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Business Environment
INTRODUCTION
Business decisions are influenced by two sets of factors
Internal factors (The Internal Environment
External Factors( The External Environment)
Business Environment presents two challenges to the enterprise
The challenge to combat the environmental threats
Exploit the business opportunities
Environmental Analysis is one of the first steps in Strategic Management
definition
“The process by which strategists monitor the economic, governmental/legal, market/competitive, supplier/technological, geographic and social settings to determine opportunities and threats to their firms”
“Environmental diagnosis consists of managerial decisions made by analysing the significance of data (opportunities and threats) of the environmental analysis”
Environmental Scanning is the monitoring, evaluating and disseminating of information from the external and internal environments to key people within the corporation.
A corporation uses this tool to avoid strategic surprise and to ensure its long-term health.
What is business environment?
Business environment includes the ‘climate’ or set of conditions, economic, social, political or institutional which have a direct or indirect bearing on the functioning of business
It signifies external forces, factors and institutions that are beyond the control of the business and they affect the functioning of a business enterprise.
Thus it is the set of external factors, such as economic factors, social factors, political and legal factors, demographic factors, technical factors etc., which are uncontrollable in nature and affects the business decisions of a firm.
Features of business environment
a. Business environment is the sum total of all factors internal & external to the business firm that greatly influence their functioning
b. It covers factors and forces like customers, competitors, suppliers, government, and the social, cultural, political, technological and legal conditions.
Continued…
c. The changes in business environment are unpredictable.
d. Business Environment differs from place to place, region to region and country to country. Ex: Political conditions in India differ from those in Pakistan. Taste and values cherished by people in India and China vary considerably.
Importance of business environment
Business environment is complicated and active in nature and has a far-reaching impact on the survival and growth of the business.
a. Determining Opportunities and Threats
b. Giving Direction for Growth
c. Continuous Learning
d. Image Building
Continued…
e. Meeting Competition
f. Identifying Firm’s Strength and Weakness: Business environment helps to identify
TYPES OF ENVIRONMENT
1) INTERNAL ENVIRONMENT
2) EXTERNAL ENVIRONMENT
Internal environment
Important internal factors which have a bearing on the decisions of a business firm are:
1. Value system
2. Vision, mission and objectives
3. Management structure and nature
4. Internal power relationship
5. Human resources
6. Company image
Value system
Vision, Mission & Objective
Management structure & nature
Internal Power Relationship
Human resources
Company Image
Miscellaneous factors
Physical assets and facilities like production capacity, technology and efficiency of the productive apparatus, distribution logistics etc., affect competitiveness of a firm.
R&D, technological capabilities determine a company’s ability to innovate and compete.
Marketing resources like quality of marketing men, distribution network etc. are important for brand extension, new product introduction etc.
Continued….
Financial factors and policies, financial position, capital structure affect business performances, strategies and decisions.
Continued….
7. Miscellaneous factors
Physical assets and facilities
R & D and technological capabilities
Marketing resources
Financial factors
External environment
Micro environment consists of the actors in the company’s immediate environment that affect the performance of the company. They are more intimately linked with the company.
Macro environment consists of larger societal forces that affect all the actors in the company’s micro environment.
Micro environment
Suppliers
Customers
Competitors
Marketing intermediaries
Financiers
Public
Suppliers: It has been observed that India maintained indigenous stocks of 3-4 months and imported stock of 9 months as against an average of a few hours to two weeks in Japan.
Steps taken:
1. Vendor development
2. Backward integration
3. Removal of dependence on single supplier
4. Move towards relationship marketing
Customers: In choosing the customer segments a company should consider factors like;
1. relative profitability
2. dependability
3. stability of demand
4. growth prospects
5. extent of competition.
The business firm should not be dependent on a single customer
With globalization Indians have become more exposed to global competition.
Competitors: An implication of customer demand is that a marketer should strive to create primary and selective demand for its products.
However many companies have restructured their business portfolio and strategies.
