Basic Concepts of The Indian Economic Environment

Chapter
BUSINESS ENVIRONMENT DEGMENT
Basic Concepts of the Indian Economic Environment
Chapter

Copyright 2002, Raj Agrawal
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Business Environment (Edition-2nd )
Raj Agrawal
Excel Books
Chapter
Introduction
The term Business Environment refers to the totality of all the relevant forces external, to and beyond the control of, an individual business enterprise and its management. These forces, despite being externally located, continue to exercise a significant and meaningful influence on the life and growth patterns of individual enterprises. Business environment can be classified into two major categories: the economic environment and the non-economic environment. The non-economic environment refers to social, cultural, political, legal, technological factors etc. In todays business environment, considerable skill and dexterity is required in adjusting, coping with and managing the environment of business.
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Raj Agrawal
Excel Books
Chapter
The Economic Environment Of Business

A business firm is an economic institution in a market system. Its market behaviour reflects the nature of the economic decisions taken by the manager of the firm. Micro-economic decision-making by the firm has, nevertheless, to be made within the broader macro-economic system in which a business firm operates. The present-day economic environment of business is a complex phenomenon. Business sector has economic relations with the government, the capital markets, the household sector, and the foreign sector. These different sectors, together, influence the trends and structure of the economy. The form and functioning of the economy varies from country to country. The design and structure of an economic system is conditioned by sociopolitical arrangements.
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Raj Agrawal
Excel Books
Chapter
Critical Elements Of The Economic Environment Of Business

The institutional framework of the environment The physical framework of the environment Physical anatomy of national economy
Functioning of the economy

Economic planning and programmes Economic policy statements and legislations
Fluctuations and trends in macro-economic variables

Economic problems and prospects
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Raj Agrawal
Excel Books
Chapter
The Socio-cultural Environment Of Business

Just as business is an economic activity, it also has a social purpose. Business must discharge social responsibility, social obligations, and social commitment. Else, it cannot enjoy social sanction. A host of factors constitute such a socio-cultural environment. They include factors like social values, culture, beliefs, traditions and conventions, social
attitudes, social institutions, class structure, social group pressure etc.

The socio-cultural environment happens to be a culmination of forces operating from different platforms such as history, culture, policy, ethics and morality, values and institutions, geography and ecology etc.
The society itself has to balance the achievements and aspirations of

various individuals, groups and institutions.
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Raj Agrawal
Excel Books
Chapter
Critical Elements In The Socio-cultural Environment Of Business

Social institutions and systems Social values and moves Education and culture The social responsibility of the government Social groups and social movements Socio-economic order Social problems and prospects
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Raj Agrawal
Excel Books
Chapter
The Politico-legal Environment Of Business

The government is a political institution. As discussed earlier it also has a social purpose: it enacts and executes social policies and exists with social consent, providing ways and means of maximising social benefits and minimising social costs. In other words, the government and its structure and style have a definite impact on business, and is of immense social value. More so in the modern world, where business of any type and size is affected by the government policies, programmes, and legislations.
For a successful manager it becomes necessary to take stock of the

relevant politico-legal environment of business and then capitalise on the opportunities offered by it.
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Raj Agrawal
Excel Books
Chapter
Critical Elements In The Politico-legal Environment

The form and structure of the government The strength of the opposition in legislature The role and responsibility of the bureaucracy The direction and the speed of the government policies and programmes Socio-economic legislations The politico-legal institutions
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Raj Agrawal
Excel Books
Chapter
Social Responsibilities Of Business

Business exists in the context of a society, in an intertwined relationship. In traditional, pre-industrial society, business transactions were negligible if not non-existent. Production was mainly for self-consumption and the need for exchange was minimal. As transitions takes place in society through various stages, business too is changing in terms of size, structure, strategy and system. Business determines society as much as society determines business. Therefore, it is important for business to be socially responsible. From the standpoint of business, we have identified each element of this public. They are: owners/shareholders, managers, workers, suppliers, distributors, consumers, government officials, and other similar social groups. Copyright 2002, Raj Agrawal
Business Environment (Edition-2nd ) Raj Agrawal Excel Books
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Chapter
Business Decision-making And The Impact Micro Environment
Of The
The micro environment consists of the players in the companys immediate environment that affect its ability to serve its markets, specifically the company itself, the suppliers, market intermediaries, customers, competitors, and the public. The company itself consists of several interacting departments, all of which influence managements decision-making. The company faces several types of competitors: desire competitors, generic competitors, product form competitors, and brand competitors. Impact on the companys ability to achieve, its objectives: financial, media, government, citizen action, and general and internal, people. All these factors make up the companys micro environment and influence its business decisions.
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Raj Agrawal
Excel Books
Chapter
Business Decision-making And The Impact Macro Environment

Businesss macro environment consists of six major forces: The demographic environment The economic environment The natural environment The technological environment The political environment The cultural environment
Of The
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Raj Agrawal
Excel Books

Basic Concepts of The Indian Economic Environment

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Chapter

BUSINESS ENVIRONMENT DEGMENT