competitors. other government activities. social and economic factors and technological developments. regulations. and includes customers. suppliers. . stakeholders. industry trends.• MEANING : Business environment encompasses all those factors that affect a company's operations.


e. the environmental factors may be classified into different types of levels. it can alter or modify these factors as these are internal in the organization. .• TYPES OF ENVIRONMENT – • On the basis of extent of intimacy with the firm. External environment • Internal environment – The factors in internal environment are generally regarded as the controllable factors b/c the company has control over these factors i. • 1. Internal environment • 2.

• The external environment is further divided into two parts :- • Macro environment – The are external factors which have no direct contact with the business but have a great impact on business.e. they are uncontrollable. However in few cases company can possibly change the external factors. • Microenvironment – These are external factors which have a direct contact and intimate impact on the firm. .• External Environment – The external factors are beyond the control of the company i. • Microenvironment is also k/n as task environment & operating environment.

attitude.g. commitment. • Internal Power Relationship • Human Resources Characteristics of human resource like skill. morale. quality. .• Internal Environment • Mission & Objectives For e. • Management Structure & Nature In Wipro majority of the share is held by promoters whereas the promoter’s positions is vulnerable in TATA. Ranbaxy mission is to become a research based international pharmaceutical company.

launching new products etc. forming joint ventures or others alliances. . entering purchase or sale contracts. soliciting marketing intermediaries.• Company Image & Brand Equity • The image of the company matters while raising finance.

legal. These factors include competitor.Major external and uncontrollable factors that influence an organization's decision making. • MICROENVIRONMENT – Factors in an organization's immediate area of operations that affect its performance and decision making freedom. technological changes. and natural forces. These factors include the economic. and social conditions. political. supplier. demographics. and affect its performance and strategies. distribution channels.• MACROENVIRONMENT . and the general public. customers. .

shifts in consumer preferences or entry of new competition in the market.• NATURE OF BUSINESS ENVIRONMENT • 1. Totality of external forces: Business environment is the sum total of all things external to business firms and. • 2. as such. • 3. is aggregative in nature. especially when environment changes are taking place too frequently as in the case of information technology or fashion industries . Dynamic nature: Business environment is dynamic in that it keeps on changing whether in terms of technological improvement. Uncertainty: Business environment is largely uncertain as it is very difficult to predict future happenings.

• 4. It helps in Improving performance . It helps in Coping with rapid changes. It helps firm to identify threats and early warning signals • 3. • 2.• 4. Relativity: Business environment is a relative concept since it differs from country to country and even region to region • SIGNIFICANCE – • 1. It helps firm to identify opportunities and getting the first mover advantage.

• It is often positively correlated with the standard of living though its use as a stand-in for measuring the standard of living has come under increasing criticism and many countries are actively exploring alternative measures to GDP for that purpose . GDP . It is the market value of all final goods and services made within the borders of a country in a year.• BASIC INDICATORS OF ECONOMIC DEVELOPMENT – • 1.The gross domestic product (GDP) or gross domestic income (GDI) is a measure of a country's overall economic output.

interest for capital. Income approach – • This method measures GDP by adding the incomes that firms pay households for the factors of production they hire. • 1. rent for land and profits for entrepreneurship . all of which should in principle give the same result.• Determining GDP • GDP can be determined in three ways. Product (or output) approach • It is the market value of all final goods and services made within the borders of a country in a year • 2.wages for labor.

Expenditure approach.M) where: C = household consumption expenditures / personal consumption expenditures I = gross private domestic investment G = government consumption and gross investment expenditures X = gross exports of goods and services M = gross imports of goods and services . • Measuring the total expenditure of money used to buy things is a way of measuring production GDP = C + I + G + (X .• 3.

GDP = Gross Domestic Product Net factor income from abroad = difference between income earned in foreign countries by residents of a country and income earned by non-residents in that country. which is the combined value of all the final goods and services produced in a country during an accounting year. GNP . .2.It stands for Gross National Product. • Calculation of GNP GNP= GDP + Net factor income from abroad where. including net factor income from foreign countries.

GDP is $300 million. Besides. • For example. GNP is a broader concept. . the normal residents of the country settled abroad produced goods and services worth $50 million. if the total value of goods and services produced in a country during a year was $300 million. This includes $25 million produced by foreigners working in that country. In this case.• GNP versus GDP • While GDP is the combined value of all goods and services produced in a country. It includes the final value of goods and services produced by the residents of a country. while GNP is $325 million (300-25+50). irrespective of their geographical location.

GNP is the core concept of national income accounting. developing (middle development). and underdeveloped (low development) countries. . 3.• IMPORTANCE OF GNP – • GNP helps to measure the contribution of residents of a country to the flow of goods and services within and outside the national territory. Hence.The Human Development Index (HDI) is a composite statistic used to rank countries by level of "human development" and separate developed (high development). HDI .

which means the average number of subsequent years of life for someone now aged x.… • The statistic is composed from data on life expectancy.• Cont. according to a particular mortality experience. It is denoted by ex. • HDI India Rank .134 . education and per-capita GDP (as an indicator of standard of living collected at the national level. • Life expectancy is the expected (in the statistical sense) number of years of life remaining at a given age.

. developed by the United Nations (UN). It aims to show the inequalities between men and women in the following areas: long and healthy life. knowledge. and a decent standard of living. Gender-related Development Index • The Gender-related Development Index (GDI) is an indication of the standard of living in a country. It is one of the five indicators used by the United Nations Development Programme in its annual Human Development Report.4.

31 .• THE GENDER EMPOWERMENT MEASURE (GEM) • The Gender Empowerment Measure (GEM) is a measure of inequalities between men's and women's opportunities in a country. It is one of the five indicators used by the United Nations Development Programme in its annual Human Development Report.0. and power over economic resources.128 • Ratio of estimated female to male . • India – Statistics (GEM) • Rank . It combines inequalities in three areas: political participation and decision making. economic participation and decision making.

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