Seller’s market existed buyer’s market has emerged.
Firms that aid a company in promoting, selling and distributing its goods to final portfolio constitute the marketing intermediaries.
It includes agents, merchants who help the company find customers or close sales with the.
Choice of wrong marketing intermediary may land up the business in heavy losses.
Financiers: Their policies, strategies, attitudes, ability to provide non-financial assistance are much more important than the financing capabilities.
Public : A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its interests. Ex-media, citizens, local public etc.
Companies affected by leading daily which tries to bring down share prices of the company.
NGOs have been protesting against child labour, cruelty against animals, environmental problems, deindustrialization resulting from imports etc.
However some of publics are opportunities for the business when they can be used to disseminate useful information.
Thus a company should have good relation with local publics so that they can work for mutual benefit.
Macro environment
Economic environment
Political environment
Regulatory environment
Demographic environment
Technological environment
Natural environment
Global environment
Economic environment
Business is dependent on economic environment for inputs.
Business is dependent on economic environment for selling its finished goods.
Economists are supplying macro economic forecasts to various industrial establishments.
Meaning of Economic Environment
Definition
Totality of economic factors, such as employment, income, inflation, interest rates, productivity, and wealth, that influence the buying behavior of consumers and firms
The economic environment comprises of:
Income and wealth: Income in an economy is measured by GDP, GNP and per capita income. High values of these factors show a progressive economic environment.
· Employment levels : High employment represents a positive picture of the economy. However, there are many forms of unemployment, including partial employment and disguised unemployment.
· Productivity: This is the output generated from a given amount of inputs. High levels of productivity support the economic environment.
Classifications of the Economic Environment
Microeconomic environment : It includes the economic environment of a particular industry, firm or household and is primarily concerned with price determination of individual factors. The main consideration from a microeconomic perspective is the efficient allocation of resources. This is necessary to maximize total output.
Macroeconomic environment : It includes all the economic factors in totality. The main consideration here is the determination of the levels of income and employment in the economy.
Factors Affecting the Economic Environment
Inflation and deflation: Inflationary and deflationary pressures alter the purchasing power of money. This has a direct impact on consumer spending, business investment, employment rates, government programs and tax policies.
Interest rates: Interest rates determine the cost of borrowing and the flow of money towards businesses.
Exchange rates: This impacts the price of imports, the profits made by exporters and investors and employment levels (also through the impact on the tourism industry).
Monetary and fiscal policy: This helps in attaining full employment, price stability and economic growth.
Classification of Economies
Economies of countries can be classified based on parameters:
1. Ownership of means of production
a)capitalist economy
b)socialist economy
c) Mixed economy
2. Levels of economic development
a)Developing countries
b)Developed countries
Capitalism is an economic system characterized by private ownership of productive goods and services.
Socialism is an economic and political system in which private property is abolished and the means of production (i.e., capital and land) are collectively owned and operated by the state.
Mixed economy, in which some of the means of production are owned by the government while some is held by private individuals.
ECONOMIC INDICATORS
An economic indicator is simply any economic statistic, such as the unemployment rate, GDP, or the inflation rate, which indicate how well the economy is doing and how well the economy is going to do in the future. As shown in the article "How Markets Use Information To Set Prices" investors use all the information at their disposal to make decisions.
If a set of economic indicators suggest that the economy is going to do better or worse in the future than they had previously expected, they may decide to change their investing strategy.
