kinds of business environment

7/29/2019 Kinds of Business Environment

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KINDS OF BUSINESS

ENVIRONMENT


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BUSINESS ENVIRONMENT

Comes from :

Business

Environment

Def - set of conditions : Social, Legal, Economical,

Political or Institutional

uncontrollable in nature

affects the functioning of organization.


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COMPONENTS

Internal

External - Government and Legal factors, Geo-

Physical Factors, Political Factors, Socio-

Cultural Factors, Demo-Graphical factors etc


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INTERNAL ENVIRONMENT

MAN

MATERIAL

MACHINERY

MONEY

MANAGEMENT


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EXTERNAL ENVIRONMENT

2 TYPES :

Micro /Operating :

Suppliers

Customers,

Market Intermediaries,

Competitors

Public.


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- Macro /General

Economic Environment: - complex and dynamic in nature

, keeps on changing with the change in policies or politicalsituations.

3 elements:

(i) Economic Conditions of Public

(ii) Economic Policies of the country(iii)Economic System

(iv) Other Economic Factors: Infrastructural Facilities,

Banking, Insurance companies, money markets, capital

markets etc.


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Non Economic Environment :

(i) Political Environment(ii) Socio-Cultural Environment

(iii) Technological Environment

(iv) Natural Environment(v) Demographic Environment

(vi) International Environment


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Characteristics:-

Business environment is compound in nature.

Business environment is constantly changing process.

Business environment is different for differentbusiness units.

It has both long term and short term impact.

Unlimited influence of external environment factors.

It is very uncertain. Inter-related components.

It includes both internal and external environment.


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CONTROLLABLE ENVIRONMENT

(INTERNAL )

This Environment focuses on the attributes thatadd up to structure of the organization, thereason for its existence.

They can be controlled in the sense that theorganization dictates the quantity and howmuch to be used depending on their availableresources and therefore differ from different

organizations. The five attributes are the major make-up of the

organization and without them, it is dormant toall its operations.


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Labor points out the human resources, the actual workers who provide physical

or intellectual contribution to the everyday activities within the organization.

Raw Material is the physical bits and pieces that are provided by suppliers to

manufacture the companys end products.

Equipment refers to the machinery or devices that play a role into converting the

raw materials to finished end products.

Capital is the cash flow or the monetary aid the organization needs to acquireand achieve its goals, it is the most important because it keeps the other

attributes active and functional.

Last but not least, the Entrepreneur who are directly involved in the

organizations operations.


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CHANGING NATURE OF

ORGANIZATION

Nokia is a public limited organization that is privately

owned by group of Individuals.

Such organizations consist of seven shareholders but

of a large number of investors. They can have two

directors who can retire at age of seventy.

Nokia practices a free trade shares with investors

who can contribute capital into the organization sothere is easy transfer of shares but too many

stakeholders may lead to weak control of the

business.


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INDIVIDUAL AT WORK

As far as Nokia is concerned, the physical character is not much ofcriteria to be strict about;despite the gender, age, body size andtheir race as long as the employees perform their jobs well.

Nokia branch offices set up events to embrace the celebrations ofdifferent cultures from respective nations just to make them feel athome.

However, Nokia takes note on Employeesability and personality.

Different tasks and department require special abilities that are not

equal thus not every employee can possess. For example the R&D department will require employees who are

creative and innovative; likewise, the Logistic department willrequire ones who are good at computing and analyzing vast figures.


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CONCLUSION

Nokia gives importance to employees and its

resources in terms of knowledge ability etc .It

believes that strong internal structure will

help in handling complex external

environment .

kinds of business environment

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