The Business Environment
Business 100
7/29/12

The Business Environment This paper will focus on the total business environment. For instance business and the current economy have major affects on each other in terms of profits and stability. Will show how the economy can affect for-profit and nonprofit organizations and their ability to make money. Next, discuss the current U.S. fiscal and monetary policies and their impact on the economy. Outline a strategy taking Verizon Wireless to the global market. Finally, discuss social responsibility for Verizon Wireless and the impact they have on their community.
Business in the Economy
Most everything you can think of that relates to the economy is business. Retail, services, agriculture, manufacturing and health care all involve business. The economy depends on business to provide products and services as well as employment, without producers and distributors then consumers would be forced to produce, store and sell items themselves. Business improves the standard of living by producing products that people rely on in their day to day lives and provide employment so that people can purchase the products and services they want. Big and small business also fuel the economy through taxes paid to the government, which are used on projects to improve roadways and education.
Compare and Contrast For-Profit and Nonprofit Organizations in the Economy
Any businesses’ main goal is to make a profit. What a business does with that profit determines if it is a for-profit business or a nonprofit organization. Nonprofit organizations contribute to the community by focusing on areas such as art, culture, healthcare and education. These organizations also rely heavily on donations to fund their organization. Nonprofits are similar to for-profit businesses in many ways. They contribute to the economy through employment, generating revenue, they produce goods and services and their main goal is to make money. When the economy is booming for-profit and nonprofits both have the ability to make huge profits. Consumers are buying more products and they are able to spread out their donations to many nonprofit organizations.
In an economy that is struggling most businesses suffer and find it hard to make a profit. This is even more difficult for a nonprofit organization. In a struggling economy, consumers have less money to buy luxury items and make charitable contributions. Sometimes in a booming economy a person may have four or five nonprofits that they can donate to. When money is tight in a struggling economy a person may need to select one or two of their favorite organizations and limit their donations or eliminate donations altogether.
Impact of Current Fiscal and Monetary Policy on the Economy At the end of 2007 the United States entered a recession. Mortgage values dropped, almost two million Americans lost their jobs and financial institutions faced possible collapse. In an effort to help the economy recover the government set out to keep interest rate low. U.S. fiscal and monetary policies allow the government to decrease taxes, increase government spending and decrease interest rates. By decreasing taxes the government is able to encourage growth, Americans have more money to spend and invest. Increasing government spending creates jobs and infuses the economy with money. These are only short term solutions. Keeping interest rates low is a long term solution and is going to drive the U.S. economy out of its recession. The Federal Reserve (FED) manages the U.S. monetary policy. The FED is keeping short term interest rates low by setting the Fed Funds target rate near zero and telling the public it will remain there until mid-2014. Long term interest rates are kept low by the FED going out into the open market and buying long term U.S. Treasury Bonds, which will drive up prices and drive down interest rates. Lower interest rates and more opportunities for loans will increase spending, lead to business creation and create jobs. This in turn will stabilize the economy over the next several years. In 2010 the U.S. economy started to slowly turn around due to these changes in the fiscal and monetary policies.
Strategy for Accessing Global Markets Verizon is a reliable domestic service that is working to build its brand in global markets. Currently the wireless side of Verizon is only available in the U.S. The U.S. ranks as the nation with the third highest number of mobile phone subscribers, both China and India almost triple the U.S subscriber base. In order for Verizon to move into the global wireless market these two countries would be a good place to start. China currently has the largest subscriber base of mobile phone users, they share the same CDMA technology as Verizon and their country’s economy continues to grow through business and technology. Since China’s economy is already booming with new business the best strategy to go global would be to enter into a joint venture with an already established China based company. Verizon knows the mobile phone business and the China based company would already be familiar the infrastructure, laws and regulations and political climate. The China based company would also be familiar with the potential workforce’s sociocultural differences such as values, language and attitudes. The partnership would allow a China based company not already in the wireless industry to enter the wireless market and allow Verizon the global branding it seeks.
Social Responsibility Verizon is a company that has a great deal of social responsibility. They have programs such as Hopeline, which allows customers to donate any phone that they are not currently using to women in battered women shelters. Thinkfinity is another Verizon program designed to provide resources to help teachers and parents develop literacy in young children in their communities. Verizon also has a go green campaign to encourage environmental responsibility. They have replaced plastic bags with paper and also encourage employees, customers and businesses to go paperless by using an online site to view their monthly bills. During any recent natural disaster in the U.S. Verizon has been there to connect families with mobile phones and provide communication for rescue workers. Verizon has had a huge impact on local communities through these programs. Between 2001 and 2010, 6.7 million phones were collected through the Verizon Hopeline program. The Verizon Foundation has invested more than 280 million dollars in local communities since 2005. Some of this money is from corporate donations or investments in social programs like Hopeline and Thinkfinity. There are other ways that Verizon contributes to the community. Employees of Verizon can make donations or volunteer their time for nonprofit organizations and have the Verizon Foundation match those donations monetarily. Verizon’s social responsibility will continue evolve and have an even greater impact on the community in the years to come.
Conclusion
The business environment can be complicated and even unstable. The economy of a country can determine the success or possible failure of a business, even when a strong strategy is in place. The government can make changes to policy in order to boost an economy and encourage business growth, but this can be a slow and tedious process. Verizon is an example of a company with strong ethical and social responsibility that has continued to remain profitable in a struggling economy.

References
Kelly M., McGowan J. (2012) BUSN 4th edition