1.Indian Business Environment

7/31/2019 1.Indian Business Environment

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PEPARED BY,Jeevitha R

lecturer

Rajeev Institute ofTechnology

Hassan


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Business


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Business is the organized efforts of enterprisesto supply consumer with goods and servicesfor a profit

Business refer to any commercial activitywhich is aimed at making profit

These two definitions make a fundamentalassumption that profit maximization is thebasic objective of every firm

.


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Business , in brief, includes activities

connected with production, trade, transport,

finance, banking, insurance, advertising and

certain other activities related to industry.


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GOVT. INTERFERENCE

COMPETITION

INFORMATION

BIGNESSCHANGE

SCIENCE

DIVERSIFICATION

GLOBALISATION

BUSINESS


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Objectives of Business1. Organic Objectives

Just like human being business is an organic entity.

It has its own introduction, growth, maturity and

declining stages.

The organic objectives of a business firm are

* Survival

* Growth* Prestige or Reputation


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2. Economic Objectives

Profit making

Creation of customers Innovation

3. Human Objectives

The success of any business is depends on its humanresources.

It is necessary for business to look after the interest of thosewho make business successful.

Human objectives include-

* Providing job satisfaction

* Providing opportunity for workers participation inmanagement.

* Providing good working condition

* Providing fair wages


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Social Objectives

Business is a social institution and it is a part of the

society. Each and every business has its obligation towards

customers, investors, supplies, govt. and general

public.

The social objectives of business are

* Quality goods at fair prices

* Providing employment opportunities

*avoiding anti-social practices


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National Objectives

In India business organizations have to fulfill thefollowing obligation-

* Contributing to economic growth of the country.

* Development of small scale and cottage industries.

* Export promotion.

* Ensuring social justice.

* Production according to national priorities.


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s

Business environment consists of all those factorsthat have a bearing on the business

INTERNAL

ENVIRONMENT BUSINESS

BUSINESS ENVIRONMENT


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Business Environment


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Internal Environment

These are controllable factors.

Lies inside the organization

Under the control of the organization.

Internal environment factors can divided as follows-

Value System

Mission and Objectives

Organizational Structure

Human Resources

Company Reputation

Financial Factors


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External Environment

Classified into two categories viz.

1. Micro Environment2. Macro Environment


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Micro Environment

The micro environment is a companysimmediate environment and that affect thecompanys ability to produce goods and

services and serve consumers. Known as task environment or operating

environment

Include suppliers, marketing intermediaries,

competitors, customers and the publics.


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Suppliers

Customers

Competitors

Marketing Intermediaries Publics


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Macro Environment

These factors are external to the firm and are quiteuncontrollable

The growth and survival of business depend uponits adaptability to macro environment factors.

The macro environment generally consists of twofactors viz..

1. Economic environment2. Non-economic environment


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Those Economic factors which have their affect

on the working of the business is known as

economic environment.

It includes system, policies and nature of aneconomy, trade cycles, economic resources, level

of income, distribution of income and wealth etc.

Favorable monetary policies like credit sanction,

interest rate influence the business unit. The fiscal policy of the govt. like tax policy has

its influence on the pattern of business


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Elements of Economic Environment:- It has

mainly five main components:-1. Economic Conditions2. Economic System3. Economic Policies4.

International Economic Environment5. Economic Legislations

For example: A restrictive import policy, or apolicy of protecting the home industries, maygreatly help the import-competing industries,while a liberalization of the import policy maycreate difficulties for such industries.


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. Non-Economic Environment

Non-economic factors consists of following factorsa) Political Environment The nature of policies and the type of the govt.

in economy have considerable influence over the

business environment. The business activities flourish when there is astable govt. in the economy on the other hand ifthe Govt. is unstable and doubtful, it willdemoralize the business and may adverselyeffect on its performance.

Certain changes in the Govt. policies likeindustrial policy, fiscal policy may haveprofound impact on business


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bb) Education and Cultural Environment

The attitude towards education and training helpsbusiness and industry to avail services of efficient,trained and labor.

The cultural factors like buying and consumption habitof the people, customs and traditions, tastes and

preferences, languages etc. are the factors that affect thestrategy of the business.

c) Legal Environment

The vital aspect like of business like who should own?

What should be the size of business? And what shouldbe happen to the earnings? Can be decided by legalrules and regulations.


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There are number of legislations formed by the Govt. toregulate the business.

It is said that the stable Govt will protect the businessby formulating effective legislation .

d) Natural Environment The natural factors like weather climate, availability of

land, forest resources etc. have influence on thebusiness activities.

It is stated that difference in geographical conditionsmay call for changes in production, marketing activitiesin the economy.

The ecological factors like depletion of naturalresources, environmental pollution have cost greaterconcern to the business field, so that preservation ofphysical environment is becoming important factor ofmanagement of modern business.


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e) Demography

Study of the population in terms of age, sex, size

of the population, family size, and occupation isknown as demography.

Rapidly increasing population indicates a growingdemand for many products.

Increasing population also indicates thatavailability of surplus labor which affects thewage rates.


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f) F)Technological Environment l Environment. Technology is a systematic application of

scientific knowledge to practical task. The business prospects largely depend upon the

technological aspects in connection with productionand marketing of products.

The changes in technology also create problem forbusiness enterprises as they are subject to obsolescencequicklyG) International Environment

It refers to those global factors which have impact onbusiness and economy.

It is important for industries which are directlydepending on imports and exports.

Export market enables a firm to develop moreprofitable product mix


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Environmental Scanning

The term Environmental Scanning in businessCarefully analyze the various factors influencingthe business.

Environmental Scanning is not once and for all,rather it is continuous process.

As the business environment is continuouslychanging, management has to continuouslyanalyze and diagnose the environment. It is a

process by which the organizations monitor theirrelevant environment to identify opportunitiesand threats affecting their business.


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Nature of Environmental Scanning

Continuous process

Exploratory process

Holistic exercise


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Scope of environmental scanning

The scope of environmental scanning is

concerned with the type of information

scanned in response to environmental change

or factors.

Purpose of scanning the environment.

The task of the environment and the general

environment.

1.Indian Business Environment

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