ECONOMIC

ENVIRONMENT
ECONOMIC ENVIRONMENT

ECONOMIC ENVIRONMENT refers to that entire

economic factor which has a bearing functioning of
the business unit.
Business depends on the economic environment for
all the needed inputs.
It also depends on the economic environment to sell
the finished goods.
COMPONENTS OF ECONOMIC
ENVIRONMENT

Income and wealth

Employment levels
Productivity
IMPORTANCE OF ECONOMIC
ENVIRONMENT
1. Capitalizing early opportunities
2. Activating Management to changing needs
3. Image building
4. Basis of Strategy
5. Intellectual Stimulation
6. Continuous learning
IMPACT OF ECONOMIC ENVIRONMENT ON
BUSINESS

i. Demand and Offer

ii. Marginal and Complete Power
iii. Cash as well as Finance
iv. Financial Development and Growth
v. Income and Employment
vi. Common Price level
vii. Industry Cycles
FACTORS OF ECONOMIC ENVIRONMENT
1. Growth Strategy
2. Economic System
3. Economic Planning
4. Industry
5. Agriculture
6. Infrastructure
7. Financial and Fiscal factor
8. Removal of Regional imbalance
9. Price and Distribution Control
10.Economic Reforms
11.Per Capita and National Income
NATURAL
ENVIRONMENT
NATURAL ENVIRONMENT

Natural Environment is an environment

that encompasses all living and non-
living things occurring naturally on
Earth or some region thereof.
FACTORS AFFECTING NATURAL
ENVIRONMENT
1. Regulation Factor
2. Permit Factor
3. Compliance Factor
4. Environment Contaminants
5. Distance from the sea
6. Direction of prevailing winds
7. The shape of the land
8. Distance from the Equator