Business Environment

INTRODUCTION
Every business organisation has to interact and transact with its environment. Business environment has a direct relation with the business organisation. Effectiveness of interaction of an enterprise with its environment primarily determines the success or failure of a business. Identify the environment in which it operates Formulate its policies in accordance with the forces Business organisation has to tackle its internal and external environment. The economic activities are still considerably controlled by the government.

SALIENT FEATURES
The nature of the environment is likely to determine, the role of the enterprise The salient and distinct features of the environment in which the Enterprise operates determine the nature of its business policy. Public policies must be consistent with and conducive to creating confidence among business Enterprises Government regulations need to motivate the business community to make use of opportunities for developing the economy Rapid social change leads to a transformation of the society Industrialization has given birth to a certain level of social disorganization, Industrial society has emerged in the place of a traditional social setup.

Taking care of the nature of business environment enables the corporate policymaker to

Perform the critical function of matching the needs of the society and the capacity of the goods and services to satisfy the needs of the people Adapt the organisation itself to the dynamic conditions of the society Match the organisational policies and resources with the social needs, and Contribute to the social responsibility of business.

Types of Environment
1. Internal EnvironmentA.Value system B. Vision, Mission and Objectives C. Management Structure and Nature D. Internal Power Relationship E. Human Resources F. Company Image and Brand G. Physical assets, R&D and Financial strengths

Types of Environment- Conti

2. External Environment A. Micro Environment- Suppliers, Customers, Competitors, Financiers, Publics, Marketing intermediaries B. Macro Environment

Types of Environment- Conti

Social Factors Economic Factors Cultural Factors Geographical Factors Technological Factors Political Factors Legal Factors

Social Environment
Population Age Ethnic composition of population Occupational Rural urban distribution Migration factors Income level Family

Economic Environment
Nature of the economy Structure of the Economy Economic Policies Economic Conditions Global Linkages

Political Environment
Economic Systems Political ideologies

Legal Environment
The Constitutions

Technological Environment
Innovation

Demographic Environment
Age structure Gender Income distribution Family size Religion Race Nationality

Cultural Environment
Elements of Culture Cultural Adaption Cultural Shock Cultural Transmission Cultural Lag Language

RECENT POLITICAL ENVIRONMENT

India remains the leader among the SAARC nationsnot only because of its imposing size and population, which, of course, provides a lucrative market for industrialised countries, but also because of its mature political leadership and rapidly growing economy which makes it a safe place for the investors to deal with

Domestic Developments in Trade

Another significant development in the last few years is the growing importance of a large Indian consumer market, which has encouraged many foreign brands to enter into trade pacts with the Indian companies. Retail has got particular attention, as it is the second-largest sector in India aft er agriculture. Organised retailers although are at a nascent stage, they are bound to have a profound effect on the small retailers, even though the consumers will hopefully be benefited.

RECENT ECONOMIC AND FINANCIAL ENVIRONMENT

India has undergone a profound shift in the economic management. Since the mid-1980s, successive reforms have progressively moved the Indian economy towards a market-based system. State intervention and control over economic activity have been reduced signifi cantly and the role of private sector entrepreneurship has increased. Overall, reform has had a major beneficial impact on the economy. The annual growth in GDP per capita has accelerated and is currently estimated to be 8.5 per cent annually, and India is now the third largest economy in the world.

-Continued
Increased economic growth has helped to reduce poverty, which has begun to fall in absolute terms. Significant problems still remain unresolved and the next round of reforms need to focus on a number of key areas. The rapidly proliferating and muchheralded business prospects arising from India, mask a fundamental development flaw facing the country that would require a marked improvement in the infrastructural development.

Thank You