Domestic and global business environment

Domestic And Global Business Environment

By R. Paul Godwin

Business Environment“Consists of all factors that have a bearing on

the business”

Factors:PoliticalLegalTechnicalEconomicSocial culturalEtc..

Types of Business Environment

Economic environment.

Non-economic environment.

Economic Environment

Economic Conditions. include gross domestic product, markets for goods

and services , foreign exchange reserve, growth of foreign

trade, etc. Economic Policies. (i) Industrial policy

(ii) Fiscal policy (iii) Monetary policy (iv) Foreign investment policy (v) Export –Import policy (Exim policy)

Industry policy

The Industrial policy of the government covers

all those principles, policies, rules and procedures, which direct and control the industrial enterprises of the country.

Fiscal policy

It includes government policy in respect of public expenditure.

Example: TaxPublic Debt.

Monetary policy

It includes all those activities and interventions

that aim at smooth supply of credit to the business and a boost to trade and industry.

Example: Interest rates.Bank reserves. Etc…

Foreign investment policy This policy aims at regulating the inflow of

foreign investment in various sectors for a firm.

Export–Import policy (Exim policy)

It aims at decreasing the gap between export and import.

The focus now-a-days lies on removing barriers and controls and lowering the custom duties.

Non-Economic EnvironmentSocial Environment.Political Environment.Legal Environment.

Social EnvironmentThe social environment of business includes

social factors like customs, traditions, values, beliefs, poverty, literacy etc.

For example: During festive seasons there is an increase in the demand for new clothes, sweets, fruits, flower, etc.

Political EnvironmentThis includes the political system, the

government policies and attitude towards the business community and the unionism.

Eg: Labour Union.

Legal EnvironmentThis refers to set of laws, regulations, which

influence the business organisations and their operations.

Every business organisation has to obey, and work within the framework of the law.

Eg: Factory act 1948.

Domestic Business EnvironmentThe domestic factors that affects the firm

situated in a domestic country.

Features D.Business environmentBusiness are carried out in home country

only.It depends on domestic culture of the people.In case of monopoly, the firm can achieve

large profit.The legal factor do not affect more on

domestic environment.

Global Business Environment•The Global Business Environment is that the business carried on globaly.It is influenced by the World Trade Organisation, principles and agreements.

Features G.Business Environment

Doing or planning to expend, Business Globally

Each country or market was assumed to be difficult to reach others.

Global business mainly focused to get the Domestic market of a country.

conclusionDomestic Environment is the first and

foremost step that is taken to establish a successful Global environment.Once the domestic Business is successful that will lead to a higher chances of being very successful at the Global Level.The environment should be properly utilized to get Positive results because over Globalisation might lead to the destruction of the Domestic environment.