Types of Economic Indicators
Total Output, Income, and Spending
HDI(Human Development Index)
Rainfall Index
FDI
Employment, Unemployment, and Wages
Production and Business Activity
Prices
Money, Credit, and Security Markets
Federal Finance
International Statistics
Salient features of Indian Economy
Agrarian Economy
High Population
Unequal Distribution of Income and Wealth
Centralization
Prevalence of Zamindari system
Lack of proper Infrastructure
Low Percapita Income
Less Economic Welfare
Developing Economy
Mixed Economy
Low Quality of Life
Illiteracy and skill shortage
Salient features of Indian Economy Cont……
High Levels of Unemployment & Underemployment
Less Production
Unfavourable BOP
Prevalence of Povety
Lack of Social Security Measures
Scarcity of natural Resources
Lack of Capital
Brain Drain
High Dependency Burdens
Low Level of Productivity
Technological Backwardness
India at a Glance……
A Sub-continent endowed with huge natural resources and bio-diversity is protected by the mighty Himalayas on the north , the Arabian sea on the West, the Indian Ocean on the South and the Bay of Bengal on the East .
7th largest country in geographical area.
2nd largest country in population (1.2 billion).
Largest democracy in the world.
An epitome of unity in diversity- a multi-ethnic, multi-religious, multi-cultural and multi-linguistic plural society.
2nd fastest growing economy in the world.
Ranks 10th in GDP in nominal terms and 4rth in PPP terms.
.
Basic Economic Indicators:
GDP :$1.704 trn.,10th/ $4.447 trn(June2011),3rd.
GDP Growth: 8-5% (2010-11)
GDP per capita:$1,382(nomina:139th; 2011)/ $3,608 (PPP:128th; 2011).
GDP by Sector:Agri(16.1%),Ind.(28.6%),Services
(55.5) (2010).
Inflation: (CPI): 9.44% (June 2011)
Population below poverty line: 37% (2010)
Labour force: 478 million (2010, 2nd.).Labor force by occupation:(agri.52%,ind.:14%Services: 34% (2009).
Unemployment: 9.5% (2009-10)
.
Ease of Doing Business Rank: 134
Exports: $247.4 billion (2010)
Imports : $359.3 billion (2010)
FDI stock:35.6 bn(1010) down from$156.30bn(2009)
Gross External Debt: $237.1 billion (2010 est)
Public Debt:$758 billion (2010),55.9% of gdp.
Revenues: $170.7 billion (2010 est.)
Expenditure: $257.4 billion (2010 est.)
Economic aid: $2.107 billion (2008 est.)
Foreign Reserves:$316 billion (July,2011).
Credit Rating: BBB-
Areas of Concern
High rate of Inflation( 10-12%)
Extreme Poverty (37% , more than 300 million below poverty level)
High Unemployment
Illiteracy and Education ( lack of quality education)
Lack of Health Care to the masses and Sanitation.
High Public Debt.
Corruption, Black money, stashing in foreign banks.
Crime and Violence in politics and society- lack of social justice.
Political environment
Political Environment refers to the influence exerted by the three political institutions ie. legislature, executive and judiciary in shaping, directing, developing and controlling business activities.
The constitution of a country
Political Organisation
Political Stability
Image of the country and its leaders
Foreign Policy
Laws governing business
Flexibility and adaptability of laws
The Judicial System
Political environment
Important economic policies such as industrial policy, policy towards foreign capital and technology, fiscal policy and foreign trade policy are often political decisions.
All these aspects have a bearing on the strategies adopted by the business firms. The stability of the government also influences business and related activities to a great extent. It sends a signal of strength, confidence to various interest groups and investors.
Cont…..
Further, ideology of the political party also influences the business organisation and its operations. You may be aware that Coca-Cola, a cold drink widely used even now, had to wind up operations in India in late seventies
In the early 1950s the Congress party adopted socialist pattern of society, this was mainly responsible for the public sector dominated economy which lasted until the early 1990s.
The dramatic changes in the political environment in the erstwhile USSR and East European countries that gave rise to drastic changes in their economic policies in the late 1980s.
And these developments encouraged a revolutionary change in India’s economic policies in 1991.
Continued….
The government expenditure forms a substantial percentage of GDP in the developed and developing countries.
