businesses and nonprofits rely on factors of production: Natural resources, Capital, Human resources, and Entrepreneurship. Natural resources include all inputs that offer value in their natural state, such as land, fresh water, wind, and mineral deposits. Capital includes machines, tools, buildings, information, and technology; that of which a company needs to produce goods and services. Human resources encompass the physical, intellectual, and creative contributions of everyone who works within an economy. Entrepreneurship are people who take the risk of launching and operating their own businesses in response to the profit incentive.
Fiscal policy and monetary policy refer to efforts to shape the health of the economy. Fiscal policy includes government taxation and spending decisions designed to encourage growth and boost employment. Monetary policy refers to decisions made by the Federal Reserve that influence the size of the money supply and the level of interest rates. Both fiscal and monetary policies played a pivotal role in mitigating the impact of the recent financial crisis, establishing a framework for recovery, as well as helping sustain economic expansion.
Companies that want to enter the global markets can do so by developing foreign suppliers, foreign customers, or both. One option to move forward in the global market is to seek foreign suppliers through outsourcing and importing. Another option would be to seek foreign customers through exporting, licensing, franchising, and direct investment. For example: Apples’ foreign outsourcings are China and Taiwan. Apple products such as the iPod and iPad depend on productions from China and Taiwan. China and Taiwan produce the product at dramatically low wage which drive the cost of production down. Apple sale iPod and iPad in many countries at high prices in addition benefit by the low cost of production which give Apple a prosperous revenue. Another option to accessing the global market is by exporting. Exporting is extremely low risk and low cost, but it offers little control over how the business unfolds. Direct investment tends to be high cost and high risk, but it offers more control and greater revenue.
In addition to accessing global markets; the impact of the organization level of social responsibility on a stakeholder group is very important to the success of the business as well. Social responsibility is the obligation of a business to contribute to society. Companies consider the priorities of the stakeholders as they make key decisions. Major stakeholders are groups who have an interest in the company’s actions and performance such as Employees, Customers, Investors and Community. Corporations, who treat their…