23708287 indian business environment 1st unit

8/12/2019 23708287 Indian Business Environment 1st Unit

1/37

UNIT -I


2/37

Definition: According to Androse The term

business environment of a company is defined as

a pattern of all external influences that effect its

life and development.


3/37

Business environment consist of all those factorsthat have a bearing on the business.

The survival of a business firm depends on its

innate strength resources at its command and its

adaptability to the environment and the extent to

which the environment is favorable to

development of the firm


4/37


5/37


6/37


7/37

The survival and success of a firm, thus, dependon two ma or factors, vi!," the internal

environment " the external environment.

A #$%T analysis i.e analysis of strengths

and wea&nesses of the organisation and

opportunities and threats in the environment.


8/37

The internal environment has two components:

strengths and wea&nesses of the organisation.

The internal factors are generally regarded as

controllable factors because the company has

control over these factors: it can alter or modify

such factors as its personnel, physical facilities,

organisational and functional means, such asmar&eting mix, to suit the environment.


9/37

The external environment has two components:

opportunities and threats to business.The external

factors such as economic factors, socio"cultural

factors, govt and legal factors, demographicfactors, geo"physical factors etc are uncontrollable

factors.


10/37

Business 'nvironment at ( levels:

)nternal environment

cro*tas&*operating environment+acro*general*remote environment


11/37


12/37

Customers

Those people organi!ations in the environment whoac-uire goods or services from the business are

customers.

As recipients of the business output, customers areimportant because they determine the business s

Types of Customers

)ndustrial /ustomers

)nstitutional /ustomer

0oreign /ustomer


13/37


14/37

Suppliers

The people organi!ations who provide the raw

material the business uses to produce its output.

The relationship among them must of cooperative

in nature in order to save money, maintaining

-uality, and speeding products to mar&et.

1eliability

+ultiple #upplier


15/37

Market Intermediates

Types of Market Intermediates+iddlemen

+ar&eting Agencies

0inancial )nstitution

3hysical )ntermediates


16/37

PUBLIC

+edia 3ublics

4ocal 3ublic


17/37

Significance of Business Environment:

There is a mutual interdependence between business

and its environment. A business enterprises is an

open system. )t continously interacts with its

environment. Business ta&es inputs raw materials,

capital, labour, energy etc. from its environment, and

transform them into goods and services and then

send them bac& to the environment.


18/37

Business and its external environment interact in the

following ways.. 'xchange of information

. 'xchange of resources.

. 'xchange of influence and power.

0or incorporating dynamic behavior of environment

/omplete &nowledge of internal environment

To understand international events, pressures impact

'conomic policies of the govt.


19/37

'conomic policies of the govt.

To face business problems challenges

5igilant regarding dangersAdministrative system

%ptimum utili!ation of resources

+ar&et conditions

#cientific industrial advancement

Development success of business


20/37

Dimensions of Business Environment:

The main dimensions elements of business

'nvironment are as follows:"

Economics Environment : The economics

environment comprises of the factors and forces

concerned with means of production and

distribution of wealth. )t refers to the nature of

economic system ,organisation of capital and

money mar&ets, income level ,price level,

economic policies of the country etc.


21/37

Social Environment: This environment includes

social factors such as attitudes of people ,socialcustoms and traditions ,education level, si!e of

population ,trade unions, occupational structure

etc. Political Environment: 3olitical environment

refers to the country6s political system, type of

government, government policies towardsbusiness ,government ,centre state relations

,public opinion, law and order etc.


22/37

Legal/ egulator! environment :

4egal environment of business includes all the

laws, legal system and udiciary system of the

country. A business has to wor& within framewor&

of country6s laws and regulations.


23/37

#ocio"/ultural 'nvironment#ocial and /ultural environment refers to theinfluence exercised by certain social factors which

are 7beyond the company s gate. #uch factors

include, among others, attitude of people to wor&,attitude to wealth, family, marriage, religion,

education, ethics and social responsibility of

business.


24/37

LE"ELS #$ CULTU E : 0our levels

8ational /ulture: 8ational culture is the dominant culturewithin the political boundaries of a country.

Business /ulture: Business culture guides everyday

business transaction.

%rganisational /ulture: )t refers to the philosophies,

ideologies, values, assumptions, beliefs, expectations, and

norms that &nit an organisation together and are shared by

its employees.


25/37

%ccupational /ulture: Different %ccupationalgroups such as physicians, lawyers, accountants,

professors, and crafts people have distinct

cultures" called %ccupational cultures.


26/37


27/37


28/37

Tec%nolog! :

)ncludes scientific and technological

advancements in a specific industry as well as in

society at large. '.g. /omputer industry, etc.

Technological advances can change the rule of the

game9 thus every business must be ready to

respond.


29/37

Legal an& Political

The legal"political element includes the legal and

governmental systems within which a business must

function.

a. Business must operate within the general legal

framewor& of the countries in which they do business.

b. Businesses are sub ect to an increase in lawsuits filed

by customers or employees.

c. The political issues which affect businesses includethose which influence the extent of government

regulation.


30/37

Natural Environment

/limatic weather condition.

Availability of 8atural resources.Topographical factors: 3hysical features of place.

3ollution /ontrol

Demographic Environment Age /omposition

#ex /omposition

'ducation 4evel0amily si!e structure

rban"rural population


31/37

Business Environment


32/37

International Business

$hen business activities are performed on an internationallevel, these can be termed as international business.

Basic functions, processes and techni-ues of international

business are essentially the same as those involved in

domestic business.

$hat is different is the environment within which these

functions are performed and processes are carried out .


33/37

)nternational Business environments are unfamiliar

and different from the domestic environmentThese variations may need adaptation for business

success.International Business Environment

)n the context of a business firm' environment can be

defined as various external actors and forces that

surround the firm and influence its decisions and

operations.


34/37

The two ma or characteristics of the environment as

pointed out by this definition are:

these actors and forces are external to the firm

these are essentially uncontrollable. The firm

can do little to change them


35/37

Concept of (lo)alisation :

2lobalisation means ; to ma&e global ,that is worldwide or effecting or ta&ing into consideration the

whole world or all people ;.2lobalisation is a

process of integration of business activities andgrowing economic interdependence between

countries in the world economy.


36/37

$actors t%at lea& to glo)alisation :

2rowing similarities of countries in terms of available

infrastructure.

2lobalisation exposes firms to international competition.

'mployment opportunities wil be increase over a period

of time.

$idening of competition.


37/37

23708287 indian business environment 1st unit

Documents