International Business Organisations

International Business Organisations

Task 1

Business plays a major role within our society. It is a creative and competitive activity that continuously contributes to the shaping of our society. By satisfying the needs and wants people cannot satisfy themselves, businesses improve the quality of life for people and create a higher standard of living. It is a way for individuals to provide goods and services to consumers, and at the same time, produce a profit for themselves. Businesses are not only important because they provide goods and services for consumers, but they also improve the economy and increase jobs for people within society which is an additional fact producing a higher standard of living.

To measure our societies standard of living, we must look to our 'Gross National Product', which is the complete measure of our nations output. Unfortunately, inflation is a major problem in our nation which often reduces the Gross National Product. Inflation occurs when the goods become too high within society and spending decreases.

A central function within our mixed economic system is satisfying the needs of the consumers with the use of limited supplies. The purpose of a business is to combine resources such as land, labor, and capital in a way that will make them more valuable. Operating in a political and economic climate that supports individual rights, American business has as its guiding principle the right to private ownership and profit. The amount of goods produced depends upon the number of resources available for use. This idea is commonly known as 'Supply and Demand'. Businesses must attempt to reach an equilibrium between the two which will directly impact the price of the products produced. If something is heavily demanded and at the same time, it's resources are limited, the price of the product will rise. This idea of course works both ways. The easier it is to produce something, the cheaper it will be.

All economic systems begin with the same resources including land, labor, capital and technology. These resources may be limited at any given time, varying within the world at large, from country to country. This business cycle explains how business fluctuates from high to low prosperity, recession, depression and recovery over time. The major challenges faced by our nation today are the Federal Budget Deficit, international trade deficit, the Decline of Smokestack America, and the conservation of energy. The Federal Budget Deficit occurs when our expenditures are greater then our revenues. International trade deficits occur when a nation imports more then it exports. The Decline of Smokestack America is when there is a change from an industrial to a post-industrial economy. Finally, the conservation of energy is so that there are a sufficient amount of natural resources necessary to produce goods. General economic growth or stagnation also has an important influence on business within our society. Many factors can affect its condition, such as war, new inventions and technology, political assassinations, the discovery of physical and natural resources, labor negotiations, government action, and ...