Environment of Business Dr. S. Arunprasad Asst.

Transcript:Environment of Business Dr. S. Arunprasad Asst.:
Environment of Business Dr. S. Arunprasad Asst. Professor Department of IT&M Arul Anandar College Karumathur Meaning Business Environment is sum or collection of all internal and external factors such as employees, customers needs and expectations, supply and demand, management, clients, suppliers, owners, activities by government, innovation in technology, social trends, market trends, economic changes, etc. These factors affect the function of the company and how a company works directly or indirectly. Sum of these factors influences the companies or business organizations environment and situation. Need and Importance of Business Environment 1. Effective Management 2. Innovation 3. Long-Term Planning 4. Effective Decision 5. Success and Progress of Business 6. Survival of Firm 7. Coordination with Environment 8. Getting Resources Factors affecting environment of business A.Internal factor Value System Vision, Mission and Objectives Organizational Structure Corporate Culture Human Resources: External Environment 1.Customers: 2. Suppliers: 3.Competitors: 4. Public: 5.Market intermediaries: Macro External Environment Economic Environment Important factors of Economic Environment Economic environment is one of the most crucial elements of the business environment. In India, the economic environment consists of various macro-level factors that are related to the production and distribution of the organization. These factors have an impact on the wealth of businesses and industries. Some of the important factors are as follows: Stage of Economic Development: The stage of economic development of the country means the physical frame and framework environment. Economical Structure: The type of economic system determines the role of the public and private sectors in India. A mixed economic system operates where both public and private sectors exist, and India is an example of a mixed economy. Economic Planning: Economic planning gives direction to the changes in the economic environment. It includes five years plan, an annual budget, etc. Economic Policy: There are various important economic policies that influence the business decisions, such as monetary policies, fiscal policies, etc. Fluctuations and trends in Economic Indicator: The functioning of an economic indicator like national income, distribution of income, growth rate, Political Environment Political factors can impact a business by making the market environment more or less friendly for that business. Typically, governments have a great deal of power over businesses and many times, there is not much that businesses can do about it. Political factors can impact businesses in various ways. These external environmental factors can add in a risk factor which can lead to a major loss in