ASSESSING OVERALL BUSINESS ENVIRONMENT IN INDIAN

Transcript:ASSESSING OVERALL BUSINESS ENVIRONMENT IN INDIAN:
ASSESSING OVERALL BUSINESS ENVIRONMENT IN INDIAN ECONOMY Entrepreneurship Development and Industrial Consultancy (DBM-421) What is business? It is referred to as an organized effort of enterprise to supply consumer with goods and services for a profit. modern business may be defined as complex field of industry and commerce which involves activities related to both production and distribution. These activities on one hand satisfy society’s needs and desires and on the other hand bring profits to business firms. Nature of modern business Large size: Modern business is large in size. Private sector Indian companies are not as large as some of the companies of developed nations in terms of sales and assets but are quite large by the standards of developing countries and are fairly comparable with a large number of middle size companies of western world e.g. Reliance, Tata, Larsen & Toubro, Bharati Airtel, Adani, etc. Oligopolistic nature: Oligopoly is characterized by small number of firms seeking a homogenous or a differentiated product. Diversification: In order to grow and expand, today business houses adopt the policy of diversification. Global presence: Economic liberalization and reduction of trade restrictions enabled business organizations to expand by doing the business overseas. Technology orientation: Modern business organizations adopt new technology to introduce new products in the market. They spend considerable amount of their budget to research oriented activities directed to adopt new technologies. Government regulations: with liberalization there is also reduction in government controls. However, government control over business organizations is also necessary to correct market failures and create stable market conditions by monetary and fiscal regulations. Characteristic Features of Indian Economy Mixed economy: wherein both private and public enterprises prevail. Low per capita income: Unequal distribution of income and poverty: Agricultural based economy: Large population: Unemployment: Scarcity of capital: Technological backwardness: Limited Entrepreneur potential: Business environment It refers to all the factors which have direct or indirect influence on functioning of business. It is divided into two broad categories External Environment: Includes all those factors that affect the business from outside are beyond the control of organization Internal environment: Factors which are within the control of business organization External environment is futher categorized as macro and micro environment. Macro environmental factors Economic Environment: A close relationship exists between business and its economic factors like business cycles, inflation, unemployment interest rates, income level of saving and investments, etc. The economic factors affect consumer purchasing power