Business Environment Slides
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Transcript of Business Environment Slides
![Page 1: Business Environment Slides](https://reader034.fdocuments.us/reader034/viewer/2022051515/5527127955034616368b466a/html5/thumbnails/1.jpg)
BUSINESS ENVIRONMENT IN AN ECONOMY HAS THREE BASIC PROPOSITIONS:
BUSINESS IS AN ECONOMIC ACTIVITY
BUSINESS FIRM IS AN ECONOMIC UNIT
BUSINESS DECISION-MAKING IS AN
ECONOMIC PROCESS
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ECO. ENVT.
NON- ECO. ENVT.
BUSINESS ENVIRONMENT
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ECO. ENVT
NATIONAL GLOBAL
BUSINESS
POLITICALNATURAL
SOCIO-CULTURAL
NON-ECO. ENVT
LEGAL
TECHNOLOGICAL
DEMOGRAPHIC
MACRO- ENVIRONMENT OF BUSINESS
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MICRO- ENVIRONMENT OF BUSINESS
INPUT SUPPLIERS
WORKERS & THEIR UNIONS PUBLIC
BUSINESS
CUSTOMER COMPETITORS
MARKET INTERMEDIARIES
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INTERNAL ENVT.
MICRO/MACRO EXTERNAL
ENVT.
BUSINESS
• SOCIAL ENVT.
• POLITICAL ENVT.
• LEGAL ENVT.
• GLOBAL ENVT.
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BUSINESS SECTOR HAS TO DEAL WITH:
GOVERNMENT
IT DEPENDS UPON THE TYPE OF GOVT. IN A PARTICULAR ECONOMY
THE BASIC PROBLEM OF EVERY ECONOMY IS:
Contd..
CAPITAL MARKET
HOUSEHOLD SECTOR
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ALLOCATION OF RESOURCES & SUBSEQUENT PRODUCTION i.e.
DUE TO OPEN UP OF THE ECONOMY:
WHAT TO PRODUCE
HOW TO PRODUCE
WHOM TO PRODUCE
WHEN TO PRODUCE
• ENGAGED IN INT. TRADE AND COOPERATION
• TECHNICAL REVOLUTION
• ROLE OF MNC
• ECOLOGICAL BALANCE
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ROLE OF THE GOVT. TOWARDS SOCIAL SECTOR
IS IT GOVT. ONLY? OR
WHO COULD BE THE OTHER PLAYERS:
•PRIVATE SECTOR
• NGO’S
• SOCIAL ACTIVIST/ORGANISATIONS
• INTERNATIONAL BODIES
THEREFORE, MANAGER SHOULD KNOW ABOUT THE
MAGNITUDE AND DIRECTION OF CHANGES AT NATIONAL
AS WELL AS AT INTERNATIONAL BUSINESS
ENVIRONMENT.
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WHAT ARE THE CRITICAL ELEMENTS OF ECO. ENVT. OF BUSINESS
• INSTITUTIONAL FRAMEWORK:
RELATIVE ROLES & RESPONSIBILITIES OF THE
PRIVATE SECTOR
PUBLIC SECTOR
GOVT.
Contd…
• PHYSICAL ANATOMY OF NATIONAL ECONOMY:
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LEVEL OF PCI INDICATE THE LEVEL OF GROWTH & DEVELOPMENT
AVAILABLE NATURAL, HUMAN & MATERIAL RESOURCES OF A COUNTRY.
OCCUPATIONAL DISTRIBUTION OF LABOUR
FORCE, PATTERN OF FOREIGN TRADE,
STRUCTURE OF SAVINGS, INVESTMENT &
CAPITAL FORMATION, PATTERN OF INCOME
DISTRIBUTION & THE DEGREE OF
URBANISATION.
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• FUNCTIONING OF THE ECONOMY:
NATURE OF MONETARY TRANSACTIONS AFFECT THE PRICE LEVEL-WHICH INFLUENCE THE REAL VALUE OF ALL ECONOMIC VARIABLES.
ROLE OF CENTRALISED PLANNING,
ADMINISERED PRICE MECHANISM & FREE
MARKET PRICING & CENTRAL BANKING.
