Business Environment Intro

8/3/2019 Business Environment Intro

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Business Environment

Introduction



Present Scenarioof









Importance of Study

1) To prepare long term Business Policies

2) To prepare Dynamic & Competitive strategies

3) To foresee Socio-Economic changes

4) To forecast Demand

5) To contribute to Social Responsibility



Business: Meaning & Objectives

y Economic activities related to the production anddistribution

y Dealings in exchange of goods and services

y Element of continuity of transactions

y Element of risk and uncertainty

y Profit motive



Characteristics of Modern Businesses

Large size

Global Reach

Technology based

Diverse

Government Control

Oligopolistic Structure

Emerging EthicalConsciousness

Out of the 100 largest economies in the world,

51 are global corporations; only 49 are countries.



Business Environment

y Business environment refer to allthe factors which affects theactivities of a business.

y Business managers as decisionmakers are concerned with theconstraints and opportunities that a business environment offers.

y It is the responsibility of businessmanagers to adapt their firm to the

changing business environment.



Factors Affecting Business Environment



The Internal Environment

Internal environment refers to the framework, thesituation and the factors within the business organizationand their impacts on its working.

Factors affecting the internal environment:

y Relationships within organizationy Physical assetsy Human assetsy

Financial Resourcesy Firm·s Goalsy Organizational value system



The External Environmenty A business organization is also influenced by certain forces,

institutions and organizations operating from outside.

y The Micro-environment

y The Macro-environment



The Micro-environment

Customers

Suppliers of input

Workers along with trade unions

Market intermediaries Competitors and the public



The Macro-environment

y It is this environment that is likely to determine

to a great extent the success or otherwise of

business.

y Divided intoyEconomic Environment

yNon-economic Environment



The Economic Environment

y

Economic Systemsy Structural Equilibrium

y Banking and Monetary Policyy Fiscal Policyy

Economic and Price Stabilityy Money and Capital Markety Factor Endowmentsy Size of the Markety

Social Overhead Capitaly Income Distribution and Purchasing Power

y ExternalTrade/International Environment



The Non-economic Environment

y The Socio-cultural environment

y The Educational environment

y The Political-legal environment

y The Demographic environment

y Natural Environment



Business Environment Intro

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