Business Environment Learning Objective What is

Transcript:Business Environment Learning Objective What is:
Business Environment Learning Objective What is Business What is Environment Business Environment- Nature, Objective Types of Business Environment Interaction between Internal and External Environment Importance of Business Environment  Business: Business is a human activity carried out by the unified efforts of different categories of people, to produce the wealth through production and distribution of the goods and services. According to Malvin Anshen : “ Business is the way by which men make their living.” According to Bayard O’Wheeler : “ Business is an institution organized and operated to provide goods and services to society under the incentive of private gain.”  Environment: The birth, growth and continuous development of organization are influenced by a wide range of variables like employees, customers, suppliers, producers, competition etc.  Business Environment: Business Environment refers to those aspects of the surroundings of business enterprise, which affect or influence its operations and determine its effectiveness. According to Keith Davis: “Business environment is the aggregate of all conditions, events and influence that surrounds and affects it” Nature of Business Environment  Complex: Environment consists of a number of factors, events, conditions arising from different sources which impact business thus making the business complex.  Interdependence : Factors affecting business environment like social, economic, legal, cultural etc are inter dependent. E.g. A rich country can make sufficient expenditure on the research and development.  Dynamic: Business environment is dynamic as it keeps on changing in terms of technological improvement, changes in consumer preferences, entry of new competitors.  Uncertainty: Business environment is largely uncertain as it is very difficult to predict future happenings.  Relativity: Business environment is a relative concept as it differs from country to country and region to region. e.g. Demand of saree is high in India comparative to other countries.  Specific and General forces: Specific forces affects individual enterprises directly and immediately whereas general forces have impact on all business enterprises.  Forecasting is not possible for all developments: Many developments such as interest rate fluctuations, the rate of inflation etc are difficult to predict on log term basis which makes difficult to maintain business environment. Objectives of Business Environment  Knowledge of Information: Every businessman should be aware about the current environment of the business to change accordingly.  Basis of Decision: It contains all the information which is needed for taking good decision. e.g. If a business knows about