BUSINESS ENVIRONMENT

ENVIRONMENT REFERS TO ALL FACTORS WHICH HAS A

BEARING ON THE FUNCTIONING OF A BUSINESS UNIT.

IT MAY BE INTERNAL AND EXTERNAL

INTERNAL ENVIRONMENT

• Promoters & shareholders value• Mission /Objectives• Mgnt. Structure• Internal power relationship• Co. Image/Brand Image• R&D , Technology• Human Resources• Marketing Capabilities

EXTERNAL ENVIRONMENT

• 1.Micro/Task/Operating environment

• 2.Macro/General/Remote/Uncontrollable

EXTERNAL ENVIRONMENT

• Economic factors• Political environment • Social/Cultural factors• Demographic factors• Natural factors• Technological • Global factors

ECONOMIC ENVIRONMENT

• Recently it is complex. Determined by govt, capital market, household sector, global market etc. It consists of economic conditions, economic systems, economic policies, economic growth, interest rates, currency exchange rates

ECONOMIC CONDITIONS

• Determined by national income, percapita income, economic resources, distrn of income and assets, economic development etc. business cycles and economic growth are also important in the eco.conditions and in turn environment

ECONOMIC SYSTEM

• CAPITALIST (FREE MARKET ECONOMY)

• SOCIALIST/COMMUNIST(CENTRALLY PLANNED)

• MIXED ECONOMIC SYSTEM – INDIA’s

ECONOMIC POLICIES

• The policies throuth:-– Budgets– Industrial regulations– Economic Planning– Business laws– Industrial policy– Demand and supply of goods– Monetary policy– Fiscal policy, Balance of payments, LPG

GOVTS REGULATE BUSI. THROUGH

• Factories Act 1948• Industrial dispute act 1947• FERA1947 --FEMA• Companies act 1956• Export import control act• Interest rate/borrowing rate Currency

exchange rate –Rupee value

MONETARY POLICY

• RBI’s steps to regulate & control the cost and supply of money and credit , Credit control, bank rate, open market operation, CRR, SLR, qualitative techniques of credit control etc.

FISCAL POLICY

• Policy regarding

–Taxation–Public expenditure–Public debt

POLITICAL ENVIRONMENT

• Legislature• Executive• Judiciary• Impact of defence and military policy, Political

stability, President’s rule, emergency, philosophy of political parties, Foreign policy, like allignment of non allignment policy, loan from IMF, ADB, ASSEAN agreement etc.