Post on 06-Apr-2018
transcript
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DYNAMICS OF
BUSINESSENVIRONMENT
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Business environment
Business environment refers to those
aspects of the surroundings of business
enterprise which have INFLUENCE on
the functioning of business. An organization can survive and grow
only when it quickly and continuously
adapts to changing environment.
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Definition of business environment
Business environment is the total of all
things external to business firms and
industries which affect their organization
and operations.According to WHEELER
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Dynamics of Business
Environment
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FACTORS PRODUCING CHANGES
IN BUSINESS ENVIRONMENT
Changes in Government Policies
Variations in Growth PerformanceCorrective Policy Actions
Changes in Market Structure and
Competition
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FACTORS PRODUCING CHANGES
IN BUSINESS ENVIRONMENT(contd..)
Future Expectations and Business
Speculation
Changes in Consumer Attitudes, Tastes,
and Preferences
Imports and Foreign Investment Changes
Non-Economic Factors
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Changes in Government Policies
Government affects business environment
in various roles such as:
Regulators Promoters
Entrepreneur
Planner Consumer
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Variations in Growth Performance
Variations in growth rate from year to year
bring about corresponding change in the
business environment and business firms
adjust to the changing scenario..
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Corrective Policy Actions
Corrective actions are taken when actual
performancedeviates from intended or
planned performance.
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Changes in Market Structure and
Competition
The market structure basically depends
upon such factors as the no. of buyers and
sellers in the market, freedom of entry
and exit, independence between firms,
mobility of the factors of production and
availability of market information to the
various participants.
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Future Expectations and Business
Speculation
Both individuals and business firms on the
basis ofpast trends and current
scenario anticipate future changes in avariables such as rate of interest, rate of
inflation, exchange rate, taxes,
government borrowings, advertisementexpenditure etc.
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Changes in Consumer Attitudes,
Tastes, and Preferences
The main factors that bring about changes
are Education, Geographical mobility,
Fashion trends and compulsions ofSeasonal factors. Consumers perceptions,
attitudes and lifestyle are influenced by
Advertising and result in changing tastes
and preferences.
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Imports and Foreign Investment
Changes
Exposure of foreign products and foreign
business firms can cause a sea change in
the nature of business environment.
Differences in the prices of imported
and domestically produced goods pose
challenge to the domestic firms to become
lean and efficient so that they can stay inCompetition.
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Non-Economic Factors
There is a wide variety of non-economic
factors which can destabilise the business
environment. Such as social and cultural
factors, political changes, naturalclimates.
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Thank You