Business Environment: Dr. Niharika S Bajeja

Business Environment
Dr. Niharika S Bajeja
Module 1
1. Understand the nature and scope of
business
2. Characteristics of contemporary
business
3. Define vision, mission and goals of
business
4. Criticism of business

5. Understand the nature of environment
6. Understand the
environmental analysis
process of
Introduction
7. Suggest a suitable organizational
Learning Objective
arrangement for scanning the
environment
Dr. Niharika S Bajeja, Faculty, Faculty of Liberal Studies, Marwadi University TREY 2
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Introduction to

the Business
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Introduction
Human Age to Robots
pORTUGESE-eNGLISH-
dUTCH-fRENCH
Indian Business Environment
Supercomputers to Palm
Introduction to Business Environment
• When asked “What is Environment?” in fifth grade. I replied, “Everything

we depend on.” Since then, my perception of the environment hasn’t
changed much. In the same line of thought let us understand what is
meant by the business environment and the importance of the business
environment.
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Meaning
• A business can be established, but to successfully sustain a business, the business

needs resources like finance, for which it has to depend on financial institutions.
Acceptance of social norms, for which it has to depend on society. Proper market
conditions, for which it has to depend on the market. The sale of products/services,
for which it has to depend on the customers. The labour, for which it has to depend
on society.
• Then there are natural resources and raw material, for which it has to depend on
Nature. Also, the legal support of the government, for which it has to depend on the
government. There are many factors and dimensions that affect Business
Environment. These factors are many different components of a single concept called
Business Environment.
•
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Business Environment
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Dynamics or Components of Business Environment
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The Dynamics of Business Environment
• Components of environment
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Internal Environment
Internal environment refers to the framework, the situation and the factors
within the business organization and their impacts on its working.
Factors affecting the internal environment:
• Relationship between internal stakeholders
• Physical assets
• Human assets
• Corporate social responsibility
• Organizational value system
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External Environment
• A business organization is also influenced by certain forces, institutions and
organizations operating from outside.
• The influence is both individual and collective.
• Can be divided into
• The micro-environment
General public, customers, suppliers of input, workers along with trade unions,
market intermediaries, competitors and the public
• The macro-environment
Constitutes economic and non-economic factors like Political Environment,
Economic Environment, Social Environment, Technological & Legal Environment,
International Business Environment
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Major Elements of Political Environment
• The Constitution of the country
• Prevailing political system
• The degree of politicisation of business and economic issues
• Dominant ideologies and values of major political parties  The nature and profile of political leadership and
thinking of political personalities
• The level of political morality
• Political institutions like the government and allied agencies
• Political ideology and practices of the ruling party
• The extent and nature of government intervention in business
• The nature of relationship of our country with foreign countries
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Components of Economic Environment
Existing structure of the economy in terms of relative role of private

and public sectors.
The rates of growth of GNP and per capita income at current and
constant prices
Rates of saving and investment
Volume of imports and exports of different items
Balance of payments and changes in foreign exchange reserves
Agricultural and industrial production trends
Expansion of transportation and communication facilities
Money supply in the economy
Public debt (internal and external)
Planned outlay in private and public sectors
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Elements of Social Environment
• Attitudes towards product innovations, lifestyles, occupational, distribution and consumer preferences
• Concern with quality of life
• Life expectancy
• Expectations from the workforce
• Shifts in the presence of women in the workforce
• Birth and death rates
• Population shifts
• Educational system and literacy rates
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Legal & Technological Environment
• Legal environment includes various legislations passed by the
government, administrative orders issued by government
authorities, court judgments as well as decisions rendered by
various commissions and agencies at every level of the
government— center, state or local.
• Technological environment includes forces relating to scientific
improvements and innovations which provide new ways of
producing goods and services and new methods and techniques
of operating a business.
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Features of
Business
Environment
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• Business environment can be characterized in terms of
• totality of external forces
• specific and general forces
• inter-relatedness
• dynamic nature
• uncertainty
• complexity
• relativity
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Importance of
Business
Environment
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• Importance of Business Environment
• It Helps in Identifying Opportunities and Making First Mover
Advantage
• It Helps the Firm Identify Threats and Early Warning Signals
• It Helps in Tapping Useful Resources
• It Helps in Coping With Rapid Changes
• It Helps in Assisting in Planning and Policy Formulation
• It Helps in Improving Performance
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SWOT Analysis
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• A SWOT matrix is a framework for analyzing your strengths and weaknesses as well as the opportunities and
threats that you face. This helps you focus on your strengths, minimize your weaknesses, and take the greatest
possible advantage of opportunities available to you.
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Individual SWOT Analysis
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Firm Specific SWOT Analysis
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Environment
Scanning
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Michael Porters Five Dimension Model
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Environmental Scanning
• Identify the External Opportunities &

