1.1 Business Environment

8/7/2019 1.1 Business Environment

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BUSINESS ENVIRONMENT


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Environment of a business means the external forces

influencing the business decisions. They can be forces of

economic, social, political and technological factors. Thesefactors are outside the control of the business. The business

can do little to change them.

BUSINESS ENVIRONMENT

MEANING


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FEATURES OFBUSINESS ENVIRONMENT

Totality of external forces

Specific and general forcesDynamic nature

Uncertainty

Relativity


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IMPORTANCE BUSINESS ENVIRONMENT

firm to identify opportunities and getting the first mover advantage

firm to identify threats and early warning signals

Coping with rapid changes

Improving performance


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GENERAL ENVIRONMENT OF A BUSINESS

Economic environment

Social environment

Political environment

Legal environmentTechnological environment


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ECONOMIC ENVIRONMENT

i. Economic conditions- GDP, Business Cycle,Unemployment, Inflation, Balance of Payment, Fiscal Policy,Monetary Policy, Exchange rate Policy, Interest Rate.

ii. Economic policies

a) Budget

b) Industrial policy

c) Trade policy

d) Agricultural policy

iii. Economic system- Capitalistic, Socilalitic, Mixed


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SOCIO CULTURAL ENVIRONMENTi. Attitude of people towards work and health.

ii. Role of family.

iii. Marriage.iv. Religion.

v. Education

vi. Ethical issues

vii. Social responsibility of business


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POLITICAL ENVIRONMENT

i. Legislature - Labour Laws like Factories Act, EPFAct, ESI

Act, Industrial Disputes Act, Minimum Wages Act, Payment of

Wages Act, etc

MRTP Act, Law of Contracts, Companies act, IDRA Act,FERA, Import & Export Control act, Tax Laws

i. Executive- Administrators

ii. Judiciary - District, High Courts, Supreme Court, Tribunals


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TECHNOLOGICAL ENVIRONMENT

i. Nature of technology

ii. Scope for innovation


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ECONOMIC ENVIRONMENT IN INDIA

Liberalization

Privatization

Globalization

New industrial policy in July 1991.


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Impact of Government Policy Changes on Business and

Industry

Increasing competition

More demanding customers

Rapidly changing technological

environment

Necessity for change

Threat from MNC


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India's place in the Global EconomyIndia's place in the Global Economy

y India is

a country of potential.

Cocked slingshot

Target within range of Indian Capability

y

India has Stable economy

Continued economic growth

Governmental regulations changes

FDI enhancements

NRI outreach

Reversal/slowing down of brain drain and welcome home to many

Leveraged IT/ITES Industry strength around the world


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India in the Global MarketIndia in the Global Market

y In general India public and/or private sectorshave: Started work on infrastructure

Leveraged their IT capability to take the lead in theglobal market in this industry

Expanded the reach of their already global Indiancompanies

Built presence in Pharmaceutical, Medical, BioChemical, Cement, Financial, Rubber, Retail,Cosmetic, Design, Entertainment, Garment andfood industries as well as IT.


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India in the Global MarketIndia in the Global Market

y Indias Strengths: Population

Ability to adapt and move beyond obstacles andbarriers with seemingly graceful and instinctive

responses Rising from the inside out on the shoulders and in the

minds of the Indian peoplex pushing the limits of individual contributions and quietly but

methodically leveraging physical and financial global presence

y Indias Goal secure the future that has been thousands of years in

the making.


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COLLEGE GRADUATESAND ENTREPRENEURSCOLLEGE GRADUATESAND ENTREPRENEURS

y Graduates still emerging in significant numbers

not all graduate with the perquisite skills to fill projectedcareer and job opportunities

y The education system in India is

aggressively reaching out to business for advice and support

business is proactively moving into the realm of education

x establishing Academies as part of their corporate structure

x by giving time and energy to nearby Universities andColleges

x building the Vocational Technical Sector of the educationsystem that had not previously been strong.


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y There is still MUCH to do before the future issecure

Accomplished without government interventionor mandate

It is in the hands of the business leaders andprogressive academicians

It operates and even thrives around extremes

HOWEVER


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An Economy in TransitionAn Economy in Transition

y Predicted to change shape by 2025

y From To


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Spawned in the development and growth

of the IT and ITES Service Industry


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What Changed Workplace of 21stCentury

Globalization

Information Revolution/Internet

New technology

HRM Philosophy:


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Parts

PartsParts

Assembly

Advertising Design

Sales

TODAYS BUSINESS REALITIES

A Global Web

Sales

Parts

Sales


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Characteristics of GlobalizationChaoticCompetition

Radical change

Opportunities

Strategic alliances

Complexity/Uncertainty

Flexibility

Customer focus

Saliency of People Mgt Issues

In India these

Developments

Impact all sectorsincluding

Manufacturing


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The intensity of this

will be far greater

in the near term as the velocity of

change is increasing

Indian companies

striving to beGlobal Leaders

in this exciting

Business Environment

1.1 Business Environment

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