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Factors of Environment

Factors of Environment

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Published by Sagar Parekh
various factors of business environment
various factors of business environment

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Published by: Sagar Parekh on Sep 15, 2013
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Micro Environment of Business

Micro environment of business becomes from internal part of company. This environment includes different factors which can be controlled by company. Following are the main factors of micro environment 1. Suppliers These people supply the goods to company. We can control them, if we pay them on the time. We should also keep contacts with multiple sources because it is very less risky. If one supplier stops to supply us, we can get raw material from other supplier. 2. Customers Customers also affect on company's business. If we do not care our customers, our customers will buy from other company. Due to this, our sale will decrease. We should make good relation with our customers. 3. Market Intermediaries Middlemen, physical distribution firms and marketing service agencies are main market intermediaries. We should choose best market intermediaries for fast distribution of our products. 4. Competitions Company also have to face competition. If company has to win competition, it has to sell good quality product at lower price. 5. Public Public is any group that has an actual or potential interest in or impact on an organisations ability to achieve its interests. Examples are a) Media b) Citizen c) Local public If we have to make public happy, we have to protect our environment. We have to produce our products in less polluted system.

Macro Environment of Business
Macro environment of business means that environment which can not be controlled by company. In this environment economic, social, political and technical environments are included. These environment powers affect not only our company or firm but these may affect whole industry. So, we can not stop of its affect. It means changing in this environment may be risky for our business. I can explain this in simple world. For example a MNC is doing his business from 30 years in India. It is generating high profit and providing high value to the peoples of India. It has controlled its micro

It has also established 1080 research institutes. Incentive for promoting Technology in India • Indian Govt. Establishment of technological and research institute Indian govt. Positive Technical policy India has strong and positive technical policy for technological development. In these institutes major names like space research centre. . unemployment and development of India . India had basic problems like poverty . They can also get good idea for protecting its risk. 2. • State financial corporation is uplifting domestic technology by supporting finance to domestic Industries. has issued order to stop the business of that MNC because it may decrease domestic business. • New inventions relating to marketing like BPO for selling online in international market. has established 500 technological institutes for providing education to Indian students. • New inventions to produce the products. High Growth Rate of Information Technology in India In India. So. MNC's officers should have to prepare for this. India is second country after China who is using internet at large scale for e-commerce . 3. 1. " Explanation We see that in 21st century. medical research centre and agricultural research centre have developed India technically. But Govt. has taken many following steps for technological development. 4.environment. If they study macro environment of business. There are following technological environment factors which affects business. e-education and e-accounting . now has changed and Govt. IT sector is developing with 35% growth rate. technology is changing fastly. it may be very risky. Technological Environment Definition of Technological Environment :“Technological Environment means the development in the field of technology which affects business by new inventions of productions and other improvements in techniques to perform the business work. Now. So. all work is done online and business shops are using machinery at high level. has given 100% income tax exemption for expenses incurred in research of technology in India. This policy opens door to import technology from foreign countries for increasing agricultural and industrial developments. Status of Technological Environment or Technology in India :After Independence. Indian Govt.

In legislature and executive of Govt. so businessman must analyze different families needs . Family :. Educational institutions :. These days. They believe that there is one . Social group. Religion :. 3. In big companies. They provide good knowledge . For controlling banking business. 2. we can add company law 1956 and Factory act 1948.Like family and education institution . it may happen that parent does not allow to use any product . You can see the changes in the political environment with the help of media. Suppose if a student is habitual to drink the tea and if his teacher advice him that this is harmful to his health after his guidance students can avoid to drink tea after this the sale of tea will decrease . It is continue changing. Judiciary sees whether it is legal or illegal. Indian corruption is on the top of politics. decide the different work of nation. there are lots of laws which has been made by Indian Govt. In India.Family is basic part of society from the birth of a person and upto death . has made SEBI. executive and judiciary. Govt. Social status Meaning of Social Environment Social or Societary environment of business means all factors which affects business socially . In these laws. They monitor all external economic factors and to reduce company's economic weaknesses and risks. awareness . so societies ' different factors like family . Social mobility. has made RBI. They control the prices of product of company. As a businessman you should watch it. You can watch and also analyze its effect on your business. economic system and economic conditions. there may be large number of economist whose work is to make economic policies and economic planning. thinking what should students buy or not to buy . They also control the production level and try to best to reach it on optimum level. Social Environment of Business Social class. education . religion is also effects the business socially . Social circle. In the culture of a family . Govt. Religion means the system in which group of persons trust in God . Social position. Main elements Of Societies and its effect on Business 1. Political Environment of Business Political environment is the mixture of the environment of legislature. Media shows the updates of politics. he lives in family so personal decision of buying and selling of goods are affects from family . can increase the demand of goods .Educational institutions are also main part of societies . Political environment also affects business with different business laws.Economic Environment We can introduce economic environment as all the factors which affect business due to changing the economic policies. Many occasion of family like marriage of any family member . For controlling stock exchanges. then sale of such product will decrease . educational institutions and religion affects business . These laws controls all the activities of business. Every business works in a society .

