The Business Environment

The Business Environment

Introduction

The analysis of the business environment is of vital importance for any business. As a result of fluctuations and economic times the company begins to review the external situation and factors contributed to the deficiency in the performance of their activities. The analysis is to determine the influence of external factors: economic, political and social situation within the company, and as projected in the same industrial environment (Grant, 2005).

Discussion

Role of Business in the Economy

Today, the role of business in the economy is virtually independent of its type. You cannot talk about the greatest preference for small or large businesses. Both types are necessary for a modern economy. In the area of heavy industry, metallurgy, large-scale production cannot imagine functioning of small businesses. On the other hand, in the service sector, retail trade and catering predominant number of functioning small type. Consequently, the first step is to choose the right activity. Businesses are the growth engine of the most successful economy. Business is the pillar of the economy. Even when civilizations were based on an agricultural type of economy, business transactions occurred. In any capitalist economy, businesses play a huge role. Businesses are the major provider of jobs and the major drivers of economic growth in a typical capitalist economy.

Roles of For-Profit and Non-Profit Organizations in the Economy

Profit and nonprofit organizations both share the belief in sustainability and the profit making motive. Profit organizations are much more impacts on the economy as compared to non-profit organizations the non-profit associations have a significant impact on the economy. It provides local economies with public goods that generate positive externalities for the local community; a housing assistance program helps families in transition find affordable housing, a conservation society provides open green space in the form of a downtown park, and a non-profit hospital can provide emergency care to those without health insurance (Stronge, 2009). Whereas profit organizations seeks for their own interest only. These externalities are generally seen as important components of local quality of life, yet the non-profit organizations themselves have no way to internalize these benefits. Non-profit organizations are everywhere; private higher education, the majority of residential health care services and hospitals, arts and culture organizations, environmental and conservation societies, and a variety of human and social service organizations are all types of non-profit organizations that generate goods and services that increase the quality of life for people in the community. A non-profit has the ability to award employees with tax deferred annuities or tax deferred compensation, according to existing local, federal, and state statutes where as profit employees of a profit organization does not enjoy this kind of benefit, it affects their life and ultimately it affects the economy.

Impact of Fiscal and Monetary Policy on the Economy

Here in the US, it has forced not just central government, but local government and every institution and business in the country as well as all people to live within their means and cut back on ...