The Business Environment - Essay Example

Businesses also aid in settling economic requirement of more than 70% of Kenyan citizens through the provision of employment opportunities. Through these employments, the government is able to involve the large population in the day to day national economic activities. Business organizations are able to produce significant quantities of goods at reduced cost. The economies of the scale are achieved; business organizations incur lower costs per unit of output because they operate on a large scale thus lower price of their products (Wang, 2009).

In fact, large-scale account for over 60 per cent of all the private sector’s production. A substantial output in the gross domestic product (GDP) is thus achieved nationally due to this high percentage. Business has also enhanced economic development through encouraging competitive innovation. It is through competitive innovation that the nature of products and services Improves on a daily basis. A good example is the banking industries, initially they had only over the counter transaction, later came the automated teller machines and now mobile banking that are developments that were brought about by innovation.

It is also through this that the consumers get to use the up to standard goods and services. Businesses also give chances to entrepreneurship which greatly help in the development of the economy (Haraf & Willett, 1990). Both for-profit and nonprofit profit has their share of contribution to the economy. The for-profit organizations participate actively through payment of revenues, employment creation, service provision, and production of goods and services that to the public. On the other hand, nonprofit organizations might be exempted from tax payment, but still do play a significant role in a country’s economy through involvement in activities like, provision of education, health services, voluntary provision of professional services like counseling, community services and quite a variety of services essential to the sustenance of the economy.

Nonprofit organizations always have it rough when it comes to capital acquisition. This is clearly portrayed by their depend on donors, well wisher and in some cases grants from the government. On the other hand, the for-profit organizations always have more option ranging from selling shares to investors, liquidating of assets, and credit from banks and profit from a business transaction. Another difference crop up when we view how the assets are handled. In the nonprofit organizations, the assets are considered nobody’s property, thus in the case of dissolution, the assets might be considered for donation to another organization of the same nature.

Unlike the non-profit organizations, the for-profit organizations have their assets owned by the owners of the business (Doole & Lowe, 2008). Monetary policy can be described as the procedure through which a country control the supply of its currency while fiscal policy can be described as the use of taxes and expenditures by the government to manipulate the economy. There are majorly two forms of monetary policy programs: expansionary (easy) monetary policy and restrictive monetary policy (Wang, 2009).

The expansionary monetary policy lowers the domestic currency exchange rate thus weakening the current account and ultimately improving the financial account. Vise versa