The roles of business, nonprofit organizations, and government policy in economic prosperity

Business Environment

The role of business in the economy

Sustainability of a business and prosperity to an economy go hand in hand. In order to attain profitability, businesses have a number of roles to play. Businesses provide society with products that are necessary to the society and otherwise unavailable Henderson & Affairs, 2004.

Business assist in providing jobs to the local population, mobilization of resources and increase a tax pool for the government with which provision of social services is made possible.

Businesses are a source of wealth creation to a nation through resource utilization. Production undertaken will build a source for export to other countries Henderson & Affairs, 2004.

Businesses assist in technological advancements and increase an economy's technology base.

Comparison and contrasts between the role of for-profit and nonprofit organization in the economy

Profit organizations are identified to by their key objective of profit maximization. Nonprofit organizations are identified by, their objective to improve social amenities to human life Henderson & Affairs, 2004.

Their key function is improving life rather than profit making.

A profit seeking business will arrange and plan its activities around maximizing its profits. A nonprofit organization will use it resources to improve the living condition of human beings. Nonprofit organization will venture in the provision of services that are otherwise considered being social/public good. One crucial characteristic of these goods/services is that no price can be attached to them. The profit oriented organizations will steer away from these types of commodities since they cannot maximize their profits.

For profit organization are required to pay taxes on the profits earned from the services or goods produced. The nonprofit organizations are only required to declare their sources for funds and pay taxes where excess revenue has been earned out of their operation.

The source of funds for profit oriented organization is the capital raised by investors who expect to share in profits in the form of dividends. The nonprofit organization source of funds is donations and grants from stakeholder who are interested in the betterment of human life.

Economies of scale strategy for accessing global markets by Coca-Cola

Strategy of accessing global markets entails marketing strategies which, requires standardization of activities geographic regional markets. Standardization, does not rule out customizing strategy to accommodate a particular market need Garvin, 2000()

Coca-Cola Company uses the product development function as a source of its economies of scale. The technological viability of this function is driven by homogeneity of the Coca-Cola product. Standardization of the product is set as a prerequisite so that their products taste the same world all over. This yields a streamline process and cost efficiencies.

Impact of Starbucks level of social responsibility on small coffee producers in developing countries

Starbucks Corporation is the largest coffee company with chains of outlet all over the world. Among its stakeholders are small scale farmers in the developing countries. As part of its corporate social responsibility, it has designed a certification program to show concern with for small coffee producer incomes. Starbucks has contracted a nonprofit organization that issues certificates for fair trade products (Carlton, 2000). This certificate is issued to coffee farmers who have to meet pre-set requirements of fair trade. Farmers form cooperatives and are linked with coffee exporters. These groups provide affordable credits as well as premium over a prevailing market price for their produce. This has helped ensure that coffee farmers receive stable and higher incomes. It has also ensured that the farmers have access to education for their children, housing and basic health care.

Reference

Garvin, D.A. (2000). Building A Learning Organization, Transitional Management: . Brazil: McGraw-Hill Higher Education.

Henderson, D., & Affairs, I. o. E. (2004). The role of business in the modern world: progress, pressures and prospects for the market economy: Institute of Economic Affairs.