Role of business in the economy.
Business builds the foundation of an economy. It can be described as an engine where successful economies derive their growth. The components of business include agriculture, mining, tourism, health care, and political background. The transactions involved in a business contribute to profits, which boost savings and investments, thereby contributing to growth of an economy (Powell and Steinberg, 2006). The government also benefits from business operations due to the percentage of tax collected from such operations. Most successful economies derive their growth from massive taxes collected from public and private business society.
Without business, consumption would not have variety and differentiation. Business creates competition and builds on market systems in production of specialized and differentiated products. It involves trading of variety of supplementary and complimentary products, and this allows consumers to have a variety in consumption (Worthington and Britton, 2009). In addition, business creates employment opportunities where owners of capital provide wages and salaries to labor owners. This boosts the consumption, savings and investment process.
Roles of profit and non-profit organizations on economy.
The overall consumption, saving trends and levels of investment in an economy are dependent on business residues. These residues are referred to as profits. Without profits, consumption, savings and investment levels would decline. Profit making organizations are sources of economic growth (Worthington and Britton, 2009). They facilitate economic growth contributors like salaries, rent, interests, consumption etc. they boost aggregate demand, and increase on the levels of market supply. Profit making organizations are also sources of national income from chargeable taxes.
Non-profit organizations, on the other hand, facilitate the growth of profit making organizations. They enhance security, social welfare, volunteer ship and community assignments, which are conditions for survival of profit generating organizations (Powell and Steinberg, 2006). They cover the areas that the profit making organizations ignore like environmental sustainability. They are aimed at boosting the lives of poor consumers who do not have a place in the private sector. This is done by giving them payments like wages, from their services. Such organizations operate from grants, donors, and government support.
Impact of current monetary and fiscal policies in the economy.
These are control elements that the government together with central bank protects an economy from effects of recession and inflation. The fiscal policy is a control measure that implements government spending, borrowing and taxation measures, to control an economy. It is used in regulating the spending patterns on goods and services. Fiscal policy allows equal income and wealth distribution, and acts as an intervention to correct free market weaknesses. Changes in fiscal tools affect aggregate demand and supply and this assists in economy control.
Monetary policy involves influencing economic money supply levels by the central bank. It involves the use of lending rates, open market operations, moral persuasion, and reserve requirements. The aim of this policy is to ensure price stability, exchange and interest rates guarding against inflation and recession. The central bank formulates expansion or contraction money supply measures to regulate the amount of money in circulation (Langdana, 2009).
Accessing global market.
Microsoft’s new invention, Microsoft Surface, has a challenge when it comes to beating up its competitors in the local and regional market. The existence of strongholds like the iPad, Amazon Kindle Fire and Blackberry, poses a challenge to the product. The competitors have stronger marketing strategies as compared to Microsoft. However, the company still stands a chance to improve on its marketing and pricing strategy in increasing its competitive advantage.
The best strategy that Microsoft should apply to access global market is on pricing (Worthington and Britton, 2009). Since the product already has strong competitors, the company should lower its prices both locally and internationally. Low prices will cover the users who would wish to have iPad features, but they cannot afford the product. This does not, however, imply on quality compromise, but it would be a strategy to market the product as well as establish its existence in the global market.
Corporate social responsibility, Exxon Mobil.
Exxon Mobil is an international petrochemical and petroleum production company based in US. Dealing with production of such products, means that the company has to be involved in environmental stewardship and management. Through its corporate social responsibility portfolio, the company ensures fresh water management policies, control of emissions and waste products, ecosystem and biodiversity services and site remediation. The company promotes biodiversity through financing several research institutions on climate change and development. It supports local and international initiatives in education, math and science, technology and engineering. It also assists women in developing counties, through financing and other aids, in an attempt to promote their self well being, and economic goals. The company is also in record of protecting its workers and immediate community through promotion of health and safety programs.
Despite the company’s initiatives, Exxon Mobil has been on criticism on efforts to manage the environment. Most of its products are not environmental friendly since they contribute to degradation of soil, air and water. Emissions such as carbon dioxide continue to be a management issue. The present policies have not met the control act as per the Environmental Protection Agency requirements. The company, therefore, still needs to improve on its measures to control the emissions.
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Langdana, F. K. (2009). Macroeconomic policy: Demystifying monetary and fiscal policy. New York: Springer.
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Powell, W. W., & Steinberg, R. (2006). The nonprofit sector: A research handbook. New Haven: Yale University Press. Bottom of Form
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Worthington, I., & Britton, C. (2009). The business environment. Harlow, England: FT Prentice Hall.
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