The Business Environment - Essay Example

These profit seeking activities are performed by the enterprises that provide goods and services to the people of the country and which are necessary for the economic system of the country. Some of the enterprises produce tangible goods like automobiles, computers, etc., while others provide services like banking, insurance, etc. (Pride et al 2011). Business activity is very important for the economic development of the country, as it not only creates the job opportunities for the people of the nation, but also improves the standard of living.

Business determines the needs and demands of the people and fulfills them by providing various goods and services. Business also acts as a major source of foreign exchange for the country (Dunning & Lundan, 2008). For example, many enterprises sell their products across the national borders. They also organized various international events which not only bring the foreign currency in the nation, but also lead to the development of infrastructure which further facilitates the growth of the country’s economy.

There are different factors according to which the enterprises working in a country can be categorized. One of the criteria of dividing the enterprises is the objective of the organization. On the basis of the objectives, enterprises can be divided into two categories: for-profit organization and non-profit organization (Kerlin, 2009). The term “profit” represents the rewards that a business person seeks to get against the risk which is involved in the combining the people, technology and information to fulfill the demand and needs of the people of the country (Thuronyi, 1998).

The enterprises with the objective of earning profit are called as for-profit organizations. Such organizations mainly help the country to grow financially and provide the source of income to its citizens. Apart from the acting as income source, these organizations also help the society by launching different social programs which are known as corporate social responsibility. They pay heavy taxes to the government which improves the infrastructure of the nation. Consumers are the major beneficiaries of such enterprises.

Their major objective is to increase their profit, for which they try to attract as much as possible consumers. Inter rivalry among the different enterprises results in better quality products in the market at acceptable prices (Blackford, 2008). The other category of enterprises is known as the non-profit organizations. These are the enterprises which aim to work for the social development rather than earning profit for the owners (Kurtz & Boone 2008). They need to earn profits for their operations but their main objective to work for the society which is the major difference between them and for-profit organizations.

They operate in both public and private sector. They help in the economic development by improving and fulfilling the social needs of the citizens like education, better sanitation, and working for weaker section of the society (Keough, 2008). Both types of enterprises are different in nature, but both are required for the economic development of the nations. Government policies are the other major factor which defines the economic growth of a country. Fiscal policy and monetary policies are two tools that are