The Business Environment
Intro to Business
November 4, 2012
The Business Environment 2
The role of business in the economy is to drive up the standard of living for people worldwide and contribute to a higher quality of life. Businesses are providing jobs for people who are in need of work, so they can provide for their families. Also, it’s a tool for businesses to invest in the communities they service. Some Businesses are growth engines of the most successful economy in the community. For Example, a small business owner name James Spearman, he owns a tax office in Chicago, IL. He hired people in the community and invested in the community where his business is located. Mrs. Spearman wanted to give back to the community, where his business is located. He decided to open up a non-for - profit organization called Because I Care Inc. across the street from his tax office. His non-for- profit consist of a FREE mentoring and tutoring program for children in the community. Because I Care Inc. constantly raise money and get parents involved in their children education and free trip to get the children outside the community.
The meaning of a non-for-profit organization is an organization that uses surplus revenues to achieve its goals rather than to distribute them as profit or dividends. The United States defer to the IRS designation conferred under United States Internal Revenue Code Section 501c, when the IRS deems an organization eligible. While non- for- profit organization is permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans non-for-profit having controlled of board members. Many organization have paid staff including management, directors, CEO are unpaid volunteers and even executives who work with or without compensation(occasionally nominal) Where there is a token fee, in generality it is used to meet legal requirements for establishing a contract between the executives and the organization. Also, they are considered to be given stipends from time-to-time. Designation as a non-for-profit and intent to make money are not related in the United States. This means nothing can be conferred by the declaration. It is unclear whether or not this holds outside of the U.S., however In the United States, such as inference is The Businesses Environments 3
the purpose of the Internal Revenue Code, Section 501c. The extent to which a non – for-profit organization can generate surplus revenues may be concentrated or use of surplus revenues may be restricted.
The fiscal and monetary policy has a big impact on the economy. The goal of both policy options is increasing or decreasing the level of businesses activities. It is always preferable to have a productive growing economy, but an economy can also be too productive. In that case, the government may enact policies to slow down the economy. Fiscal Policies include raising or lowering of taxes. If we raise taxes we are taking money out of circulation. When one considers the impact of taxes one must look at the sector of society being impacted by the tax hike. Does it impact on the middle class, working class or upper class? Does it affect home owners and small businesses? The powers of monetary policy often have immediate and forceful impact and closely monitored. Each policy has one basic goal, impact the money supply. All of these policy actions work using the laws of supply and demand. The more money in circulation, the more spending there is and the higher inflation is in the economy. The less money there is in circulation, the less spending there is in the economy, inflation decreases. Those policies that restrict the money supply are known as tight and those that put more money into circulation are known as loose. Wal-Mart is a good example of how business affects the environment. Wal –Mart