• ECONOMIC PLANNING & PROGRAMMES
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• ECONOMIC POLICY STATEMENTS AND LEGISLATIONS:
POLICY STATEMENTS AFFECTING BOTH
INDUSTRY AND AGRICULTURE
RBI WORKS THROUGH THE INSTRUMENT OF
MONEY AND CREDIT POLICIES
GOVT. CONTROLS THROUGH FISCAL-CUM-
BUDGETARY POLICIES.
• FLUCTUATIONS & TRENDS IN MACRO-
ECONOMIC VARIABLES:
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• ECONOMIC PROBLEMS & PROSPECTS:
INFLATION/RECESSON
UNEMPLOYMENT
NON-ECONOMIC ENVT. OF BUSINESS
POLITICAL ENVT. OF BUSINESS:
• GOVT. IS A POLITICAL INSTITUTION:- ENACTS & EXECUTES SOCIAL POLICIES IN ORDER TO MAXIMISE SOCIAL BENEFITS & MINIMISE SOCIAL COSTS.
• IN THE PRESENT GLOBAL BUSINESS SCENARIO, GOVT. POLICIES, PROGRAMMES & LEGISATIONS AFFECT THE BUSINESS MOST.
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CRITICAL ELEMENTS:
• FROM & STRUCUTURE OF THE GOVT.
• STRENGTH OF THE OPPOSITON IN LEGISLATURE
• ROLE & RESPONSIBILITY OF THE BUREAUCRACY
• DIRECTION & SPEED OF THE GOVT.
• POLICIES & PROGRAMMES.
• SOCIO-ECONOMIC LEGISLATIONS
• POLITICO-LEGAL INSTITUTIONS
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SOCIO – CULTURAL ENVT. OF BUSINESS:
• BUSINESS MUST CHARGE SOCIAL RESPONSIBILITY, SOCIAL OBLIGATION & SOCIAL COMMITMENT
CRITICAL ELEMENTS:
• SOCIAL INSTITUTIONS & SYSTEMS: CASTE SYSTEM, JOINT FAMILY SYSTEM, CHILD MARRIAGE ETC.
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EVOLVED THROUGH HISTORY, CULTURE & HERITAGE.
• SOCIAL VALUES & MOVES: WHICH HAVE GONE FOR RAPID CHANGES
CUSTOMS, TRADITIONS & CONVENTIONS ARE NOT RIGID ANYMORE.
VIEWS TOWARDS AUTHORITY, RESPONSIBILITY & DELEGATION OF POWER.
VIEWS TOWARDS ACHIEVEMENT & WORK
VIEWS TOWARDS OWNERSHIP & MANAGEMENT
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THEREFORE, THERE IS A NEED FOR BUSINESS EDUCATION & ITS IMPACT ON BUSIENSS ETHICS, BUSIENSS MORALITY & ORG. CULTURE. SOCIAL RESPONSIBILITY OF THE GOVT.
SOCIAL GROUPS & SOCIAL MOVEMENTS:
SHOULD CREATE BUSINESS CLIMATE THROUGH SOCIAL MOVEMENTS & SOCIAL POLICY FORMULATLION ON SUBJECTS LIKE: SCIENCE & TECHNOLOGY
ECOLOGY & FORESTRY
FAMILY PLANNING ETC
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SOCIAL PROBLEMS & PROSPECTS:
AS SOCIETY MOVES FROM ‘PRE-INDUSTRIAL’ TO ‘POST INDUSTRIAL’ STAGES OF DEVELOPMENT IT MAY EXPERIENCE:-
GROWING UNEMPLOYMENT & POVERTY
POOR HOUSING & SANITATION
PRESSURE ON INFRASTRUCTURE
URBAN CONGESTION, POLLUTION & INCREASING INCIDENCE OF ANTI-SOCIAL ACTIVITIES.
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WHAT IS NEEDED?
SOCIAL COST-BENEFIT ANALYSIS OF INDUSTRIAL DEVELOPMENT.
ECONOMIC ROLES OF THE GOVERNMENT:
• AS A REGULATOR
•AS PROMOTOR TO BUSINESS
•AS A GOOD ENTREPRENEUR &
•A VERY EFFECTIVE PLANNER