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Title: BUSINESS ENVIRONMENT
Description: Business Environment means the sum total of all individuals or institutions & other forces that are outside the control of a business enterprise but that may affect its performance.
Description: Business Environment means the sum total of all individuals or institutions & other forces that are outside the control of a business enterprise but that may affect its performance.
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BUSINESS ENVIRONMENT
Meaning of Business Environment:- Business Environment means the sum total of all
individuals or institutions & other forces that are outside the control of a business
enterprise but that may affect its performance
...
Change in Business Environment
Increase in Tax
Increase in Competition
Change in Fashion, Taste of Consumers
Technological Improvements & innovations
Political Uncertainty
Effect on Performance of the Business
Increased in Cost of production , things
becomes expensive
Reduction in Profit
Market Demands shifts from Existing to new
ones
...
DIMENSIONS/COMPONENTS/ELEMENTS OF BUSINESS
ENVIRONMENT
The various dimensions of Business Environment in terms of general Environment are:1
...
Example of Economic Environment: High Inflation rate generally results in constraints on business enterprises as
they increase the various cost of business such as purchase of raw materials,
or machinery & payment of wages & salaries to employees
...
Components of Economic Environment
Tax Rates
Rates of Saving & Investments
Rates of Economic Growth in terms of increase in gross national product & per capita
income
...
Money Supply in the Economy
...
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2
...
Example of Social Environment: Social trends present various opportunities & threats to a business
enterprises
...
of dwellers
...
In business
terms, these values translate into freedom of choice in the market, business
responsibility towards the society & non-discriminatory Employment practices
...
Concern with quality of life
...
Educational system & literacy rates
...
Political Environment: It includes political conditions such as: General stability of
the government, peace in the country & specific attitudes that selected government
representatives hold towards business
...
Political Instability can
shake that confidence
...
Political parties & their ideologies
...
Nature & Extent of Government Intervention in business
...
Legal Environment: Legal Environment consists of various legal rules & regulations
relevant to business which are to be observed by business organizations
...
For Example: As per the Weight & Measurement Act 2000, packed eatables should
clearly bear a green dot for vegetarian contents & a brown dot for non- vegetarian
contents on their packaging
...
Court orders related to business
...
Technological Environment: Technological Environment refers to the state of
technology used in different businesses, including support technology
...
Components of Technological Environment
Pace of technological changes
...
Extent of use of particular technological advances like internet, electronic
banking etc
...
Totality of External Forces:- Business Environment is the sum total of all the things
external to business firms
...
2
...
3
...
For example: Increased life expectancy of people & increased awareness for
health care have increased the demand for many health products like diet coke, fat-free
cooking oil etc
...
Dynamic Nature: Business Environment is dynamic as it keeps on changing
whether in terms of technological improvement, shifts in consumer preferences or entry
of new competition in the market
...
Uncertainty: Business environment is largely uncertain as it is very difficult to
predict future happenings, especially when environment changes are taking place too
frequently as in the case of information technology or fashion industries
...
Complexity: Business Environment is complex since it consists of numerous
interrelated & dynamic conditions or forces which arise from different sources
...
Relativity: Business Environment is a relative concept since it differs from country to
country & even region to region
...
Similarly, Demand for sarees may be fairly high in India
whereas it may be almost non-existence in France
...
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Early identification of opportunities helps the firms to be the first to exploit them
instead of losing them to competitors
...
It helps the firm to identity threats & early warning signals: ‘Threats’ refers to
the negative external trends & changes that will hinder a firm’s performance
...
It helps in assisting in planning & policy formulation: Planning process is
undertaken in the context of business environment properly, an organization may
undertake its planning & policy formulation realistically
...
It helps in tapping useful resources: A business firm assembles various
resources called inputs like finance, machines, raw materials etc from its
Environment including financiers, government & suppliers
...
The enterprise
designs policies that allow it to get the resources that it needs so that it can convert
those resources into outputs that the environment desires
...
Understanding of
business environment helps an organization to cope with such changes by doing
things through Innovations
...
Therefore it switch
Title: BUSINESS ENVIRONMENT
Description: Business Environment means the sum total of all individuals or institutions & other forces that are outside the control of a business enterprise but that may affect its performance.
Description: Business Environment means the sum total of all individuals or institutions & other forces that are outside the control of a business enterprise but that may affect its performance.