Business Environment

Course Content

Social, Political and Ecological issues Business ethics Social responsibility Energy Management Family. Vs. Professional business Industrial units Joint Ventures and Technology Transfers Multi National Corporation, Administrative Pricing Business Resources Economic Trends Case Studies and Presentations

Reference Book

Essentials of Business Environment by K Ashwathappa Business Environment by Justin Paul Business Environment & Public Policy By R A Buchholz

Objectives

To sensitize participants to issues impacting business in general and an enterprise in particular Enhance the understanding of environment in the modern context Discuss the trends, strategies and approaches in environment management

Lesson Plan

Introduction Socio-cultural environment Political environment Regulatory environment Ecological Issues Business ethics & Corporate Social Responsibility Technological environment Globalization & MNCs Liberalization & privatization Economic trends Presentations

Marking Scheme

End Semester Exam: 60 %

Group Presentations: 20 % Class participation and attendance: 20 %

Introduction

This is very exiting and challenging time Business environment very volatile and dynamic So many opportunities So many challenges

Nature of Business

Business may be understood as the organized efforts of enterprise to earn profit It may be small or big in size Ultimate aim to earn profit

Criticism of Business

Business has corrosive effect on cultural values Business dehumanizes and exploits workers Business harms interest of consumers Degrades nature and environment Destroys handicraft and renders artisans jobless

Criticism of Business

Causes scams and scandals Multiplies needs and makes people greedy Business leaders bend rules, cut corners, bribe officials and challenge existing authority

Business Critics

Characteristics of Contemporary Business

Business Transition

From rigid, hierarchical and tall structures to flexible, flat and team based structures Family centric, closed minded and secretive environment to dispersed ownership, open minded and transparent environment Caste ridden, superstitious, laid-back styles of management to rational thinking and vibrant styles of management

What is Environment?

Environment mainly refers to external forces that impact business Such forces include political, legal, technological, cultural, economic and physical

Forces of Environment

The Process of Environmental Analysis

Scanning Monitoring Forecasting Assessment

Scanning

a) b)

Scanning involves general surveillance of all environmental factors and their interactions in order to: Identity early signals of possible environmental change Detect environmental change already under way

Monitoring

a) b) c)

Monitoring involves tracking the environmental trends, sequences of events, or streams of activities. It frequently involves following signals unearthed during environmental scanning Outcomes of monitoring: Specific environmental trends to be forecast Identification of trends for further monitoring Identification of areas for further scanning

Forecasting

Forecasting is concerned with developing projections of the direction, scope and intensity of environmental change

Assessment

Assessment involves identifying and evaluating how and why current and projected environmental changes affect or will affect strategic management of the organization

Linkages among the stages

Objectives of Environmental Analysis

Understanding of current and potential changes taking place in the environment Provide inputs for strategic decision making
Strategy Formulation Strategy Implemented

Environmental Scanning

Evaluation And Control

Facilitate and foster strategic thinking in organizations

Benefits of Environmental Study

Development of broad strategic and longterm policies of the firm Development of action plans to deal with technological advancements To foresee the impact of socio-economic changes at the national and international levels on the firms stability To keep oneself dynamic

Limitations of Environmental Analysis

Does not foretell the future Does not eliminate uncertainty It is not sufficient guarantor of organizational effectiveness Uncritical faith in the data without the datas verifiability or accuracy Overloading of information

Some Cases

HDFC

Environment Changes: Competition, Government policy-dilly-dally, confusing signals Strategic Response: Finance to corporate sector for office premises, series of joint ventures and wholly owned subsidiary HDFC developers Consequences: Great success

HUL

Environment Changes: Competition, Liberal Policies Strategic Response: Took advantage of new takeover & merger codes Consequences: Acquired Kissan from UB group, Lakme from Tata, Modern foods from government.