The Business Environment



The Business Environment

Introduction

Business environment is a phrase consists of two words “business and environment” business is a human activity of production, sales or purchase of goods, excretion to earn profits. In addition phrase environment means aspects of surroundings (Friedman, 2006). Business environment is constantly changing, it is compound in nature, and there is different environment for different industries. Business environment had long-term as well as short term impact on the economy.

Role of Business in the Economy

Business and economy go hand in hand because business is just like the backbone of economy. Powerful sectors of small, medium, and large enterprises is one of the keys to economic and social prosperity of the country. The economies of the country depends upon the employment provided by big and small businesses and produces the goods and provide the services upon which we rely on in our daily lives. A business pay taxes to the government and allows the government to function on the tax collected from them. Hence business is the pivotal part of economy. Business role in the economy is very important, especially in developed economies such as Japan, USA etc. It is the foundation for a market economy. Businesses are the major provider of jobs and the major drivers of economic growth in a typical capitalist economy (Heyne, 2002). Businesses are the growth engine of the most successful economy. Business is the pillar of the economy. It creates the environment and the entrepreneurial spirit, without which the market economy is impossible. The importance of business is that it is a driving a fierce competition for survival, they are forced to constantly evolve and adapt to current market conditions, because there have to get a livelihood, and thus be better than others, got it to profit by it.

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

Economy is affected by both profit and nonprofit organization, they play very important role in the economy. Profit organizations measures return to risk when they invest, they invest in any operation to have returned, Entrepreneurs of profit organization believe that the more the risk, the longer time they have to wait for the profit whereas nonprofit organizations are important actors of the market economy are legal entities. They are not based on profit motive they operate for the needs and goodness of people and society. Profit organizations operate for themselves whereas nonprofit organizations operate for the ...