Welcome to the Practical world And real business environment.

Submitted & design by Harsh jain

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A Morninggg Prayer by a businessman

Hey bhagwan ! Please give me strength to pay income tax

, Vat, Cst, customs, Service tax, Excise duty, Tds, Pf, professional tax, Road Tax, Stamp duty, Water tax, Education Cess and Many More! Besides that also give me additional strength to pay Hafta, Chai panni , Donatioin, chanda and then if I have some thing left then I can feed my family and then help the society and mankind . Also give me strength to fight my competitors, be good to my employees and my suppliers & customers.
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It is not the strongest of the species that survive , nor the most intelligent ., but the one most RESPONSIVE TO CHANGE. Charles Darwin

Business
It means all those

Enviornment
The surrounding which

economic activities which are carried for the purpose of earning profits (purchase, sale, manufacture, services etc ).

affects the activities and operations of business.

Basically business environment refers to all internal and external factors which have a bearing on the functioning of business
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Objectives of Business
It is the society Organ of economic expansion, growth & change as an individual goes through a need cycle, on similar lines a business also moves on a cycle of evolution.

Business
Survival Stability Growth Efficiency Profitability

Individual

Basic needs

Safety needs

Social needs

Self estreem needs Self actualisation needs

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Pnemonics: S-PEGS

Relationship between Business & Environment

Mutual dependence
Creation of Utility Regular contact

Provides means of production and information

Responsible to all the factors Flexibility Dynamic nature Capable to influence the society ETC.

Importance Of Business Environment

Provide knowledge about internal enviornment
Knowledge about problems & complexities To study the economic policies of the government Optimum use of the resources Study of market
Cont!!!!!!!!!!!
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Importance Of Business Environment

Long term business strategy
Development of science & technology Taking advantages of opportunities To understand international events and their impacts Helps in forecasting
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Factors affecting the business environments

Components of Business Environment

Internal Environment
There are no of Factors which influence the decision making. They are: Objectives The strategy & future planning are
driven by its objectives.

Management-The quality of the board is a very critical

factor for the Development & performance.

Human resource- It contribute to the strength &

weakness of an organization.

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Internal Environment
Other Factors: o Financial factor o Marketing capabilities o R&D o Physical assets & Facilities

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External Environment
Micro
External

Enviornment

Macro
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Micro Enviornment
It is related to small area or immediate periphery of an organization. Micro environment Influences an organization regularly and directly. It is also known as Operating environment because It has direct bearing on the operation of the firm.

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Micro Enviornment
These may includes the following elements :

{C}- Customer {O}- Organization {S}- supplier {M}- Market {I}- Industry {C}- competitors
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Macro Enviornment
Social 500 400 300 200 100 0

Technological

Legal Macro Micro

Political

Economical

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Macro Environment
These consist the general environment , which affects the working of all the firms. It includes:

{S} Social

{L} Legal
{E} Economical

{P} Political
{T} - Technological
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Environmental Influences
Opportunities : It is the favorable
condition in the organization environment , which enables it to consolidate and strengthen its position. Ex: Possibility to get into new area of business

Threat: It is an unfavorable condition in the

organization environment, which create a risk for ,cause a damage to the organization. Ex: Private players get together & take away these opportunities {Bsnl 3G}
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Environmental Influences
Strength : It is an inherent capacity, which an
organization can use to gain strategic advantages over its competitors. Ex: Great network

Weakness: It is an inherent limitation which

create a strategic disadvantage over its competitors. Ex: Inefficient employees , casual attitude towards the work.
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Hence The opportunities , threat relates to MACRO ENVIORNMENT & Strength , Weakness Relates to MICRO ENVIORNMENT.

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It helps strategists buy time to anticipate opportunities and to plan to take optional response to these opportunities .strategy develops an EARLY WARNING SYSTEM to prevent threat or to develop strategies which can turn a threat to firms advantage. But it does not mean that Future can be controlled But not also Totally negative. In Change there is both Opportunities & challenge. Clifton Garvin
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