Business studies +2 U nit 3
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This document discusses management and business environment topics, including the concept of business environment, its importance, and its dimensions. It covers the economic, social, technological, political, and legal environments. It also discusses the impact of government policy changes in India, specifically related to liberalization, privatization, and globalization. Key factors that influence business are described for each dimension of the environment. Economic reforms introduced in India since 1991 aimed to liberalize, privatize, and globalize the economy to increase competitiveness and economic growth.
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Business studies +2 U nit 3
- 1. UNIT - 3 MANAGEMENT AND BUSINESS ENVIRONMENT
- 2. TOPICS COVERED Business Environment Concept Importance Dimensions of Business Environment Economic Social Technological Political Legal Impact of Government Policy changes on Business with special reference to liberalisation, privatisation and globalisation in India
- 3. BUSINESS ENVIRONMENT Business Environment means the sum total of those factors which influence the business and over which the business has no control.
- 4. BUSINESS ENVIRONMENT “The business environment is the aggregate of all conditions, events, and influences that surround and affect a business firm. Business environment generally refers to the external factors affecting, either positively or negatively, the operation of a firm”
- 5. Totalityof External Forces Specific &General Forces Inter-relatedness Dynamic Nature Uncertainty Complexity Relativity
- 6. IMPORTANCE OF BUSINESS ENVIRONMENT First Mover Advantage Learning about thePossibleOpportunities availableinthe Environment Warning Signals GettingKnowledgeof PossibleThreats intheEnvironment Tapping Useful Resources Knowing theRequirement of Environment
- 7. IMPORTANCE OF BUSINESS ENVIRONMENT Coping with Rapid Changes By Constant vigil over the Business Environment we can easily face the Rapidity of Change Assisting in Planning and Policy Anyone can Defeat their Competitors by formulating their Plans with the Knowledge of Environment Improvement in Performance An Organization can Improve it’s Present as well as Future with it.
- 8. COMPONENTS OF BUSINESS ENVIRONMENT
- 9. INTERNAL ENVIRONMENT Factors which are present within the Business itself and are under the direct control of the Business. These are: Objectives Policies ProductionCapacity ProductionMethod Management InformationSystem ParticipationinMgt. Compositionof Directors Managerial Attitude Organizational Structure Features of HumanResource
- 10. EXTERNAL ENVIRONMENT Factorswhich influencethebusiness andexistsoutsidethe business MICROENVIRONMENT - Whicheffects particular typeof companies MACROENVIRONMENT- WhicheffectsentireBusiness Community
- 11. EXTERNAL ENVIRONMENT MICROENVIRONMENT Customers Suppliers Competitors Public Market Intermediaries
- 12. EXTERNAL ENVIRONMENT MACROENVIRONMENT Economic Environment Social Environment Technological Environment Political Environment Legal Environmen
- 13. 1.ECONOMIC ENVIRONMENT It refers to the combination of economic systems, economic policies and economic conditions of a country. ECONOMIC SYSTEM It influence the freedom and openness of the business. Socialist Economic System. e.g.: China Businesses are Directed and Controlled by Government Capitalistic Economic System. e.g.: USA Importance is given to Private Ownership of Business Mixed Economic System. e.g.: India Businesses are Owned by both, Government and Individuals
- 14. ECONOMIC POLICIES Policies which are laid down to direct the Economic Activities which are as follows: Public ExpenditurePolicy Public Debt Policy AgriculturePolicy Export Import Policy Foreign Investment Policy Employment Policy Taxation Policy Industrial Policy
- 15. (iii) ECONOMIC CONDITIONS Conditionswhich arerelatedwith theEconomic Development of theCountry. Theseare Flowof Foreign Capital Supplyof Natural Resources General PriceLevel Foreign Trade PrevailingInterest rates Per CapitaIncome Industrial Development Level of Economic Development Impact of Economic Environment onBusiness Changes Impacts IncreaseinInterest rate DecreaseinInterest rate IncreaseinIncome DecreaseinIncome DecreaseinDemand of Goods IncreaseinDemandof Goods IncreaseinDemandof Goods DecreaseinDemand of Goods
- 16. 2. SOCIAL ENVIRONMENT It refers to the combination of all characteristics of the society in which the orgnisation exists. Major Elements – Traditions : Diwali, Id, Christmas and Guru Purv Values: Freedom, Social Justice, Equality Social trends: Health and Fitness trend among urban dwellers. Impact of Social Environment on Business - Festivals Values Trend Opportunities for business Social responsibility of business Demand of some special items (mineral water and gym)
- 17. 3.TECHNOLOGICAL ENVIRONMENT It referstoinnovations relatingtovarious business activities Major Elements – Discovering newways of producing goods andservices Discovering newways of operating abusiness Impact of Technological Environment onBusiness Changes Impacts Innovationof TV Innovationof PhotoCopier Innovationof Synthetic Thread Innovationof digital watches Adverse effect on Cinema and Radio Adverse effect on Carbon Paper Industry Adverse effect in Cotton Cloth Industry Adverse effect on Mechanical Watch Industry
- 18. 4. POLITICAL ENVIRONMENT It refers to political conditions in the country and attitude of the government towards business Major Elements Political stability in the country Peace in the country Attitude of Government towards business Type of Government (Single Party/Coalition Government) Ideologies of various political parties Changes Impacts Attitudeof oneGovt. Attitudeof another Govt. Keeninterest of Govt. Against MNC’s In favour of MNC’s Hyderabad – Cyberabad Bangalore – Silicon Valley of India
- 19. 5. LEGAL ENVIRONMENT It refers to the sum total of all the Acts passed by the government, Judgements of the courts, and Decisions rendered by various Commissions and Agencies in the country. Major Elements Acts passed by the government, Judgments of the courts, and Decisions rendered by various Commissions and Agencies Changes Removal of control fromcapital mkt. Relaxation inFDI Impacts Easy collectionof funds Entry of MNC’s
- 20. ECONOMIC REFORMS SINCE 1991 To take the Country out of Economic Difficulties and to Speed up the pace of Economic Development the following vital reforms were introduced: Liberalization Privatization Globalization
- 21. ECONOMIC REFORMS SINCE 1991 1.Liberalization It refers to unshackle economy from bureaucratic cobweb to make it more competitive. It includes: •Freedom in determining the scale of business activities •Freedom to fix the prices of goods & services •Reduction in rate of taxes •Simplifying import export procedure
- 22. ECONOMIC REFORMS SINCE 1991 2.PRIVATISATION An economic process through which some public sector undertaking is brought either partially or completely under private ownership. It includes: •Reducing fiscal burden of the government •Reducing the size of government machinery •Speeding up economic development •Improving management of enterprises
- 23. ECONOMIC REFORMS SINCE 1991 3. Globalization It refers tointegratingtheeconomy with therest of theworld. It includes: • Freeflowof goods &services inall countries • Freeflowof capital inall thecountries • Freeflowof information&technology inall thecountries • Sameconflict solvingtechniques inall countries
- 24. MAJOR STEPS FOR ECONOMIC REFORMS NewIndustrial Policy NewTradePolicy Fiscal Reforms Monetary Reforms Capital Market Reforms Phasing out Subsidies DismantlingPriceControls
- 25. IncreasingCompetition MoreDemanding Customers Rapidly Changing Technological Environment Necessityfor Change Needfor Development of HumanResources Market Orientation Lossof Budgetary Support tothePublic Sector IMPACT OF GOVERNMENT POLICY ON BUSINESS AND INDUSTRY
- 26. Please be free to write query at: Dr.Ramesh C Sharma [email protected] http://rameshchandersharma.blogsspot.in +91-94180-45154