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Business environment
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It is a combination of two words
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Meaning of Business
Business is an economic activity, which is
related with continuous and regularproduction and distribution
of goods andservices for satisfying human wants with anobjective of
earning profit.
http://kalyan-city.blogspot.com/2011/03/what-are-economic-activities-types-of.htmlhttp://kalyan-city.blogspot.com/2011/03/what-are-economic-activities-types-of.html
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Definition of Business
Lewis Henrydefines business as, "Human
activity directed towards producing or
acquiring wealth through buying and selling
of goods.
According to Dicksee, "Business refers to a
form of activity conducted with an objective
of earning profits for the benefit of those on
whose behalf the activity is conducted."
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Meaning of Environment
Environment refers to the aspects of
surrounding.
It refers to set of conditions which have a
bearing on the functioning of the business.
These are essentially the givens within which
firms must operate in a specific country and
they vary, often greatly, from country to
country.
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Business environment
Thus, business environment may be defined
as the total surroundings, which have a direct
or indirect bearing on the functioning of
business and affects the business decisions of
a firm.
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Nature or characteristics of Business
environment
Internal and external environment: Everybusiness enterprise is
surrounded with Internaland external environment.
Dynamic in nature
Inter-dependence: business is influenced itsenvironment and in
turn it will influence theexternal factors.
Uncertainty: It is very difficult to predict the exactnature of
future happenings and the changes ineconomic and social.
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Business environment is different for different
business units
It has both long term and short term impact
Business Environment differs from place to
place, region to region and country to
country.
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Need and importance of Business
environment
Determining Opportunities and Threats: Theinteraction between
the businessand its environment would identify opportunitiesfor and
threats to the business. It helps the
business enterprises for meeting the challengessuccessfully.
Giving Direction for Growth: The interaction withthe environment
leads to opening up new
frontiers of growth for the business firms. Itenables the
business to identify the areas forgrowth and expansion of their
activities.
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Continuous Learning: Environmental analysismakes the task of
managers easier indealing with business challenges.
Image Building: Environmental understandinghelps the business
organizations inimproving their image by showing their
sensitivityto the environment within which they areworking.
Meeting Competition: It helps the firms toanalysis the
competitors strategies andformulate their own strategies
accordingly.
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Structure of Business environment
Internal environment
External environment
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Internal environment
Has direct impact on the business. They are the
factors which have a bearing on the decisions of
a business and which are generally controllable
Value system
Vision, Mission and objectives
Management structure
Human resources
Company image
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http://vijanbe.blogspot.in/2011/02/economic-
environment.html
http://www.authorstream.com/Presentation/
quadir-1316710-business-environment/
http://www.slideshare.net/prashantmehta371
/chapter-1-business-environment-24376020
http://vijanbe.blogspot.in/2011/02/economic-environment.htmlhttp://vijanbe.blogspot.in/2011/02/economic-environment.htmlhttp://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.slideshare.net/prashantmehta371/chapter-1-business-environment-24376020http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://www.authorstream.com/Presentation/quadir-1316710-business-environment/http://vijanbe.blogspot.in/2011/02/economic-environment.htmlhttp://vijanbe.blogspot.in/2011/02/economic-environment.htmlhttp://vijanbe.blogspot.in/2011/02/economic-environment.html
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Values
A value is a belief, a mission, or a philosophy
that is really meaningful to the company.
An example of business value is Customer
satisfaction.
Another example of a value is Being ethical
and truthful
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Utility of values in business
Values release energy because they motivate
people to work together collectively
Values are never ending goals. The more you
pursue them, the greater the energy they
release and put into action.
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Vission
A Vision statement outlines WHERE you want
to be. Communicates both the purpose and
values of your business.
A vision statement talks about your future.
It lists where you see yourself some years
from now. It inspires you to give your best. It
shapes your understanding of why you are
working here.
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Mission
Mission statement answers:
1. What do we do &
2. What makes us different
Mission statement talks about the present
leading to its future.
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External environment
A business does not operate in vacum. It has
to act and react to what happens outside the
factory and office walls.
These factors that happens outside the
business are known as external factors or
influences.
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External environment
Micro environment
Macro environment
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Micro environment
It is also known as operating environment
Micro environment consists of factors or
actors in the business firms which are
immediate environment that affects the
performance of the firm.
It includes the suppliers, marketing
intermediaries, competitors, customers, and
the public.
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Micro environment
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Macro environment
1. Economic environment
2. Political environment
3. Legal environment
4. Socio cultural environment
5. Demographic environment
6. Natural environment
7. Technological environment
8. Global/ International environment
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Economic Environment
Business cycles
GNP trends
Interest rates money supply
Inflation
Unemployment
Disposable income
Economic policies
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Socio cultural environment
Population demographics
Income distribution
Social mobility Lifestyle changes
Attitude to work and leisure
Level of education
Consumers preferences, habits and beliefs
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Natural environment
Environmental protection
Waste disposal
Energy consumption
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Technological environment
Government spending on research
New discoveries/ development
speed of technology transfer
Rates of obsolescence
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Political and legal environment
Government stability
Taxation policy
Foreign trade regulations
Social welfare policies
Monopoly legislation
Labour laws/ employment law
Indian companies law, FERA,FEMA, Competition
act, COPRA, SEBI, Environment protection act
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International environment
Interdependent economies
Decisions of International institutions
FDI
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