Business environment dmgt e book . revolution in USSR suddenly a political change transform the whole equation of business. In India in. Pearson Education India, - Business - pages. 3 Reviews super books of business environment THE BASIS OF ALL ECONOMIC ACTIVITIES 3. Rees she has recently completed a book on Business Economics. whole – emphasises the continuing need for organisations to monitor.
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Managers need to need to keep abreast of the latest economic developments in countries around the world, and use this information to analyse and correlate. PDF Drive is your search engine for PDF files. As of today we have 78,, eBooks for you to download for free. No annoying ads, no download limits, enjoy . Concept; Meaning; Nature of Business Environment; Business Industrial Law by Mallick, P.L., Publisher: Eastern Book Company, . It may, however, be noted that a firm may not sometimes have complete control over all.
Understanding Economic Systems and Business 3 Understanding the Business Environment What are the sectors of the business environment, and how do changes in them influence business decisions? Businesses do not operate in a vacuum but rather in a dynamic environment that has a direct influence on how they operate and whether they will achieve their objectives. This external business environment is composed of numerous outside organizations and forces that we can group into seven key subenvironments, as Figure illustrates: economic, political and legal, demographic, social, competitive, global, and technological. Each of these sectors creates a unique set of challenges and opportunities for businesses. Business owners and managers have a great deal of control over the internal environment of business, which covers day-to-day decisions. They choose the supplies they purchase, which employees they hire, the products they sell, and where they sell those products.
Assisting in the overall development of locality 4. Taking steps to conserve scares resources and developing alternatives 5. Improving the efficiency of the business operation 6. Contributing to research and development 7. Develop of backward areas 8. Promotion of small scale industries 9. Contribution to the national effort to build up a better society Hossein. This means that the business should be conducted according to certain self-recognized moral standards.
Business, being a social organ, shall not conduct itself in a way detrimental to the interests of society and the business sector itself. A profession is bound by certain ethical principles and rules of conduct which reflect its responsibility, authority and dignity. The professionalization of business management, should therefore, be reflected in the increasing acceptance of business ethics.
Do not deceive or cheat customers by selling substandard or defective products by under measurements or by any other means. Do not resort to hoarding, black marketing or profiteering. Do not destroy or distort competition Hossein. K Page 15 4. Ensure sincerity and accuracy in advertising, labeling and packaging. Do not tarnish the image of competitors by unfair practices. Make accurate business records available to all authorized persons.
Pay taxes and discharge other obligation promptly 8. Do not farm cartel agreements, even informal, to control production, price etc to the common detriment. Refrain from secret kickbacks on payoffs to customers, suppliers, administrators, politicians etc.
Ensure payment of fair wages to and fair treatment of employees. The concept of corporate governance primarily hinges on complete transparency, integrity and accountability of the management.
Corporate governance is concerned with the values, vision and visibility. Did u know? Once GM alleged that Volkswagen stole its trade secret by luring its head of production.
GM won case against Volkswagen and obtained a hefty compensation. Deciding Priorities Various changes take place in the environment and it is difficult, cumbersome and a costly affair to keep a regular eye on every aspect of these changes.
So it is essential for a strategist to rate the environmental factors on the basis of criticality and then invest time and resources in environmental analysis. The Nine-cell Matrix is one method of deciding priorities regarding environmental issues.
The issues that are critical need maximum attention of the management and quick action or preparation. On the other hand issues of low priority need just monitoring at regular intervals. Issues of high priority need attention standby plans in case and also need regular observation.
Environmental Evolution: There are three components that are useful to describe changes in the environmental segments: Identifying High Priority Environmental Sector Changes in the microenvironment may be systematic or discontinuous. Gradual changes, changes in a phased manner, or those that are predictable are systematic changes. As after liberalization, a change in the ratio of youth in population of India, rise in the income of middle class and especially of the youth can be seen as systematic change.
