Meaning of Business Environment:

Business environment refers to forces and institutions

outside the firm with which its members must deal to
achieve the organisational purposes. Here

• Forces = economical, social, political, technological etc

• Institutions = suppliers, customers, competitors etc

It includes all those constraints and forces external to a

business within which it operates. therefore,

• The firm must be aware of these external forces and

institutions and

• The firm must be nagged keeping in mind these forces

and institutions so that the organisational objectives are
achieved. .

Features of Business Environment

1. Totality of external forces: Business environment is

the sum total of all the forces/factors external to a
business firm.
2. Specific and general forces: Business environment
includes both specific and general forces. Specific forces
include investors, competitors, customers etc. who
influence business firm directly while general forces
include social, political, economic, legal and technological
conditions which affect a business firm indirectly.
3. Inter-relatedness: All the forces/factors of a business
environment are closely interrelated. For example,
increased awareness of health care has raised the demand
for organic food and roasted snacks.
4. Dynamic: Business environment is dynamic in nature
which keeps on changing with the change in technology,
consumer’s fashion and tastes etc.
5. Uncertainty: Business environment is uncertain as it is
difficult to predict the future environmental changes and
their impact with full accuracy.
6. Complexity: Business environment is complex which is
easy to understand in parts separately but it is difficult to
understand in totality.
7. Relativity: Business environment is a relative concept
whose impact differs from country to country, region to
region and firm to firm. For example, a shift of preference
from soft drinks to juices will be welcomed as an
opportunity by juice making companies while a threat to
soft drink manufacturers.
 IMPORTANCE OF BUSINESS
ENVIRONMENT

1. Identification of opportunities to get first mover

advantage: Understanding of business environment helps
an organization in identifying advantageous opportunities
and getting their benefits prior to competitors, thus
reaping the benefits of being a pioneer.
2. Identification of threats: Correct knowledge of
business environment helps an organization to identify
those threats which may adversely affect its operations.
For example, Bajaj Auto made considerable improvements
in its two wheelers when Honda & other companies
entered the auto industry.
3. Tapping useful resources: Business environment
makes available various resources such as capital, labour,
machines, raw material etc. toa business firm. In order to
know the availability of resources and making them
available on time at economical price, knowledge of
business environment is necessary.
4. Coping with Rapid changes: Continuous
study/scanning of business environment helps in knowing
the changes which are taking place and thus they can be
faced effectively.
5. Assistance in planning and policy
formulation: Understanding and analysis of business
environment helps an organization in planning &policy
formulation. For example, ITC Hotels planned new hotels
in India after observing boom in tourism sector.
Helps in Improving performance: Correct analysis and
continuous monitoring of business environment helps an
organization in improving its performance.
 DIMENSIONS/COMPONENTS OF
BUSINESS ENVIRONMENT

1. Economic Environment: It has immediate and direct

economic impact on a business. Rate of interest, inflation
rate, change in the income of people, monetary policy,
price level etc. are some economic factors which could
affect business firms. Economic environment may offer
opportunities to a firm or it may put constraints.
2. Social Environment: It includes various social forces
such as customs, beliefs, literacy rate, educational levels,
lifestyle, values etc. Changes in social environment affect
an organization in the long run. Example: Now a days
people are paying more attention towards their health, as
a result of which demand for mineral water, diet coke etc.
has increased while demand of tobacco, fatty food
products has decreased.
3. Technological Environment: It provides new and
advance ways/techniques of production. A businessman
must closely monitor the technological changes taking
place in the industry as it helps in facing competition and
improving quality of the product. For Example, Digital
watches in place of traditional watches, artificial fabrics in
place of traditional cotton and silk fabrics, booking of
railway tickets on internet etc.
4. Political Environment: Changes in political situation
also affect business organizations. Political stability builds
confidence among business community while political
instability and bad law & order situation may bring
uncertainty in business activities. Ideology of the political
party, attitude of government towards business, type of
government-single party or coalition government affects
the business Example: Bangalore and Hyderabad have
become the most popular locations for IT due to
supportive political climate.
5. Legal Environment: It constitutes the laws and
legislations passed by the Government, administrative
orders, court judgements, decisions of various
commissions and agencies. Businessmen have to act
according to various legislations and their knowledge is
very necessary. Example: Advertisement of Alcoholic
products is prohibited and it is compulsory to give
statutory warning on advertisement of cigarettes.