So we have different set of social systems and practices. The cost and their availability are the important economic factors. 1. he can create co-ordination with nature. attitudes. In business. ECONOMIC ENVIRONMENT. 2. After this. We know that the basic economic activity is producing and exchanging commodities to satisfy the people. Then only the positive relations with them could be developed by businessmen. The customs. in Hindu religion . The reactions of people while playing the roles of workers. natural environment changes. Natural Environment of Business Natural environment is the group of natural resources which is used by business. The business process involves some inputs namely the factors of production. All agricultural input will use in manufacturing. rules and regulations in which they sacrifice to use some products and to eat some food . Global worming. So. now it is the duty of business to protect this natural environment. when we use these natural resources without any limit. values. So. Because the behaviour and expectations of the surrounding people are determined by this environment. ceremonies. we have to know its cultural background and social practices. they never use leather products . His machines are also made by nature's metals. manufacturing business gets all raw material from nature. beliefs. which will finally determine price of commodities. Let me explain it in detail. he should produce the goods . They gives many name like Ek onkar sat nam . SOCIO-CULTURAL ENVIRONMENT A business can not exist without the contributions of society. On the other side the output of business is the goods or services that reach consumers. It is transmitted through numerous generations to us. His used energy is also from natural gas or diesel oil or electricity which come from nature. He should support for planting more and more trees. of or people are to be understood to take the right business decisions. . It means the total climate that affect the human activities related to production of wealth. He also stops to misuse of natural resources. To interact efficiently with the society. tsunami and earth quake are its result. famines. om and many more etc.. You know. businessman must analyse the targeted audience and after listening their religious thoughts . floods. Different religions have different principles . Suppose. consumers. suppliers and others are to be studied. Here also the economic phenomenon namely the purchasing power of people will determine the demand level. habits. from where will it get its raw material? For producing goods. They affects the sale of leather industries .supernatural power in this earth and its name is God . Our country follows traditional culture. one business is of manufacturing. tastes and preferences etc.

So. that some countries that could imp[rove the technologies more effectively. The consumer’s tastes and preferences are also changing fast. In the mixed economy like India the role of government is considerable in promoting industries and controlling private business enterprises. have become economic giants in the world. takes a number of control measures on the business units. But its impact on business and industries is quite large. are made by the government. Such regulations include registration under the Acts. banking regulations public utility services etc. control on investment and location. The government as the regulatory organ of the society. indicate that the political climate has numerous influences on business sector. Much legislation for the welfare of workers. public welfare measures etc. computer industry. POLITICAL AND LEGAL ENVIRONMENT This means and includes the various controls. control on prices and trade practices and so. the industrial development. A technological change in a country results in a total change of atmosphere in industry. programs and activities of the government. The technological changes helps business to grow by means of new and improved goods. it reallocates the funds of the society. reduction in cost and variety in goods. on. every unit tries to cope up with the technological changes. Hence a businessman should analyze carefully the trend and changes in the economy. international trade. consumers and the public. licensing. other wise it can not produce improved goods to compete in the market. Therefore. space research and satellites. All these activities affect business units directly or indirectly. We have to remember here. 3. government d3ecides the tax revenue. The term technology indicates macro level improvements in the method of production. The government’s policies on foreign exchanges. In the economic planning the sources of funds and its allocation to various sectors are decided by the govt. and the results of industrial research and development ( R & D ) are converted into innovative products and services. the scientific inventions. electronic industry. public expenditure and public debt. public sector industries.There are also some general economic conditions that affect volume of trade domestically and in foreign markets. For example. TECHNOLOGICAL ENVIRONMENT This factor may be considered as a part of economic environment. to know his opportunities and challenges. 4. In the fiscal policy. assistance for agriculture. employment generation. That is. Moreover. resulted in mushroom growth of industries and wide application of these facilities for the development of business. .

6. This is because the producers of goods and services become unlimited. NATURAL ENVIRONMENT The natural resources are the gifts to a country by which economic activities could be developed. Now. especially the businessmen. holes in ozone layer. . There are many challenges to the natural environment. coil conditions. The globalization concept has opened up the market for international competition as well as opportunities. On the other side. For example. The technology and resources of MNC’s are very much improved and our businessmen should increase their ability up-to the international standard. challenging with international standards will also become a part of this game in the near future. The merit claimed for globalization is that our share in the world trade would increase due to multilateral agreements. Finding solutions is not only the moral duty of the businessmen but also for their future business growth. other than the local competitors. as it is a question of survival and growth in the market. water and atmospheric pollution. we have to increase our productivity. This is so important. Hence close watch on the competitive strategies on prices. materials and also the climate. air. help in this progress. COMPETITIVE AND GLOBAL ENVIRONMENT To meet out the competition is the routine task for business. “green house effect’ on sea levels. which will affect the society in the long run. soil erosion. should take care I preserving natural and ecological balance of the earth. improved products and promotion appeals will help a businessman to take right decisions. rainfall etc.5. Thus leading the competitors or following them is unavoidable for business. climatic disorders. the people.. acid-rains and so on. Also there is a danger of excess reliance of developing nations on the developed countries. The minerals. For this. our businessmen have to face the challenges from the multinational corporations (MNC’s) and trans national corporations.

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