Large Chain Stores and National Growth - Research Paper Example

Large Chain Stores and National Growth Chain stores can be defined as businesses with standardized operations and practices which are under the same management. Chain businesses are firms with many branches and varied brands of goods under a single roof. They have a strong domination in the world today. Chain businesses were started in 1792 by Walton Smith and his wife in Britain. It was aimed at serving the purpose of storage of stationery and entertainment products (Hayward et al. 18). The government has been aware that chain stores are crucial in the national growth and formulated rules and regulation to govern the business operations. The growth of chain stores is of considerable importance when it comes to the growth and size of an economy. There are changes which have emerged due to growth of these stores. This has led to the globalization of the markets and the economic integration due to the introduction of custom unions, free trade areas, political economic unions and social changes which result from the common monetary and fiscal policies (Greenfield, 2011). There are different types of chain stores. These include the consumables and the non consumables stores which are used to stock different types of commodities. These stores are of considerable importance to the nation. Greenfield (2011) asserts that to begin with they have led to the improvement of health sector in the economy. It has been due to this that we have changed the nature of conduct within the place of work. This has led to changes in the political behaviors of dictatorship in the government. This has been due to the misconduct by the wealthy merchants taking their business without considering the health of the workers and their care towards the society members. Secondly these stores have led to environmental conservation. This is due to the organized storage of stock thus avoiding pollution in both air and water. This has led to the conservation of the environment and health for the citizens. In addition, they have led to proper and well organized distribution of goods and services. This is due to the mass production by large companies in the world. Most of these companies are anticipating high returns, and they thus effectively and efficiently struggle to make high profits due to the increase in consumption behavior of the consumers (Howard, 2011). Distribution is a key factor to consider in the modern business. This has been due to the increased competitive nature of suppliers and distributors. Lebhar (4) asserts that consequently, advertising of products is also another factor to adopt due to the rising modern marketing strategies in the field of business. Chain store is managed by observing the degree in which to employ the salesmanship. Salesmanship is employing the convincing power in marketing of the product. However, the business has enhanced the availability of commodities to the customers. This has made it so easy for individuals to acquire goods because of the single roofing whereby one can select the desired product out of the multiple products in the store. The collaboration among many business enterprises has led to capital adequacy in investing especially to the green field investors. Capital is a significant factor to consider in doing a business since it enables an entrepreneur to acquire the factors of production which include land and labor. These are the main resources in production (Lebhar 8). The resources are endowed differently in different countries in the world, and thus chain stores are enjoying together the absolute advantage in production and avoid the comparative disadvantage caused by factor distortion. This has led to franchise in the international market. In addition, the size of the economy must grow, and there is a significant impact on social living which results from varied opportunities in employment. This leads to eradication of poverty and place individuals in a better position to acquire goods and services (Lebhar 10). They thus reinvest the money in the country thus improving the size and the wealth of the country. When considering the impact of the chain stores to the government revenue, it earns income from the taxes it receives from the business ventures. Profits earned by the business are extremely high and the government charges high amounts for this. It enables the government to improve on the development projects such as infrastructure, health sector, and the provision of salaries to its workers. According to Lebhar (12), there is the degree of social responsibility in each and every business firm. This is the duty of the business to develop the community in which it undertakes business. It does so by taking measures such as provision of security to the society members, avoidance of pollution in the environment of its operation. Funding of seminars in the region to educate the society for the business is located. It also provides education to the disadvantaged members of the community. This includes the poor, widows and the disabled. Also, chain stores have led to the advancement in technology in the field of doing business. This has been attained through incentives to encourage innovations and inventions. It is through this that there have been product differentiations in the market. Consumers can also receive perfect substitutes in the market for commodities. This has encouraged competition, and thus products have become easily and readily available to the final consumer (Kirszner & Mandell 15). It is through technical progress that a business firm can effectively trade in the international market. It can both export and import products without being affected by the high transport costs involved. There have been fewer movements in and out of the country and within the country by individuals to conduct business. This is simplified by the use of the internet. Kirszner & Mandell (18) stipulate that this leads to fast growth in the economy and thus there is a close relationship between the developed and the developing countries. Through inventions and innovations, nation grows and becomes more competitive in the world market. This also makes its currency appreciate and resist the fluctuations in the money market. There are extremely much employment opportunities that come along with the expansion of business. This includes the skilled, semiskilled and the unskilled labor. Citizens within a country therefore, secure long term job opportunity. This enables improved social living, which leads to a reduction in the poverty level, and thus economic growth (Kirszner & Mandell 26). These workers also provide the business with ideas also get business ideology from the owners and managers of the firms which employed them. Also, large business especially mergers and franchise expand and open up more branches in the country. They provide better supply of goods and services and therefore, consumers can access them at the door step. These branches make effective utilization of the varied resources of the country (Hayward 21). These are the consumables and the non consumables. It develops trade since a country has immense wealth and resources and can trade effectively in the world market. This is the theory of proper resource utilization which is necessary for the community to advance in its development. Chain stores stabilize the economy. It is in a good position to adjust the changes in the fiscal and the monetary systems. Forces of demand and supply are considered to be self adjusting since the business holds substantial share in the economy. This can lead to prevention and cover from inflation and deflation in the economy. This business also provides financial services to other small businesses to advance in their production and growth. Also, the amount invested in banks can also be used by the banking institutions to give loans to other businessmen. This enables economic development due to high profit received by banks from the high rates of interests they earn from their customers (Hayward 25). Finally, large chain stores work well in a politically stable nation. A country with favorable political climate free from wars and civil crimes encourages fair trade. Political stability also ensures that there are fair price charges to commodities, and there is no intervention of harsh measures of undertaking business such as the formation of cartels which prohibit people from entering into certain businesses (Hayward 29). Such strategies of operations are discouraged by governments by giving subsidiaries in commodities and the consumer protection. There are also unions which are formed for the sole purpose of consumer protection. Large chain stores have grown as a result of licensing; amalgamation and franchise. They have both positive and negative effects on the growth of the economy. Therefore, there are rules and regulations governing their conduct and their place in society. Licensing by the government also depends on the amount of cash flows they generate. Large chain stores are also enjoying the benefits of large scale economies because their size and financial stability can make them conquer other small and growing businesses. This means that they highly participate to a large extent in the economic growth. Measures are implemented to ensure that the small developing business firms are encouraged to the market, and should not be mistreated by large scale producers because of their infancy. Generally, as technology advances, there are many measures which will be adopted in the world of business to reduce business risks. These measures will also ensure that an entrepreneur can enter even into businesses venture with high returns due to the reduce risks (transaction, translation and economic risks). Works Cited Greenfield Beth. Cape Cod Residents Keep the Chain Stores Out. Web. Retrieved on December 4, 2011. Hayward, S., White, P., Fleek, S. and Intyre, M. "The chain store field". Chain Stores: Their Management and Operation. New York: McGraw-Hill, 1992, 16–31. Howard, Theresa, "Big-box stores squeeze into Big Apple." USA Today. Web. Retrieved on December 4, 2011. Kirszner Laurie and Mandell Stephen. Patterns for College Writing 11th Ed. New York: Chain Store Publishing Corporation, 2009, 12-54. Lebhar, M. Chain Stores in America: 1859–1950. New York: Chain Store Publishing Corporation, 1952, 2-13. Read More