CHILD LABOUR
Child labour refers to the exploitation of children through
any form of work that deprives children of their childhood,
interferes with their ability to attend regular school, and is
mentally, physically, socially or morally harmful. Such
exploitation is prohibited by legislation
worldwide, although these laws do not consider all work
by children as child labour; exceptions include work by
child artists, family duties, supervised training, and some
forms of child work practiced by Amish children, as well
as by Indigenous children in the Americas.
Child labour has existed to varying extents throughout
history. During the 19th and early 20th centuries, many
children aged 5–14 from poorer families worked in
Western nations and their colonies alike. These children
mainly worked in agriculture, home-based assembly
operations, factories, mining, and services such as news
boys—some worked night shifts lasting 12 hours. With the
rise of household income, availability of schools and
passage of child labour laws, the incidence rates of child
labour fell.

The causes and nature of child labour

The factors that contribute to child labour – including
“hazardous” child labour –include the poverty and
illiteracy of a child’s parents, the family’s social and
economic circumstances, a lack of awareness about the
harmful effects of child labour, lack of access to basic and
meaningful quality education and skills training, high rates
of adult unemployment and under-employment, and the
cultural values of the family and surrounding society.
Often children are also bonded to labour due to a family
indebtedness. Out of school children (OOSC) or those
children at risk of dropping out can easily be drawn into
work and a more vulnerable to exploitation. Girls,
especially those from socially disadvantaged groups, tend
to be at a higher risk of being forced into work.
Other reasons for children being forced into work:
-Poverty and a lack of livelihood options lead to a child’s
“need” to contribute to the family income,
-Due to conflicts, droughts and other natural disasters, and
family indebtedness,
-Rural poverty and urban migration also often exposes
children to being trafficked for work.

CONCEQUENCES OF CHILD LABOUR

The picture that emerges is dark. Children are working in
hazardous export oriented industries like fireworks, match
works, electroplating, beedi rolling, glass blowing,
brassware, lock making, glass blowing, lead mining and
stone quarrying amongst several others. These are places
that have a severe negative impact on the health of
anyone working there. In the case of children, by the time
they begin touching their teens, they are already inflicted
with several life threatening diseases.

Sitting at home in a city, we have no idea of the terrible

conditions that these children are made to work in and for
more than ten to twelve hours a day. In many cases, these
children are offered by the parents in lieu of a loan that
they may have taken from the factory owner. So it’s a
barter deal; loan in cash that is repaid in kind through the
child. Not all are barter deals. Some work for money where
the pay is as little as ten rupees per day!

There are other situations where children are made to

work. These are typically home run cottage industries like
handloom and carpet weaving. The typical explanation
given by the parents are that they see the child as an
additional resource for income generation
 TYPES OF CHILD LABOUR
Slavery is where one person is owned by and made to
work for another person without having any say over what
happens to them. Slaves are held against their will from
the time of their capture, purchase, or birth, and are not
allowed to leave or to refuse to work.

Child trafficking is the illegal trading (buying, selling and

movement) of children for labour or sexual exploitation.
Children are trafficked for many reasons, including forced
labour, prostitution and recruitment as child soldiers and
beggars.

Debt bondage is forced labour, where work is exchanged

to pay off loans that people cannot pay off with money or
goods. For example, a poor family may hand over their
child to someone to pay off their debt, and that child will
have to work for years until the debt is cleared.

Serfdom is when a person is forced to live and work on

land belonging to another person, often with little or no
pay.

Forced labour is when someone is made to work against

their wishes. For example, Children in armed conflict are
forced to fight or to work as cooks, porters and
messengers. These children are abused and exploited,
often being forced to kill or maim other human beings.

