BUSINESS ENVIORNMENT

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Saurabh Garg

SYLLABUS
Nature, Components and determinants of business Environment, dynamics of business environment, key indicators; Risk in business environment Indias share in world economy.

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Saurabh Garg

 Current state of business environment in India; Economic reforms- Liberalization, privatization, globalization Industrial policy and industrialization trends, public enterprise reforms

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Saurabh Garg

 Indias current balance of payment position, globalization trend, Trade reforms& trends Trends in global trade & investment; Nature & Operations of multilateral economic institutions-

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Saurabh Garg

 Suggested Readings: Daniel, John D and Radebangh, Lee H International Business. 5th ed., New York, Addison Weley,1989 Charles W. Hill, International Business Fourth edition, Tata McGraw Hill, Publications Companies.
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 A.K. Sundaram/J. Stemart Block, The International Business Environment, PHI Mishra & Puri, Indian Economy, Himalyan Ruddardutt & Sundaram, Indian Economy

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Saurabh Garg

 Bedi, Suresh, Business Environment Cherunillum, Francis, Business Environment Goyal Alok, Business Environment

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Saurabh Garg

an economic activity because it includes all those activities whose purpose is to earn profit by transfer of goods & services.

Business is

Business Environment consists of all those factors that have a bearing on the business.
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 The survival and success of a firm depends on two sets of factors : Internal Factors : Internal Environment External Factors : External Environment

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Saurabh Garg

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Business Environment

si ess
I ter al Stre gths viro me t Weak ess

viro me t
xter al pport ities viro me t hreats

Components of Business Environment

Internal Environment

Business Decisions

External Environment

VALUE SYSTEM

MISSION & OBJECTIVE

MANAGEMENT STRUCTURE & NATURE

ATTITUDES

INTERNAL BUSINESS ENVIRONMENT

INTERNAL POWER RELATIONSHIP

OTHER FACTORS

COMPANY IMAGE & BRAND EQUITY

HUMAN RESOURCE

Internal Environment
Miscellaneous Factors

 Physical Assets & Facilities  R&D Technological Capabilities  Marketing Resources  Financial Factors

External Environment

External Environment
Micr ir e t Macr ir e t

Micro Environment
Micro or task environment is more specific and immediate environment in which an organization conducts its business. -Dunham & Pierce

1. Supplier
 Reliability  Multiple Supplier

2. Customer
 Types of Customers
Industrial Customers Institutional Customer Foreign Customer Retail Customer
Multiple Customer Globalization Customer Segmentation

3. Market Intermediates
 Types of Market Intermediates
Middlemen Marketing Agencies Financial Institution Physical Intermediates

4. Public
Media Publics Local Public

MACRO ENVIRONMENT
 Economic  Political  Social-Cultural  Technological  Natural  Demographic  International

 MACRO ENVIRONMENT means general

environment of business. Macro factors are uncontrollable in comparison to the micro forces of environment. The growth and survival of business depend upon its adaptability to macro environment factor which include

1. ECONOMIC ENVIRONMENT
Economic Conditions Boom Depression Economic System Capitalist Socialist Mixed Economy Economic Policies Monetary Policy Fiscal Policy Foreign Trade Policy Foreign Investment Industrial Policy

2. POLITICAL ENVIRONMENT
Political Ideology of Govt. Political stability in the Economy. Foreign Policy of Govt. Defense & Military Policy. Centre state relationship.

Political Environment
Politcal Environment
Political yste Constit tion Environment
Pre le e t l Ri ts

Le isl t re
Exec tive

ici ry

Directives Pri ci les f St te Policy

3. Socio-Cultural Environment
 Urbanization  Religion  Tastes & Preferences  Customs & Tradition in Society  Health & Quality of Life  Language

4. Technological Environment
 Innovation  Research & Development  Inflow of foreign Technology etc.

5. Natural Environment
 Climatic & weather condition.  Availability of Natural resources.  Topographical factors: Physical features of place.  Pollution Control

6. Demographic Environment
 Age Composition  Sex Composition  Education Level  Family size & structure  Urban-rural population

7. International Environment
 Globalization  Oil Price hike  International Terrorism  Cultural Exchange

Importance of Business Environment

 For incorporating dynamic behavior of environment  Complete knowledge of internal environment  To understand international events, pressures& impact  Economic policies of the govt.  To face business problems &challenges  Vigilant regarding dangers  Administrative system  Optimum utilization of resources  Market conditions  Scientific & industrial advancement  Development & success of business