Business Environment the Role of Business in Essay

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Business Environment

The role of business in the economy

Sustainability of a business and prosperity to an economy go hand in hand. In order to attain profitability, businesses have a number of roles to play. Businesses provide society with products that are necessary to the society and otherwise unavailable Henderson & Affairs, 2004.

Business assist in providing jobs to the local population, mobilization of resources and increase a tax pool for the government with which provision of social services is made possible.

Businesses are a source of wealth creation to a nation through resource utilization. Production undertaken will build a source for export to other countries Henderson & Affairs, 2004.

Businesses assist in technological advancements and increase an economy's technology base.

Comparison and contrasts between the role of for-profit and nonprofit organization in the economy

Profit organizations are identified to by their key objective of profit maximization. Nonprofit organizations are identified by, their objective to improve social amenities to human life Henderson & Affairs, 2004.

Their key function is improving life rather than profit making.

A profit seeking business will arrange and plan its activities around maximizing its profits. A nonprofit organization will use it resources to improve the living condition of human beings.

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Nonprofit organization will venture in the provision of services that are otherwise considered being social/public good. One crucial characteristic of these goods/services is that no price can be attached to them. The profit oriented organizations will steer away from these types of commodities since they cannot maximize their profits.

For profit organization are required to pay taxes on the profits earned from the services or goods produced. The nonprofit organizations are only required to declare their sources for funds and pay taxes where excess revenue has been earned out of their operation.

The source of funds for profit oriented organization is the capital raised by investors who expect to share in profits in the form of dividends. The nonprofit organization source of funds is donations and grants from stakeholder who are interested in the betterment of human life.

The impact of current fiscal and monetary policy on the economy

Fiscal policy is concerned with the government expenditure level and tax revenue while, the monetary policy is concerned with the Federal Reserve and the interest rates.

The current fiscal policy is aimed at bailing out the crippling economy from recession. The government is said to be spending more than it is earning.….....

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