Business is ever-changing and always growing. From the multinational corporations and other publicly traded companies that fuel the global stock markets, to the small business enterprises that are the staples of our communities. Business is moving at breakneck speed fueling the world economies, and shaping our societies.
A business is any activity that provides goods and services in an effort to earn a profit, (McGowan 2012). It is the backbone of the economy providing the products, and services we consume, the jobs we work to earn income, and the taxes governments collect to run our countries. Four fundamental resources known as the factors of production fuel all businesses. These factors of production include natural resources that must be extracted, refined, or harnessed, and used as the very building blocks of businesses. Capitol which includes machines, tools, buildings, information, and technology is a second factor that feeds business, (McGowan 2012). The people who physically work creating, and contributing to the workforce is a third factor of production, known as human resources. The fourth is entrepreneurship because without the vision and drive to launch a business and seize an opportunity, businesses would not be as big as they are today.
Business experienced a sort of big bang with the Industrial Revolution of the mid 1700s through the mid 1800s. Great Britain is credited with sparking this period of industrialization by moving from a manual labor based economy, to more of a machine -based manufacturing economy, (Aspects of the Industrial Revolution in Britain). English law permitted formation of joint stock companies as far back as the British East Indian Company of the 1600s, (From Trade to Colonization Historic Dynamics of the East India Companies). Business boomed from there into an entrepreneurship era, where industrial titans created enormous wealth and raised the overall standard of living. After the Civil War period in America until the early 1900s, major businesses refined production, and increased productivity. This era is known as the Production era, when many businesses were lowering manufacturing costs, creating more specialized jobs and lowering prices for consumers. After World War II businesses concerned themselves with pushing their goods to consumers. This Marketing Era led businesses into developing distinct identities, and established various brands to differentiate products from one another. Today marketing concepts greatly influence companies as products are produced with great efficiency and marketed competitively in an ever growing global market place.
The business environment has a great influence on the success of any business. Whether it is for profit business or not for profit business the landscape is the same. Nonprofit business is just as substantial to the overall economy as for profit business. The end goal is not the building of wealth but nonprofits employ people, take in revenue, produce goods and services, and contribute to economic stability and growth. Both for profit and nonprofit businesses must navigate through the five distinct business environments that greatly dictate success or failure. The economic environment involves economic factors such as employment, income, inflation, interest rates, productivity, and wealth that determine consumer spending. The economy is governed by an unpredictable business cycle of expansion and contraction. The current economic environment has been turbulent for many businesses across the globe since the start of the “Great Recession” in 2007, (Real Causes For US Financial Meltdown and Global Recession). This global economic decline so greatly affected American business that the U.S. government had to intervene with a host of new fiscal policies to aid recovery. Fiscal policy refers to when a government takes action to influence the economy through taxation and spending to encourage economic growth,