Government normally plays four important roles in an economy in relation to business
1. Regulatory role
2. Promotional role
3. Entrepreneurial role
4. Planning role
In 1991 Indian economy faced severe
macro-economic imbalances:
• Huge deficit in the balance of payments
• Current Account Deficit rose to 3.2% of GDP
• Foreign currency assets dipped from US $3.4 bn (march 1990) to US $975 mn on July 12,1991
The salient features of the NEP-1991:
Liberalisation
Extending privatisation
Globalisation of the economy
Regulatory environment
Government regulation of business may cover
1. Entry into business
2. Reservation of industries to small scale, co-operative sectors, licensing system
3. Ceilings on profit margins, dividend
4. Restriction on intra-corporate investments
Government regulation may be broadly divided into direct controls and indirect controls.
Indirect controls-fiscal policy, monetary incentives/disincentives.(eg-high import duty)
Direct control-can be applied selectively from firm to firm and industry to industry
Legal Environment
This refers to set of laws, regulations, which influence the business organisations and their operations.
Every business organisation has to obey, and work within the framework of the law. The important legislations that concern the business enterprises include:
(i) Companies Act, 1956
ii) Foreign Exchange Management Act, 1999
(iii) The Factories Act, 1948
(iv) Industrial Disputes Act, 1972
(v) Payment of Gratuity Act, 1972
(vi) Industries (Development and Regulation) Act, 1951
(vii) Prevention of Food Adulteration Act, 1954
(viii) Essential Commodities Act, 2002
(ix) The Standards of Weights and Measures Act, 1956
(x) Monopolies and Restrictive Trade Practices Act, 1969
(xi) Trade Marks Act, 1999
(xii) Bureau of Indian Standards Act, 1986
(xiii) Consumer Protection Act, 1986
(xiv) Environment Protection Act
(xv) Competition Act, 2002
Besides, the above legislations, the following are also form part of the legal environment of business
(i) Provisions of the Constitution:
The provisions of the Articles of the Indian
Constitution, particularly directive principles, rights and duties of citizens, legislative powers of the central and state government also influence the operation of business enterprises.
(ii) Judicial Decisions:
The judiciary has to ensure that the legislature and the government function in the interest of the public and act within the boundaries of the constitution. The various judgments given by the court in different matters relating to trade and industry also influence the business activities.
One important aspect is the phenomenon of ethnicity
Driving force behind political instability
Firms must assess political risks
Government actions that could adversely affect the long-run profitability or value of a firm
What aspects of the political environment should you consider as you do business?
Stability of government
International relations
Government bureaucracy
Political Risk – 7 Typical risk events
Expropriation of corporate assets without prompt and adequate compensation
Forced sale of equity to host-country nationals, usually at or below depreciated book value
Discriminatory treatment against foreign firms in the application of regulations or laws
Barriers to repatriation of funds (profits or equity)
Political Risk – 7 Typical risk events
Loss of technology or other intellectual property (such as patents, trademarks, or trade names)
Interference in managerial decision making
Dishonesty by government officials, including canceling or altering contractual agreements, extortion demands, and so forth
Managing Political Risk
Avoidance – either the avoidance or withdrawal of investment in a particular country
Adaptation – adjust to the political environment
Dependency – keeping the host nation dependent on the parent corporation
Hedging – minimizing the losses associated with political risk events
Economic Risk
A country’s level of economic development generally determines its economic stability
Economic risk falls into 2 categories
Government changes its fiscal policies
Government modifies its foreign-investment policies
Managers are constantly reassessing economic risk
Conclusion:
You need to follow closely the political environment in which you operate so that you can know what to do to guard yourself against any eventualities that may result from any changes in the politics of the countries where you do business.
Political changes can also create great opportunities for you as a business person and such chances can come your way if you keep yourself knowledgeable about the political climate in which you do business.
