The Business Environment

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Role of business in economy
Business has a major role to play in development of economy. Business operates to produce goods and provide services to people. Hence they fulfill the requirements of individuals who live in an economy which they need in their day-to-day lives. To manufacturer products businesses need resources for which they employ people. Another role of business is that it provides employment to people which can become career paths for them. Businesses pay taxes to government which makes government carry out development activities for economic progress like creating roads and providing infrastructure. Hence business contributes to the economy in multiple ways.
Roles of for-profit and non-profit organizations
Such businesses which help in development of economy are called for-profit businesses. For-profit organizations operate to generate wealth and provide returns to shareholders. The for profit business has to consider what it takes to buy and sell products. The cost of manufacturing and cost of selling products are called expenses. These expenses must be paid before a business can realize profit. The profit is distributed among shareholders or retained by the business in carrying out new projects.
Other type of organization is called nonprofit organization. Non-profit organization is that organization which operates with a goal of common good and not for generating individual wealth. The profit generated from activities of non-profit organization cannot be used by individuals who control the organization; rather, it is used toward the common goal of the organization. Nonprofit organizations ...