Assignment 1: The Business Environment
By: Deont’e Monroe
Course: Bus100 (Intro to Business)
Instructor: Terese Cole

The word business according to Wikipedia.com* is defined as “A business (also known as enterprise or firm) is an organization involved in the trade of goods, services, or both to consumers.”* The word economy according to Wikipedia.com* is defined as “An economy consists of the economic system of a country or other area; the labor, capital, and land resources; and the manufacturing, production, trade distribution, and consumption of goods and services of that area”.* In the simplest form of explanation business is the economy, there can’t be one without the other. From all of the big market corporations such as Wal-Mart, Apple, McDonalds, etc., down to the small businesses started by entrepreneurs. Businesses are labeled into two categories; for-profit and non-profit businesses. For-profit business is defined as “a business or other whose primary goal is making a profit.” Any place where you go and receive a good or service and you must pay in return is a for-profit business. A non-profit business or organization is defined as “An organization which focuses a goal such as helping the community and is concerned with money only as much as necessary to keep the organization operating.” Homeless shelters, soup kitchens, medical institutes, foundations for children, even charities in themselves are non-profit organizations created for the good of giving back to the community. For-profit businesses bring in a crucial number of advantages from investment in research and development, rewards for shareholders, high profit that attracts new firms to the industry, risk bearing economies, to tax revenue. Advantages for non-profits are tax exemption/reduction, eligibility for public and private grants, formal structure and limited liability, and the benefit of providing cost free services for the good of the community. In certain situations businesses might not be doing well. In order to keep the economy in good standing the government uses certain efforts to help influence it. This is known as the fiscal policy which can only have two sides; either a budget surplus which is the revenue being higher than expenses or a budget deficit which is the expenses being higher than the revenue. Monetary policy also plays into fiscal policy and being defined as “Actions that shape the economy by influencing interest rates and the supply of money” Currently both monetary and fiscal policies are affecting the economy in a good way. According to a document entitled “Economic effects of policies contributing to fiscal tightening in 2013” listed on the congressional budget office website a prediction of the future of the economy for the year 2013 is explained as “Substantial changed total and spending policies are scheduled to take effect in January 2013, significantly reducing the federal budget deficit. According to the CBO’s projections, if all of that fiscal tightening occurs, real (inflation adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the forth quarter of 2012 to the forth quarter of 2013) - reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year.” Businesses can also contribute to the economy by bringing in more profit though international trade/global markets. For example a clothing line wanting to reach global markets to increase profit would follow one of the few strategies; Franchising, exporting, contract manufacturing, and a joint venture. Franchising refers to the home company selling to an investor and in turn the investor is receiving permission to use the companies name, logo and brand; the home company then collects a specific percentage of the new stores profits. Another strategy to follow would be exporting; with exporting a company would be selling their domestic products to an international market. For example most things that are sold in the U.S are made in China. Companies in China that produce these products are reaching global markets by exporting their good to the U.S which are sold to us. The third method for global expansion is contract manufacturing which is noted as a domestic company moving its manufacturing process to foreign soil. This method reduced costs on both materials and personnel. The last method for reaching global markets is joint ventures. Joint ventures are typically when one company partners with another company. For example if Company A markets their products to a target range of ages 18-25 and company B which is a foreign company also markets a completely different product to a target range of ages 18-25; the two companies would then look at the proposition off a joint venture to help being each others companies a bigger profit. For my example of a clothing line trying to reach out into global markets, the method of contract manufacturing would be the best strategy for expanding globally. Finally social responsibility is the last aspect of business affecting the economy. Social responsibility is defined as an ethical or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility can range from money donations, to rehabilitating the earth. For example Chick-fil-A fast food restaurants have given $68 million in contributions to over 700 educational and charitable organizations and have provided millions of dollars in food donations all across America. But trouble started to brew for Chick-fil-A; according to Wikipedia.com* the WinShap Foundation, a charitable of Chick-fil-A founder S.Truett Cathy and his family stated it would not allow same-sex couples to participate in its marriage retreats. Chick-fil-A gave over $8 million to the WinShape Foundation in 2010. Equality Matters, an LGBT watchdog group published reports of donations by WinShape to various anti-gay organizations, including $2 million in 2009, $1.9 million in 2010 and a total of $5 million since 2003. WinShape has also contributed to the Fellowship of Christian Athletes, and Exodus International, an organization noted for supporting ex-gay conversion therapy. Also comments made by chief operating office Dan Cathy expressing his religious views on the subject of traditional marriage. * Chick-fil-A has given so much to the community by donating money to non-profits that they choose which coincides with their religious views but it has sparked an ethical dilemma leading to boycotts, petitions, and protests with it’s stakeholders including consumers, employees, and certain investors. All of these elements of business are the environment help to build the platform of the economy; the simplest explanation remains that one can’t exist without the other.

Refrences:
(Websites)
Anonymous
Chick-fil-A same-sex marriage controversy: http://en.wikipedia.org/wiki/Chick-fil-A_same-sex_marriage_controversy#Impact_to_Chick-fil-A Denise Brandenburg
Strategies for Reaching Global Markets: http://www.ehow.com/info_7756986_strategies-reaching-global-markets.html Anonymous
Economic Effects of Policies Contributing to Fiscal Tightening in 2013: http://www.cbo.gov/publication/43694
(Books)
Kelly McGowan BUSN 4th Edition (2012) pgs.3-87