Politics of India
Political Institutions & Parties
Republic of India
A federal republic with a parliamentary system of government
capital: New Delhi
A federal system
26 states and 6 centrally administered Union Territories
2 states are partially claimed by Pakistan and China
Federal system
Relatively centralized
federal government controls the most essential government functions
defense
foreign policy
taxation
public expenditures
economic (industrial) planning
Federal system
state governments formally control
agriculture
education
law and order within states
dependent on central government for funds
Federal system
Balance of power between central and state governments
varies by time and place
state power was constrained
during the rule of Nehru and Indira Gandhi
state governments have more room to maneuver
when central government is weak
since 1998
Federal system
considerable center-state conflict when ruling political party in a state is different from national ruling party
Parallel state structure
Formal political structure of the states parallels that of the national government
national state
President Governor
Prime Minister Chief Minister
Parliament Assembly
Supreme Court High Court
The legislature
Parliamentary system of government
the executive authority is responsible to the Parliament
The legislature
bicameral Parliament
Rajya Sabha (Council of States)
Lok Sabha (House of the People)
Rajya Sabha (Council of States)
The Upper House
Upper House
Rajya Sabha (Council of States)
not more than 250 members
12 are nominated by the President of India
the rest are indirectly elected
by state Legislative Assemblies
The Council of States can not be dissolved
members have terms of 6 years
1/3 members retire at end of every 2nd year
Lok Sabha
House of the People
Lower House
Lok Sabha (House of the People)
545 members
2 are appointed by the President of India
the rest are directly elected from single-member districts
5-year terms unless dissolved
Lok Sabha elects its presiding officer
the Speaker
Lok Sabha
Elections held at least every 5 years
Prime Minister may call elections earlier
543 single-member districts of roughly equal population
party nomination
1st-past-the-post
winner-take-all
women’s share
Elections to Lok Sabha
Vote share of 3 major political parties
Current composition
43 parties in the 13th Lok Sabha (1999)
39 parties in the 14th Lok Sabha (2004)
Bharatiya Janata Party (BJP) 184 138
Indian National Congress (INC) 109 145
Communist Party of India (M) 34 43
other political parties 218 217
total 545 543
Indian National Congress
India’s oldest political party
since 1885
India’s premier political party
until 1990s
in 1960s many regional parties started challenging INC’s monopoly on power
Indian National Congress
Indira Gandhi
created a top-down structure
party leaders appoint party officials
some limited party elections
left-of-center, pro-poor political platform
Indian National Congress
INC moved toward the ideological center
Beginning in 1984
INC today tilts right-of-center
economic efficiency
business interests
limited government spending
Indian National Congress
INC has always attracted support from diverse social groups
in the 1990s INC has lost some of its traditional constituencies among the poor and Muslims
Bharatiya Janata Party (BJP)
The major political party in India today
right-leaning, Hindu-nationalist party
first major party to mobilize explicitly on the basis of religious identity
Bharatiya Janata Party (BJP)
better organized than INC
disciplined party members
carefully selected party cadres
clear and respected authority line within the party
Bharatiya Janata Party (BJP)
Traditional supporters
urban, lower-middle-class groups
base of support widened since mid-1980s
Hindu nationalism
north-central India
decline of Indian National Congress
Muslims as convenient scapegoat for frustration
BJP’s rapid rise to power
electoral success from 1989 to 1999
difficulty in forming alliance with other parties
break with past traditions
relatively moderate, centrist position
BJP formed governing coalition in 1998
collapsed in 1999
BJP formed a new coalition in 1999
more broadly based than previous coalition
Bharatiya Janata Party (BJP)
economic liberalization and stability
privilege the interests of the Hindu majority
Prime Minister
Leader of the majority party leader in Lok Sabha becomes the prime minister
prime minister nominates a cabinet
members of Parliament in the ruling coalition
Council of Ministers
effective power is concentrated in the office of the prime minister
where most of the important policies originate
Prime Ministers of India
38 years in the Nehru-Gandhi family
more and more rapid turnover
The President of India
Head of the State
Commander-in-Chief of the armed forces
elected by an electoral college
national Parliament
state legislature
5-year terms
can be reelected
The President of India
Ceremonial office
symbolize national unity
supposedly above partisan politics
mostly acts on the advice of the prime minister
President plays a significant role when the selection of a prime minister is complex
in 1998 President requested BJP to form govt.
