Introduction to business environment

Introduction

• Economic & social activity• Provides Goods n services to society• Earlier profit oriented then converted to

Customer oriented and now Societal Oriented• Basis of need satisfaction • Narrow in terms of environment hence has to

adapt to changing environment

Definition of business

• The activity of buying and selling goods, manufacturing goods or providing services in order to make profit. “

• Business is an institution organized and operated to provide goods and services to society under the incentives of private gain”- Wheeler B .O

Features /characteristic of business• Buying selling activity• Continuous in nature• Deals with goods and services• Activity for private gain• Risk & uncertainty involved• Supports Society • Creativity & innovation • Takes from the society• Employment generation

Function / needs of business

• Regular supply Goods & Services• Satisfaction Of Need & wants• Optimum use of natural resources• Better standard of living • Must for growth of economy• Revenue to govt• Employment generation

Role of Business

What is business environment?

• Business environment is “the total of all things external to firms and individuals, which affect their organization and operations”

– B.O Wheeler• Business environment “ Consist of all external

and internal factors that influence the complex interaction of the market, production and finance, the three basic components of our business world.” – Joseph A Kriz & Curtiz J Duggan

Characteristics/ Features of business environment

• Broadly divided in two component• Surrounding Situation• Complex & dynamic in nature• Multi-faceted • Study involved-as varied aspect• Influences business activity• Must be adaptable • Creates framework for planning• Challenging & opportunity oriented • Direct & lasting effect• Business is inseparable

Significance / importance/ need of study of business environment

• Recognize opportunity & threat • Ensures optimum use of resources • Accuracy in decision making• Helps adapt to changing dynamics• Stability, growth, survival• Makes business socially acceptable• Study level of competition

Classification of Business Environment

Business Structure