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8/3/2019 Business Environment Intro
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Business Environment
Introduction
8/3/2019 Business Environment Intro
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Present Scenarioof
8/3/2019 Business Environment Intro
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Importance of Study
1) To prepare long term Business Policies
2) To prepare Dynamic & Competitive strategies
3) To foresee Socio-Economic changes
4) To forecast Demand
5) To contribute to Social Responsibility
8/3/2019 Business Environment Intro
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Business: Meaning & Objectives
y Economic activities related to the production anddistribution
y Dealings in exchange of goods and services
y Element of continuity of transactions
y Element of risk and uncertainty
y Profit motive
8/3/2019 Business Environment Intro
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Characteristics of Modern Businesses
Large size
Global Reach
Technology based
Diverse
Government Control
Oligopolistic Structure
Emerging EthicalConsciousness
Out of the 100 largest economies in the world,
51 are global corporations; only 49 are countries.
8/3/2019 Business Environment Intro
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Business Environment
y Business environment refer to allthe factors which affects theactivities of a business.
y Business managers as decisionmakers are concerned with theconstraints and opportunities that a business environment offers.
y It is the responsibility of businessmanagers to adapt their firm to the
changing business environment.
8/3/2019 Business Environment Intro
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Factors Affecting Business Environment
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The Internal Environment
Internal environment refers to the framework, thesituation and the factors within the business organizationand their impacts on its working.
Factors affecting the internal environment:
y Relationships within organizationy Physical assetsy Human assetsy
Financial Resourcesy Firm·s Goalsy Organizational value system
8/3/2019 Business Environment Intro
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The External Environmenty A business organization is also influenced by certain forces,
institutions and organizations operating from outside.
y The Micro-environment
y The Macro-environment
8/3/2019 Business Environment Intro
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The Micro-environment
Customers
Suppliers of input
Workers along with trade unions
Market intermediaries Competitors and the public
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The Macro-environment
y It is this environment that is likely to determine
to a great extent the success or otherwise of
business.
y Divided intoyEconomic Environment
yNon-economic Environment
8/3/2019 Business Environment Intro
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The Economic Environment
y
Economic Systemsy Structural Equilibrium
y Banking and Monetary Policyy Fiscal Policyy
Economic and Price Stabilityy Money and Capital Markety Factor Endowmentsy Size of the Markety
Social Overhead Capitaly Income Distribution and Purchasing Power
y ExternalTrade/International Environment
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The Non-economic Environment
y The Socio-cultural environment
y The Educational environment
y The Political-legal environment
y The Demographic environment
y Natural Environment