INDIAN CONSTITUTION
The followings are the main salient features of Indian constitution.
A large written constitution
A borrowed constitution.
Fundamental Rights.
Directive principles of state policy.
Parliamentary form of Govt.
Secularism
Independent & Integrated Judiciary
Federalism.
Judicial Review.
Fundamental Duties.
Constitution of India
Preamble:
“We, the people of India, having solemnly resolved to constitute India into a Sovereign, Socialistic, Secular, Democratic Republic and secure to all citizens
Justice – social, economical and political,
Liberty – of thought, expression, belief, faith & worship,
Equality of status and opportunity and promote among them all,
Constitution of India
Preamble:
Fraternity assuring the dignity of individual and unity and integrity of the nation,
in our constituent assembly this 26th November, 1949,
do hereby adopt, enact and give to ourselves this
Constitution”
Constitution of India
Whether preamble is a part of Constitution?
Yes
Ordinarily ‘preamble’ is not considered part of a statute & therefore at one time it was thought that the Preamble does not form part of the Constitution
This view is no longer correct
Supreme Court has held that Preamble is part of Constitution
Supreme Court has referred to the Preamble several times while interpreting constitutional provisions
Constitution of India
Whether preamble can be amended?
Yes - Supreme Court has declared that:
• Preamble is part of Constitution
• It can be amended subject to the condition that it does not affect the basic structure of the Constitution
Constitution of India
Whether preamble has been amended any time?
Yes – through 42nd Amendment Act, 1976
Three terms were included in the Preamble:
• Secular
• Socialistic
• Integrity
These are not new since these are already included in spirit in various provisions of the Constitution
• Constitution of India
FUNDAMENTAL RIGHTS:
Fundamental Rights are incorporated in Articles 12 to 35, forming part III of the Constitution
Some of the rights are available only to citizens of India while others are available to all the persons
Rights guaranteed fall under following broad categories:
• Right to equality (Art 14)
• Prohibition of discrimination (Art 15)
• Abolition of untouchability (Art 17)
• Right to freedom protection of life and personal identity(Art 21)
• Right to freedom of speech, expression, movement (Art 19)
• Right against exploitation (Art 23 & 24)
Constitution of India
Rights guaranteed fall under following broad categories:
• Right to freedom of conscience, practice of religion(Art 25 &28)
• Right to minorities for conservaton of their culture(Art 29 & 30)
• Right to enforce the Fundamental Rights(Art 32)
Constitution – important Articles
Article 12 – Defining “the State”
Article 13 – Prohibiting the State from making any law
which takes away the fundamental rights
Article 14 – Right to Equality
Article 15 – Prohibits State from discriminating against
citizens on grounds of religion,race,sex,
caste,place of birth but enables States to
make special provision for women and
children
Constitution – important Articles
Article 16 - Equal opportunity in the matter of public
employment
Article 16(4) – Provision for reservation in appointment
in favour of backward class of citizens
which are not adequately represented
in the services under Govt.