How many child labourers are there in

India?
According to the ILO, there are around 12.9 million
Indian children engaged in work between the ages of 7
to 17 years old. When children are employed or doing
unpaid work, they are less likely to attend school or
attend only intermittingly, trapping them in the cycle of
poverty. Millions of Indian girls and boys are going to
work every day in quarries and factories, or selling
cigarettes on the street. The majority of these children
are between 12 and 17 years old and work up to 16
hours a day to help their families make ends meet. But
child labour in India can start even earlier with an
estimated 10.1 millionchildren between the ages of 5
and 14 years-old engaged in work.

As children get older, their involvement in employment

also increases. In India, 20 percent of all children aged
15 to 17 years old are involved in hazardous industries
and jobs . Measuring the exact scale of child labour in
India is difficult as it is often hidden and under-
reported. There are almost 18 million children between
the ages of 7 to 17 years old who are considered
“inactive” in India, neither in employment nor in school.
These missing girls and boys in India are potentially
subject to some of the worst forms of child labour.

CHILD LABOUR ACTS AND LAWS

The Factories Act of 1948: The Act prohibits the
employment of children below the age of 14 years in any
factory. The law also placed rules on who, when and how
long can pre-adults aged 15–18 years be employed in any
factory.
The Mines Act of 1952: The Act prohibits the
employment of children below 18 years of age in a mine.
The Child and Adolescent Labour (Prohibition and
Regulation) Act of 1986: A "Child" is defined as any
person below the age of 14 and the CLPR Act prohibits
employment of a Child in any employment including as a
domestic help (except helping own family in non-
hazardous occupations). It is a cognizable criminal offence
to employ a Child for any work. Children between age of
14 and 18 are defined as "Adolescent" and the law allows
Adolescent to be employed except in the listed hazardous
occupation and processes which include mining,
inflammable substance and explosives related work and
any other hazardous process as per the Factories Act,
1948.
The Juvenile Justice (Care and Protection) of Children
Act of 2015: This law made it a crime, punishable with a
prison term, for anyone to keep a child in bondage for the
purpose of employment.
The Right of Children to Free and Compulsory
Education Act of 2009: The law mandates free and
compulsory education to all children aged 6 to 14 years.
This legislation also mandated that 25 percent of seats in
every private school must be allocated for children from
disadvantaged groups and physically challenged children.
 HOW TO STOP CHILD LABOUR
 To prevent child labour, incidence of poverty needs to be
reduced first, so that poor people do not have to send
their children to earn their bread and butter.
 Spreading literacy and education is a potent weapon
against the practice of child labour in India, because
illiterate persons do not understand the implications of
child labour.
 Another way to stop child labour in India is to eliminate or
rein in unemployment. Because of inadequate
employment, many families cannot afford to meet all their
expenses. If employment opportunities are increased, they
will be able to let their children read and write and
become worthy citizens.
 To stop child labour in India, we will have to first change
our own thinking. We have to ensure that first of all, we do
not keep any child at work in our own home or office. We
have to remember that we are not doing any favour to
children of tender age by paying them money in exchange
of their labour, but we are rather playing with their future.
 We also need to spread awareness about child labour in
India, so that people can understand that child labour is
messing with the future of the country. They will have to
understand that there is no future for India if its children
are weakened mentally and physically through the practice
of child labour.
CONCLUSION
Children constitute the nation’s valuable human resources.
The future well being of the nation depends on how its
children grow and develop. The great poet Milton said
“Child Shows the man as morning shows the day”. So it is
the duty of the society to look after every child with a view
to assuring full development of its personality. Children
are the future custodians and torch bearers of the Society:
they are the messengers of our knowledge, cultural
heritage, ideologies and philosophies. Children are really
future components in the form of great teachers,
scientists, judges, rulers, doctors, planners, engineers,
politicians on whom the entire society founded (rests).
Unfortunately millions of children are deprived of their
childhood and right to education and there by they are
subjected to exploitation and abuse.