Business

Environment
Analysis
 Definition
The Environment of Business
consist of all of those things to
which it may be influence
directly or indirectly Reinnecks
&
Schoell
 Nature
☻ Factors vary from
Country to Country
☻ Necessary for Proper
Business Management
 Significance
♣ Internal Business Environment
♣ Government Policies
♣ Optimum Use of Resources
♣ Market Study
♣ Long-term Business Strategy
 Parts of
Environment
 Economic

Domestic International
 Social
&
Cultural
Political
&
Legal
 Natural
Atmosphere
Environmental
Scanning
 First Step of Environmental Analysis

Involves General Environmental Factors

Environmental
Scanning
Process
 Monitoring

Scanning Forecasting

Assessment
 Monitoring
Tracking
Environmental
Trends
 Scanning
Frequently Following
Signals & Indicators
 Forecasting
Projecting Direction and Scope
of Environmental Change
 Assessment
Identification and Evaluation
of
Environmental Changes
and
Effect on Business
Capitalism
&
Socialism
Capitalism
Also Known as –
“Free Market Economy “
“Free Enterprise Economy”
Economic System in Which
most of the means of
production are privately
owned and production is
guided and income distributed
largely through the operation
of markets.
 Principals of Capitalism
People are free –
 To choose how they use their capital
resources
 To do what they wish with their
property
 Own Property
 Discover new solutions to old
problems and develop new products
Characteristics
of
Free Enterprise
 Division of Labor
 Individuals Undertaking Various tasks
 Efficiency in Producing Goods
 Specializations
 Grater Creation of Wealth
 Diversity of Product and Services
 Price
• Controlling Factor
• Keep Up Demand
• Order of Economic Exchange
• Rotation System for Factors of
Production
• Fair Means of Allocation of Factor
of Production
 Profit
“Portion of Revenue That
Exceeds Total Expenses”
o Guarantees Operation
o Provide for Innovation
o Provide for Expansion
o Prize for Risk Taker
 Rules
“Direction Agreed By
the Whole System”
 Prevent Illegal Transaction
 Validity of Business
 Protects the Rights of
Transacting Parties
 Unplanned Order
Establishment of Society based on
Market Relationship
Result of Spontanous Human
Actions
Not Dependent on People
Goods and Services
Goods –
 manufactured articles or products
of art or craft
 Tangible
 provide the basic wealth of
society
Goods and Services
Services –
 Function of Serving for
Considerations
 May Use Goods
 Signal of Wealth
Goods and Services
A motion picture, is a
product
Showing it on
projector, and a
theater, is Service
 Variants
of
Capitalism
 Open Market
 economic decisions are made in
the marketplace.
 right to own a business or to work
 buyers and sellers fixes the price
 Competition between businesses
 economic system combined with
high levels of government
regulation
 Mixed Economy
 Free-enterprise System with
a Modified Socialism
 Essential Industry Owned by
Govt.
 Private Sector Heavily
Regulated and Taxed
 Advantages of Capitalism
 Economic freedom is the most
basic of human liberties
 Greater opportunities for
advancement
 Based on individual effort and
ability
Critics of Capitalism
 Lacks Security and
Stability
 Failed to achieve a high
standard of living
 Inequalities of wealth
Socialism
System of social organization
in which property and the
distribution of income are
subject to social control
rather than individual
determination or market
forces.
Principals' of Socialism
 Nationalizations of
Means of Production
 Delegation of decision-
making authority
 Workers' control
Principals' of Socialism
Equal distribution of
National Income
 Levelling of status
differences
 Redistribution of Property
Variants
of
Socialism
Utopian Socialism
(18th Century)

Henri de Saint-Simon

Charles Fourier

Robert Owen.
 Utopia – “No Place”

Ideal Human Society

It is possible to create a
harmonious, cooperative human
society in which everyone is an
owner of private property—that is,
the means of production of
wealth.
Principals of Utopian Socialism
 Industrialism and Technology as
the means to a better world
 Maximum use of the potential
of every member.
 Unity And Cooperation
 Self-Sufficiency
 Implementation
-Hutterian Brethren. ( Canada)
-Owens's New Harmony Inc
(U.S.A)
-Biotechnic Research and
Development (Ireland)
Christian Socialism
(19th-century)

Frederick Denison Maurice

John Malcolm Ludlow
Charles Kingsley
“a new order that would
rest on the Christian
principles of equal rights
and democratic distribution
of economic power.”
- Walter Rauschenbusch
Principals of Christian Socialism

 Concern for the poor

 Promoted partnership in production
and profit sharing in industry
 Encouraged workers' and
consumers' cooperatives
 Workers' education
Implementation
-Europe 18th Century
-United States 19th Century

“Owens's New Harmony Ind.”

Democratic Socialism
(19th century)

Karl Marx
George Bernard Shaw
Beatrice
Sidney Webb
 Gradual evolution of society from
capitalism to the worker state
 Education of the public and
peaceful political change.
 Social Legislation
 Gradually take over all production
of goods
Revolutionary Socialism
(20th century)

Adolf Hitler
Mao Zedong
Vladimir Ilich Ulyanov (Lenin)
Use of Violence for Economic
Justice
 Equal distribution of land and
income.
 Organizations of workers
seizing the means of
production from the capitalists
Advantages of Socialism

• Emergences of Welfare State

• Economic Equality
• Equal Distribution of Wealth
• Responsible for Labor Laws
Criticisms of Socialism
• Economic calculation impossible
• Economic Planning on the basis of

guesswork
• All prices for goods were simply
set by the government and frozen

there
•
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