Constitution – important Articles
Article 19 – Right to freedom
Freedom of speech and expression
To assembly peacefully without arms
To form associations or unions
To move freely throughout the territory of India
To reside and settle in any part of India
To practice any profession or to carry out any
procession, trade or business
Constitution – important Articles
Article 19 – Freedom of speech and expression is subject to the following restriction:
Security of the State
Friendly relations with foreign states
Public order
Decency or morality
Contempt of Court
Constitution – Directive Principlies
Directive Principles of State Policy embodied in Part IV of the Constitution(Art 36 to 51)
Contain the principles ‘Fundamental in the governance of the country”
Directive Principles of Constitution
State shall strive to promote welfare of people securing social, economic and political justice
State shall strive to minimise inequalities in income
State shall direct its policy towards securing the same
Ownership & control of the material resources of the community are so distributed as best to subserve the common good
Directive Principles of Constitution
Operation of the economic system does not result in the concentration of wealth and means of production to the common detriment
Securing living wage of worker, just and humane conditions of work, participation of workers in management
Securing uniform civil code for the citizens throughout the territory of India
Constitution – Fundamental Duties
Article 51A – Fundamental Duties of every citizen:
To abide by the Constitution and respect its ideals and institutions, the National Flag & National Anthem
To cherish and follow the noble ideals which inspired our national struggle for freedom
To upheld and protect the sovereignty, unity and integrity of India
To defend the country and render national service when called upon to do so
Constitution – Fundamental Duties
To promote harmony and the spirit of common brotherhood amongst all the people of India transcending religion, linguistic and regional or sectional diversities, to remove the practices derogatory to the dignity of women
To value & preserve the rich heritage and our composite culture
To protect & improve the natural environment including forests, lakes,rivers and wild lives & have compassion for living creatures
Constitution – Fundamental Duties
To develop the scientific spirit, humanism and
the spirit of inquiry and reform
To safeguard public property and adjure
violence
To strive towards excellence in all spheres of
individual and collective activity, so that the
nation constantly rises to higher levels of
excellence and achievement
Constitution – important Articles
Article 309 - Acts of the appropriate Legislature to regulate the recruitment, and conditions of service of persons appointed, to public services and posts
Art 310. (1) Every person who is a member of a defence service or civil service or all-India service, holds the post under the Union during the pleasure of the President of India
Constitution – important Articles
Art 311(1)- No person who is a member of a civil service of the Union or an all-India service shall be dismissed or removed by an authority lower than appointing authority
(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry
Constitution – important Articles
Provisions of Article 311(2) shall not apply :
(a) where a person is dismissed or removed or
reduced in rank on the ground of conduct which
has led to his conviction on a criminal charge
(b) where the authority empowered to dismiss or
remove or reduce him in rank is satisfied that for
some reason, to be recorded in writing, that it is
not reasonably practicable to hold such inquiry
Constitution – important Articles
©Where the President is satisfied that in the interest of
the security of the State it is not expedient to hold
such inquiry
FUNDAMENTAL RIGHTS
• RIGHT TO EQUALITY which has following articles
• Equality before Law
• Prohibition of discrimination on the grounds of Religion Race Caste Sex or place of birth.
• Equality of opportunity in matters of Public Employment
• Abolition of Untouchability
• Abolition of Titles
The Judiciary
Fundamental contradiction in constitution
principle of parliamentary sovereignty
principle of judicial review
The Judiciary
judiciary tries to preserve the constitution’s basic structure
to ensure that legislation conforms with the intent of the constitution
parliament tries to assert its right to amend the constitution
Demographic environment
Demographic bases of market segmentation include:
1. Age structure
2. Gender
3. Income distribution
4. Family size
5. Occupation
6. Education
7. Social class
8. Religion
9. Race
10. Nationality
Technological environment
Technology is one of the important determinants of global competitiveness.
The type of technology in use, level of technological developments, speed with which new technologies are adopted and diffused, appropriate technologies are important for business.
Innovations may help companies to increase market share, capture new markets, create new market segments, industries and markets.
Natural environment
Environment is the source and support of everything used by businesses.
The geographical and ecological factors such as natural resource endowments, weather and climatic conditions, topographical factors, locational aspects in the global context, port facilities etc. are all relevant to business.
Continued….
Geographical factors influence
1. Location of certain industries
2. Choice of technology
3. Demand pattern
Depletion of natural resources, environmental pollution and disturbance of the ecological balance have caused great concern.
Ex-Indian pharmaceutical company is affected by WTO’s acceptance of product patents.
Import and investment liberalizations mandated by WTO has changed competitive environment in India.
War or political tensions globally , uncertainties, strained political relations between nations etc. affect business.
Developments in information and communication technologies have significant implication for business.