NATIONAL ENVIRONMENT

Understanding the nature of the national environment in which businesses operate

Understanding the nature of the national environment in which businesses operate

Introduction

This study tries to explore the concept of national environment in which the business operates in any country, in a holistic context. The main focus of the research is on economical environmental studies of business atmosphere and its relation with how economic systems attempts to locate the resources effectively (Burda, 1995). The research also analyzes many aspects of business environments, in terms of economy of the country, and tries to gauge its effect on the overall growth, and development through fiscal and monetary policies (Jennifer S. 2011).

Finally, the research by Burda describes various factors, which are responsible for the Impact of fiscal and monetary policy in business organizations and their activities, and tries to describe the overall effect of the Impact of competition policy, and other regulatory mechanisms of the activities of selected organisations (Burda, 1995).

Economy of Resource allocation

Giovanni stated that economic is the social science that deals with analysis of the production, consumption, distribution and utilization of goods and services within or outside the country. The studies of the economy are applied through the entire world (Jensen, R., 1976). The economy of the states is used for the management of the input and output around the country. The efficient allocation of resources, to meet the need of the state is called the budgetary resource allocations (Giovanni, 2002).

Market Economy

The market economy can be defined as a system for the decision making regarding the production, exchange and allocation of goods and services of the scarce resources is typically determined using sources derived from the free interaction of supply and demand determined by market forces (Janisch, 1987). The economy is driven by the consumer and their buying decisions. In a free market economy, households and business firms use markets to exchange money and products. In a free market, it is the consumer who determines the allocation of resources (Hulse, 2011).

Planned/Command Economy

In this economical system, the crucial economic processes such as production, trade and consumption are controlled centrally by the state. In this economical system, economic goods, raw materials and production companies are nationalized (Larsen, (1990). All resources are owned by the state. The state has also a central plan for all business processes establishes and defines the manner, amount and prices of products and services (Stigler, G. 1971). The government or planners decide what will be produced. They allocate resources according to the governments own view of what the people want. Countries like Cubs and North Korea are using the planned economy model (Kenney, R., 1983).

Mixed Economy

It was Wyplosz who said that the general model for the combination of free market and planned economy is called mixed economy. In other words, a proposal in which there is both private property of capitalism as community property or social socialism (usually, but not exclusively, a state or public) to include in an economic system broader social considerations, for example, ethics, social justice, social ...