BUSINESS ENVIRONMENT

The Business Enterprise is a part of society and the business environment has direct relationship with the business. The environment may impose various constraints on business, where business enterprises do not have any control on environment. Therefore adaptability to the environment is essential for any business. The term Business Environment consists of two different words
Business and Environment.

According to Boono and Krutz, Business comprises of all profit seeking activities that provides goods and services necessary to an economic system. It is economic pulse of the nation. Profit is a mechanism for motivating these activities.
Environment refers to all external factors which have a bearing on the functioning of business. These are primarily beyond the control of the management.

According to William F Glucck and Lawrence R Jaunch, The environment includes factors outside the firm which can lead to opportunities for the threat to the firm. The most important of these factors are socio-economic, technological, suppliers, competitors and the government Thus , business to environment refers to those aspects of the surroundings of business enterprise which affect or influence its operations and determine its effectiveness and success.

According to Keith Davis,

Business Environment is the aggregate of all conditions, events and influences that surround and affect it.

Significance of the study of Business Environment It helps in developing broad strategies and longterm policies of the firm. It gives information about changes taking place in the environment so that necessary adjustments can be done. It is essential for the development of the action plans to deal with technological advancements. It helps in the analysis of competitors strategies and formulation of the effective counter measures. The study also helps in the expansion of business. Knowledge about the changing environment keeps the organisation flexible and dynamic in its approach.

Environmental Analysis When a decision is made in the business, one need to have a clear identification of the relevant factors and an in-depth analysis of them to understand their impact on the organisation. For Example: What is the impact of globalisation on a company? What are threats and what are the opportunities of it? A thorough analysis of the environment should be done, in order to understand it.

The process of Environmental Analysis is challenging and time consuming. It consists of four steps Scanning It is the process of analysing the environment for the identification of the factors which has an impact on the business. Such factors may include those which have appeared suddenly or have evolved over a period of time. Monitoring The effort here are more focused and systematic than in scanning. For example : A new life-style pattern may include changes in education, entertainment, consumption, work habits. In initial stage, the pattern may be vague, as it is the output of scanning, and so the analyst has to further study it, in order to make certain predictions.

 Forecasting Forecasting means anticipating the Future. In this stage the opportunities and threats of each and every factors are examined thoroughly and plans are formulated accordingly.

Assessment The purpose of environmental analysis is to assess the impact of the environmental factors on the business. In this stage the environment is understood and also understanding is made that what environment means for the organisation.

Social Responsibility of Business

Business takes input from the society in the form of men, material. Business also depends on the society for market, where products may be sold. Thus business depends on the society for existence, sustenance and encouragement. Being so much dependent on the society, business has definite responsibility towards society. Popularly called the Social Responsibility of Business or Corporate Social Responsibility.

According to Howard R Bowen Social Responsibility of business refers to the obligation of business to pursue those policies to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of the society. According to K. R. Andrews Conceptually social responsibility may be taken to mean intelligent and objective concern for the welfare of the society

 The concept of social responsibility is not new to our country.

In the olden days, whenever there was a famine, the leading businessmen of the area would literally throw open their godowns and their treasure to provide food and assistance to the needy, built and supported temples, dharmshalas, bathing ghats, water tanks and wells.

Firsts of TATAs towards employees

FACILITIES Free Medical Aid TISCO INTRODUCTION 1915 ENFORCED BY LAW 1948 LEGAL MEASURES Employees State Insurance Act Gratuity Act

Gratuity Act

1937

1972

Leave with Pay

1920

1948

Factories Act

Provident Fund

1920

1952

Employees Provident Fund Act Maternity Benefit Act

Maternity Benefit Act

1928

1961

Arguments for Corporate Social Responsibility 1.Changed Public Expectation of Business 2.Better environment for business 3.Public Image 4.Avoidance of government regulations. 5.Moral Responsibility 6.Prevention is better than cure 7.Globalisation

Arguments against CSR Late Dhirubhai Ambani was opposed Corporate Social Responsibility !!!

to

He said As an industrialist my job is to produce goods to satisfy the demand. Let us be very clear about it. Everyone has to do his job. My commitment is to produce at the cheapest price and the best quality. If we cannot take care of our shareholders and employees and start worrying about the world, then that is hypocrisy.

1. Profit Maximisation 2. Lack of social skills 3. Druckers View

Need for Social Responsibility Public Image : To earn goodwill and reputation for the business Survival and growth : Business is a part of society. Consumer awareness: It has become obligatory for the business to protect the interest of the consumers by providing high quality products at the most competitive prices.

Helping Flood Victims in India

After a 2009 flood in Southern India destroyed homes, schools, and crops, Cisco adopted five of the hardest-hit villages--rebuilding homes and schools and connecting residents to healthcare and education in distant cities through network technology.

Cisco pledged US$10 million in cash, services, solutions, and equipment to support reconstruction and rehabilitation in these five villages. Project Samudaya, which means community in Sanskrit, included: Building 3000 homes, 2 schools and 1 primary healthcare center Connecting villagers to doctors and specialists 400 kilometers away in Bangalore through Cisco HealthPresence Teaching children supplementary courses in English, mathematics, science, and social science through the Cisco Education Enabled Development (CEED) platform