Chapter 3
Business environment
Business environment means the sum total of those factors which influence the business and over which the business has no control.
Features
1)Totally external force:-all activities are dependent on the outside the business
2)Specific and general forces:-
- Specific :-this force affect the form of an industry separately example customer, supplier competitive firm, investor extra.
- General:-all the form and industry equally example social, political and legal technical situation
3 )Interrealated ness :- the different factor of business environment are correlated
4)Dynamic nature :- change in factor
5)Uncertainty:- not possible to change quickly
6)Complexity:- all the factor related to each other
7)Relativity:- business environment is related to the local condition and this is the reason as happen in different countries
Components of business environment
- Internal environment
It refers to all those factors which influence the business and present with in the business itself and are under the control of business
These factor are:-
- Objective of business
- Policies of business
- Production capacity
- Production method
- Management information system
- Participation in management
- Composition of board of director
- Managerial attitude
- Organisational structure
- Features of human resources extra
B)External environment
it refers to all those factors which influence the business exist outside the business and the business is no control over the factor
- Micro environment
It refers to all those external factor which are closely related to business and influence each industrial unit differently
The factor under:-
- Customer
- Suppliers
- Competitors
- Public
- Marketing intermediaries
- macro environment
it refers to all those external factor which have a distance relation with the business and influence all the business units almost in the same way
Dimension of business environment
- Economic environment
It refers toto the combination of economic system economic policy and economic condition of a country
2.Social environment
it refers to the combination of all the characters are the society in which organisation exist
3.Technological environment
It refers to innovate related to various business activity
4.political environment
it refers to the political condition in the country and attitude of the government towards business
5.Legal environment
it refers to the sum total of all the ex passed by the government judgement of the courts and decision rendered by various commission agency in the country
Economic reforms since 1991
A ) liberalisation
liberalization means to unshackling the economic from the very creative web to make it more competitive
B) privatisation
it brief privatisation means such an economic process through which the same public sector undertaking in sword either partially or completely under private ownership
C) globalisation
globalisation means integrating the economic with the rent of the world
Impact of changes in government policy on the business and industry
- Increase competition
- More demanding customer
- Rapidly changing technological environment
- Necessity for change
- Need for developing human resources
- Market orientation.
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Business