International
threats and their effect on strategy
Factors
• Examine Seven key factors
Political Factors
Employment
Factors
Economic Social Factors

Factors
Organisation
Demographic Technological
Factors FActors
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Demographic Environment
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Economic Environment
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Employment Factors
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International Factors
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Other Factors
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Business
Environment with
reference to global
integration
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Meaning
• Global integration is the degree to which the company is
able to use the same products and methods in other
countries.
• The global business environment is the environment in
different countries with unfamiliar factors from
domestic environment which affect firm's decisions on
resource use and capabilities.
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Types of Integration
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Ecological
Environment
Protection Act
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Meaning
• The Environment Protection Act, 1986 (the "Environment Act") provides
for the protection and improvement of environment. The Environment
Protection Act establishes the framework for studying, planning and
implementing long-term requirements of environmental safety and laying
down a system of speedy and adequate response to situations
threatening the environment. It is an umbrella legislation designed to
provide a framework for the coordination of central and state authorities
established under the Water Act, 1974 and the Air Act. The term
"environment" is understood in a very wide term under s 2(a) of the
Environment Act. It includes water, air and land as well as the
interrelationship which exists between water, air and land, and human
beings, other living creatures, plants, micro-organisms and property.
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Purpose
• The purpose of the Environmental Protection Act (EPA) is to support and promote the management, protection,
enhancement and wise use of the environment, while recognizing the following:
• Preventing, mitigating and remediating environmental impacts is important in making decisions and taking
actions.
• Where there are threats of serious or irreparable harm to the ecological integrity, lack of complete certainty is not
to be a reason for postponing reasonable environmental protection measures.
• All persons are responsible, financially and otherwise, for impacts on the environment as a result of their actions or
inaction.
• Administrative, management and regulatory processes need to be adaptive, responsive, fair, effective and timely.
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Key Components
• The proposed amendments to the EPA will:
• Provide a clear set of principles that are common in environmental protection legislation across Canada that must
be followed when making decisions that are intended to ensure the environment remains protected.
• Include provisions to address waste management.
• Include provisions for the management of contaminated sites.
• Allow for the enforcement of guidelines and standards.
• Acknowledge and recognize Aboriginal and Treaty rights.
• Establish broad authority for environmental protection.
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Important Legislation
• Some of the important legislations for environment protection
are as follows:
• The National Green Tribunal Act, 2010
• The Air (Prevention and Control of Pollution) Act, 1981
• The Water (Prevention and Control of Pollution) Act, 1974
• The Environment Protection Act, 1986
• The Hazardous Waste Management Regulations, etc.
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Dr. Niharika S Bajeja
9898065625
niharika.bajeja@marwadieducation.e
du.in
marwadiuniverisity.ac.in
TREY 43
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Business Environment: Dr. Niharika S Bajeja

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Business Environment: Dr. Niharika S Bajeja

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Business Environment

Dr. Niharika S Bajeja

• When asked “What is Environment?” in fifth grade. I replied, “Everything

• A business can be established, but to successfully sustain a business, the business

Existing structure of the economy in terms of relative role of private

• Identify the External Opportunities &

Economic Social Factors

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