8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
1/18
INDIAN BUSINESS
ENVIRONMENT
FUNDAMENTALS OF BUSINESS
&BUSINESS ORGANISATIONS
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
2/18
BUSINESS
Business may be understood as the organizedefforts of enterprises to supply consumers withgoods and services for a profit.
Or
It may be understood as the organized efforts ofenterprises to earn profit. Business may be smallor big in size but all of the aim at making profit.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
3/18
BUSINESS ENVIRONMENT
It can be defined as the forces, factors and institutionswith which the businessman has to deal with to achievethe objectives.
OR Business Environment is the surroundings in which
business exists. Whenever any businessman is operatingor working then he has to interact with customers,
suppliers and he has to perform the transactions with inthe rules and regulations of the government. All thesepersons, institutions and policies form a part ofbusiness environment
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
4/18
BUSINESS ENVIRONMENT
Definitions:
Environment of the Business means theaggregate of all conditions, events and influences
that surround and affect it.Keith Davis
Business Environment is the total of all
things external to firms and individuals whichaffect their Organization and operations.
B.O. Wheeler
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
5/18
TYPES OF BUSINES
ENVIRONMENT
There is two types of business environment:
Internal Environment
These are generally regarded as controllable factorsbecause the company has control over these factors.
External Environment
These are the one which are beyond the control of acompany.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
6/18
Internal Environment
Value SystemThe values, beliefs and the acceptance of it by the
founders has important bearing on the choice of
business, the mission and objectives of theorganization, business policies and practice.
Management Structure and Nature
The organizational structure, the compositionof the Board of Directors, extent ofprofessionalisation of management etc. are theimportant factors influencing business decisions.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
7/18
Internal Environment
Internal Power Relationship
The Support of the Top management to its different
employees and vice-versa i.e. the support the topmanagement enjoys from different levels of employees,shareholders. Board of Directors have importantinfluence on the decision and their implementations.
Human Assetsthe competence, morale and motivation of employeeshave a significant impact in the success of the firm.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
8/18
Internal Environment
Company Image and Brand Equity
The image and brand equity of the company plays asignificant role in raising finance, forming alliance,
choosing dealers and suppliers, launching of newproducts entering foreign markets.
Mission and Objectives
The business philosophy and the purpose of a companyguide its priorities, business strategies, product marketscope and its development process.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
9/18
External Environment
It consist :
Micro Environment
Micro environment is also known as Mask environment and the
Operational environment because the micro environmentalforces have direct impact on the operations of the firm.
Macro Environment
Macro environment refers to the general environment or remote
environment with in which a business firm and forces in itsmicro environment operate.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
10/18
Micro Environment
Suppliers of inputsCompanys success to a great extent depends upon the
low cost production of goods. This can be ensured byuninterrupted supply of inputs, particularly raw
material.Customers
A business exists to create and satisfy customers. Afirm may have customers like individuals customer,
households, government departments, commercialestablishments. In order to be successful a companymust understand and meet the needs and expectationsof its customers.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
11/18
Micro Environment
CompetitorsA company may face direct as well as indirectcompetition. Direct competitors are the forms whichoffers the same or similar products and services. e.g.
Sony TV faces direct competition from other brandslike Samsung, Onida, BPL.
Marketing IntermediariesMiddlemen like agents, wholesalers, retailers serve as a
link between the company and its customers.Advertising agencies, marketing research agencies etc.are other types of marketing intermediaries.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
12/18
Micro Environment
Financiers
Debenture holders, shareholder financial institutionsprovide financial assistance to the firm. Financial
capacity, polices and attitude of financiers are importantfactors for the company.
Publics
A public is any group that has an actual or potential
interest in or impact on an organization ability toachieve its interest. E.g. Media group, Non-governmentorganization
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
13/18
Macro Environment
Global Environment
it refers to those global factors which are relevant tobusiness as the WTO principles and agreements,
International conventional/treaties/agreement/declarations/protocols etc. economic and businessconditions etc. exp. If the economic conditions in acompanys export prospects are generally very good
and vice-versa. Recession in other countries canincrease the import threats, including dumping.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
14/18
Macro Environment
Political and Legal Environment
Political environment serves as the regulatoryframework of business main constituents ofpolitical and legal environment are:
o Image of the country and its leaders.
o Defence and military policy.o Laws governing business.
oThe constitution of the country.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
15/18
Macro Environment
Economic and Financial Environment :
o for business the economic system is a parameter andthe business has no choice but to adjust itself with in
the fram3work of the given economic system.o The nature of economic system is capitalist, socialistand mixed economy.
o Economic Policies- i.e. the industrial policy, monetary
policy, fiscal policy.o Economic infra-structure
o The markets and their factors which affect the market.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
16/18
Macro Environment
Technological and physical Environment
The main components of technological andphysical environment are
o Research and development (R&D) systems.
o Rate of technological changes.
oApproaches to production of goods and service.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
17/18
Macro Environment
Social and cultural Environment
Social environment refers to the characteristics of thesociety in which a business firm exist and operates.
Social and cultural factors include:o Religion
o Caste, Traditions, Norms, Beliefs.
o taste and preferences of customers
o Social and Non-government organization
o Education system.
8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt
18/18
Macro Environment
Natural Environment
o Population and its density
oAgriculture resourceso Natural resources
o Ecological system
o Climatic conditions under which the firmoperates.