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SEETHA M. J.
Asst. Professor, Dept. of Commerce & Management, Government First Grade College, Ranebennur.
MEANING OF BUSINESS
Business is an activity which is primarily pursued with the object of earning. It involves production, exchange of goods & services to earn profits or earn a living. Literally ‘ Business ‘ means a state of being busy.
MEANING OF ENVIRONMENT
Environment refers to all external forces which have a bearing on the functioning of business.
Business environment refers to the totality of all the relevant forces external to beyond the control of an individual business enterprise @ its management.
SCOPE OF BUSINESS All activities connected with Production Trade Banking Insurance Finance Agency Advertising Packaging & branding. etc. .
. Mission – Outlines the fundamental purpose of the organisation.Broad explanation of why the firm exists and where it is trying to lead.Vision .
Power Employee satisfaction @ development Quality products @services Market leadership Challenging Joy of creation Service to society Good corporate citizenship . Growth.OBJECTIVES OF BUSINESS Profit.
NEW ENTRANTS. SUBSTITUTE PRODUCTS. RIVAL FIRMS. BUYERS. .TYPES OF ENVIRONMENT MICRO ENVIRONMENT SUPPLIERS.
CULTURAL ENVIRONMENT . TECHNOLOGICAL ENVIRONMENT. GLOBAL ENVIRONMENT AND SOCIO. MACRO ENVIRONMENT NATURAL ENVIRONMENT. ECONOMIC ENVIRONMENT. POLITICAL – LEGAL ENVIRONMENT.
To keep oneself dynamic.IMPORTANCE OF BUSINESS ENVIRONMENT Provide an understanding of current & potential changes taking place. Facilitate & foster strategic thinking in organization. . Provides inputs for strategic decision making.
NATURAL ENVIRONMENT Manufacturing. Agriculture. Trade. Transportation & communication. . Mining activities. Technology.
depletion of rain forests. etc.. global warming. Environmental affairs should not be taken as incidental or secondary function of a firm.Impact on business. . waste management. Issues like ozone depletion. destruction of animal habitats. Both employees & consumers are resentful of firms taking more than giving to natural environment.
Environment has brought in a category of people called ENVIRONMENTALISTS. . Lastly firms should formulate & implement strategies from environmental perspective.
ECONOMIC ENVIRONMENT Is Indian economy a developed or under-developed ? .
In equal income distribution. Dominance of agriculture.Features of Indian economy. Existence of rich resources. Low per capita income. Low standard of living & high poverty. Unemployment & under employment. . Inadequate capital formation.
Dualistic economy. Infrastructural inadequacies. Technological backwardness. .
investment B ) Non. A) Economic factors Natural resources Capital formation Technological progress Infrastructure Size of market & .economic factors Political system Social system Luck.Factors affecting economy. .
S. Refinance policy.R.R.L. . Bank rate Open market operations C.LEGAL ENVIRONMENT GENERAL CREDIT CONTROL.R.
SELECTIVE CREDIT CONTROLS Specific securities Discriminatory rates of interest Moral suasion Direct action. .
Call/ notice money Commercial bills Treasury bills Certificates of deposits Commercial papers .MONEY MARKET.The market in which short term funds are borrowed & lent. Operations in money market.
FISCAL POLICY BUDGETS UNION BUDGET STATE BUDGET Trends in revenue Trends in expenditure .
IMPACT OF FISCAL POLICY Fiscal policy & savings & capital formation Fiscal policy & economic inequalities Fiscal policy & inflation control .
promotion of productivity & employment generation. .Industrial policy Objectives of 1991 Industrial Policy. Encouragement of Indian entrepreneurship. Self reliance to build on many sided gains already made.
Increasing the competitiveness of industries for the benefit of the common man. Development of indigenous technology through greater investment in R&D. Removing the regulatory system and other weakness. Enhanced support to the small scale industries. . Incentives for the industrialization of backward areas.
To link Indian market to Global market. Protect the interest of workers. Abolish the monopoly of any sector in any field of manufacture expect on strategic or security grounds. . Ensure running of public sector undertakings on business lines & cut their losses.
EXIM POLICY 2002-2007 Service exports Agro exports Status holders Hardware & software Gem & jewellery sector Export clusters Rehabilitation of sick units .
Removal of quantitative restrictions Special economic zones scheme EQU scheme EPCG scheme Advance license Reduction of transaction cost .
. High expectations of consumers. System complexity. Social change.TECHNOLOGICAL ENVIRONMENT Technology and society Technology reaches people through business. Technological phases and social system they create.
Jobs tend to become more intelluctual. Need to spend on R&D. Rise and decline of products and organisation. Need for bio profession and multi professional managers. Business boundaries redefined. Increased regulation and stiff opposition. . Problem of techno structure.Technology and Economy Increase productivity.
Resistance to change. Flexible manufacturing system. Total quality management. Fear of risk.PLANT LEVEL IMPLICATION Technology and organization structure. . Business process re-engineering.
GLOBAL ENVIRONMENT Meaning of Globalization :It means several things to several people. . The company commits itself with several manufacturing locations around the world. The ability to compete in domestic markets with foreign competitors.
.Features of Globalization Configuring anywhere in the world Interlinked and independent economies Lowering of trade and tariff barriers Effect on related industries & ancillaries Infrastructural resources In creating trend towards privatization Entrepreneurs unit have a central economic role.
Mobility of skilled resources Market side efficiency Formation of regional blocks CHALLENGES:Maintaining competitiveness Govt. & trade regulations Developing an international perspective Managing diversity .
STRATEGIES IN GLOBALISATION Deciding whether to go global Deciding which markets to enter Deciding how to enter the market Learning to handle differences Adjusting the management process Selecting a managerial approach Deciding organization structure .
WTO – WORLD TRADE ORGANIZATION Establishment year – 1st January 1995 No. of members – 150 India in WTO – Founder member Successor of GATT .
Basic principles of WTO Non – discrimination Transparency Binding & enforceable commitments Reciprocity Safety valves .
Functions of WTO Administering & implementing the multilateral & pluri lateral trade agreements which together make up the WTO Acting as a forum for multilateral trade negotiations Seeking to resolve trade disputes Overseeing national trade policies & Co-operating with other international institutions involved in global economic policy making .
It provides information & advise on export markets & marketing techniques. based on WTO principles.Arguments for joining WTO The value to development of pursuing open market policies. 7 assists in establishing export promotion & marketing services & training personnel require for these services. . is widely recognized & appreciated. it makes far more sense to be part of the multilateral trading system than stay out of it. As long as India needs to export & import.
it is logical to believe that India will obtain large gains in these sectors. . Since India’s existing & potential export competitiveness lies in clothing. forestry & fisheries product groups. agriculture. Another advantage of WTO membership stems from the fact that India is saved from entering into multiple bilateral trade on negotiations with other countries.
India’s position in all these sectors is advantageous to her & provisions are favorable to the countries. . WTO provides for a multilateral set of rules which are beneficial to a country like ours.
It ensures necessary climate for domination & hegemonisation by the consortium of the capitalist countries. WTO will not ensure open trade for goods produced by developing countries.Arguments against membership Removal of trade barriers will not guarantee expansion in world trade. .
The worst fears expressed about the WTO agreement relate to the steep hike in prices of drugs & agricultural inputs. . Removal of quotas could easily be lost because of the new rules & disciplines & potential for trade harassment.
.TRADING BLOCKS Trade creation & trade diversion Prices & competition Economies of scale Dynamic effects of integration.
THANK YOU .
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