The Objective of the Course

To learn about the concept of business its nature, scope & characteristics of the contemporary business including the vision mission and the goal of the business To learn about the various environmental factors which have major repercussions on business and make out the changes that occur constantly within the sphere
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

 The course outline has a broad coverage of industrial policies since independence to the recent developments in 1990s We too discuss the fiscal policy with recent progress in the budgets
Monetary policy which deals totally with the demand and supply of money has the special attention in the unit two with recent trends and the role of the finance commission
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

 Balance of payments has the special focus in the unit three which deals with the major components causes for the disequilibrium in balance of payments , and also finds out the correction measures ,impact of new economic policy on the balance of payment and recent trends Indian trade policy where it deals with the bilateral and multilateral trade agreements are seen with the second part of the unit & the EXIM policy is the one which paid the special attention in the end of the unit
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

 WTO , its nature and scope ,the role and function in promoting world trade are clearly described in the next unit where the agreements reached in the Uruguay round including TRIPS and TRIMS and GATS will be discussed further with Disputes settlement mechanism will be seen in the unit four In the last unit we have a glance of features and components of Indian financial system, the money markets and capital markets recent developments of stock exchanges and the legal framework developed to support the healthy industrialization and to protect the rights of consumers COMPILED BY Mrs R VINAYA
LAXMI MBA @ SITS

Introduction to Business Environment

Nature of Business Business is understood as the organized efforts of enterprises to supply consumers with goods and services for a profit Scope of Business The scope of business is vast .The various different activities that bring raw material to the factory and the end product from there to the market constitute the business
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Characteristics of the business

Business in transition Pressure of competition Immense opportunities Globalization Technology Information

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Business Objectives
Vision Vision is broad and hazy explanation of why the firm exists and where it is trying to march ahead Vision is a beacon of light It answers the question like Where do we go from here? For example a vision statement given by Infosys is To be globally respected corporation that provides best of breed business solutions, leveraging technology, vendors and society at large COMPILED BY Mrs R VINAYA
LAXMI MBA @ SITS

Mission A mission statement outlines the definite meaning to the vision statement If vision answers where do we go from here the mission answers what business we are in right now For example the mission statement given by ford motor co. is to improve continually our products and services to meet our customers needs allowing us to prosper as business and a reasonable return to the stock holders
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Objectives of the business

The mission statement is far clear and specific than the vision but are not to be taken as concrete directions for action. The objectives stand as attempts to make mission statements more concrete

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

The following are the objectives of a business to be framed to flourish in the competitive structure 1. Profit 2. Growth 3. Power 4. Employee satisfaction and development 5. Quality products and services 6. Market leadership 7. Challenging 8. Joy of creation 9. Service to society 10. Good corporate citizenship
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Critics of the Business

There is also the negative side of the business where lagging behind the pointing out the shortcomings. The specific criticisms regarding that are given below 1. Business activity has a corrosive effective on the cultural values of people 2. Business dehumanizes and exploit workers 3. Business degrade nature and environment 4. Business destroys the handicrafts and renders artisans jobless 5. Business causes scams and scandal, bend rules , bribe officials 6. Business makes people avaricious
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Business Environment
Environmental factors refer to all external forces which have a bearing on the functioning of the business According to F Gluek and Lawrence R Jausch the environment includes all the factors outside the firm that leads to opportunities or threats to the firm Although there are many factors, the most important of the sector are socio-economic, technological, global and natural
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Meaning of Business Environment

Business Environment consists of all those factors that have a bearing on the business, such as the strengths, weaknesses, internal power relationships and orientations of the organization; government policies and regulations; nature of the economy and economic conditions; socio-cultural factors; demographic trends; natural factors; and, global trends and cross-border developments.

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

The nature of business environment

The business environment consists of number of factors which are different types and have a degree of influence on the business On the basis of extent of intimacy with the firm the factors may be broadly classified into two Internal environment and External environment The internal factors are regarded as controllable where as external factors are uncontrollable in nature Where the external factors are divided into two depending on the impact on the firm such as micro environment and macro environment
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

We consider business environment at three levels

Internal environment/ Controllable Environment Micro environment / Task environment / Operating environment Macro environment / General Environment / Remote environment

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Internal Environment The important internal factors that have bearing on the strategy and other decisions are outlined as below The objectives of the business The people employed in the business Value system The management Organizational structure The assets owned by the company The financial strength of the company The marketing resources The focus of research and development Human resources Company image COMPILED BY Mrs R VINAYA The culture of the organization LAXMI MBA @ SITS

External Environment As stated earlier the external environment is divided into two micro & macro environment. The The Micro Environment consists of the actors in the company who have immediate environment that effect the company These include the following people 1. Suppliers 2. Customers 3. Competitors 4. Marketing Intermediaries 5. Financiers 6. Public
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Macro Environment A company and its forces in its micro environment operate in a larger macro environment where it shapes opportunities and pose threats to the company. The following are the factors which influence a business organization externally 1. Economic Factors 2. Social and cultural Factors 3. Demographic Factors 4. Political Factors 5. Natural Factors 6. Technological Factors 7. Global factors COMPILED BY Mrs R VINAYA
LAXMI MBA @ SITS

 Economic environment refers to all forces which have an economic impact on business .Industrial production , agriculture, planning, infrastructure, national income, per capita income, money supply, savings which make up total economic environment Social and cultural factors include the peoples attitude to work and wealth, role of family, marriage, religion and education, ethical and social responsiveness to the business Demographic factors deals with the sex of the population of the country, the age factor, birth rate death rate etc which intern has influence on the business we run
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

 Political environment refers to the influence exerted by political institutions like legislature, constitution etc over the business organizations A stable and dynamic political environment is indispensable for the business growth Natural Factors refers to the environmental factors which influence the location of a unit such as geographical, climatic, etc which has a remarkable influence on the business organization

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

 Technological Factors concern with the systematic application of scientific or organized knowledge to the practical tasks A business men should be ever alert to adopt the technological changes in business organization Global Factors refers to the increasing the opportunities and threats to the organizations where the total world is a global village which results in increasing quality, competition transfer of capital and technology transfer
COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

Environmental Analysis
The survival and growth of the business depends upon the strategy it develops for the future

A strategy is a long range blue print of an organizations desired image, direction and destination what it wants to be, what it wants to do where it wants to go

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS

The strategic formulation are done to guide the organization in the uncertain environment . The SWOT analysis is one such method to analyze the environment

The SWOT model is based on identifying the organizational internal strengths and weaknesses and external threats and opportunities

COMPILED BY Mrs R VINAYA LAXMI MBA @ SITS