Unpredictable or sudden changes are discontinuous, like the twin tower terror attacks in the US and its aftermath. Sometimes changes in one segment may be the result of driving forces in another segment. The driving force behind the acceptance of packaged food in India could be because of the downloading power of the middle class, or because more women are working, or it could be more awareness among the youth via the mass media. These driving forces constantly interact with each other.
Environmental evolution can be completely predictable and sometimes it is dependent upon actions of the firm or other entities in the environment. Process of Environmental Analysis: The process of environmental analysis can be divided into four parts: Environmental scanning is aimed at alerting the organization to potentially significant external impingement before it has fully formed or crystallised.
Successful environmental scanning draws attention to possible changes and events well before occurrence, giving time for suitable action. Scanning frequently detects environmental change that is already in an advanced stage. Scanning is most ill- structured and ambiguous environmental analysis activity. The data sources are many and varied. Moreover a common feature of scanning is that early signals often show up in unexpected places. Fundamental challenge for the analyst in scanning is to make sense of vague, ambiguous and unconnected data and to infuse meaning into it.
Monitoring involves following the signals or indicators unearthed during environmental scanning. In monitoring the data search is focused and much more systematic than scanning. By focused, it is meant that the analyst is guided by a priori premonition.
Systematic refers to the notion that the analyst has the general sense of the pattern and he is looking for and collects data regarding the evolution of the pattern. As monitoring progresses the data frequently move from the imprecise and unbounded to reasonably specific and focused. The output or monitoring are threefold: Indian Business Environment Notes c Forecasting: Forecasting is concerned with the development of plausible projections of directions, scope, speed and intensity of environment change, to lay out the evolutionary path of anticipatory change.
There are number of key analytic tasks and outputs involved in forecasting. The first concern untangling of forces that drive the evolution of a trend. The second concern understanding the nature of the evolutionary path; that is whether the change is a fad or of some duration, or cyclical or systematic in character.
The third concern more or less clearly delineating the evolutionary path or paths leading to projections and alternatives futures. Forecasting is well focused and is much more deductive and complex activity. Assessment involves identifying and evaluating how and why current and projected environmental change will affect strategic management of an organization. In assessment, the frame of reference moves from understanding the environment — the focus of scanning, monitoring and forecasting — to identifying what that understanding of environment means for the organization.
Assessment thus tells about the implication of environment change on the organization. There is not always a linear relationship between scanning, monitoring, forecasting and assessment.
If some trends are disclosed in scanning process an organization can directly jump to find out how it is going to influence the organization. Even after having the assessment of the external environment factor an organization may continuously monitor and forecast the factor about is future development.
So sometime assessment monitoring and forecasting go simultaneously. A good strategist always keep an eye on development in environment. Like when Vijay Mallaya came to know that there is some internal problem in Chabaria owners of Shaw Wallace family, he started monitoring it and when he found suitable time he downloadd his arch rival that is Shaw Wallace and became second largest brewery of world.
It is a Web site.
It is designed to present programs that foster development of new cost-effective environmental technologies. It is an education-based organization. It concentrates on workplace skills and job competencies. It improves the relationship between the Union and the Company. It focuses on job security and advances productivity through education and training. ETOP, Inc. It relays information on existing EPA environmental technologies for air, water, and waste treatment and control.
Its mission is to provide worker education and training for IBEW represented employers to enhance individual employability and improve employer productivity. To achieve its mission it applies some core values to all of its corporate activities, which are given as under: To carry out this mission, the ETOP organization was established.
In , ETOP revised its by-laws to become a multi-employer organization. Its Quality: ETOP aims to maintain high standards and wants to exert a positive impact on continuing education by holding a strong commitment to quality for the sustenance and advancement of excellence in working atmosphere to make it informative.
Its Services: ETOP has decided to commit itself to render excellent services to its member organizations by maintaining excellent relationships that are responsive and flexible to industry requirements, needs and interests. Its Collaboration: ETOP works simultaneously in tandem with the fellow joint labor management organizations and is committed to the sustenance and advancement of learning at workplace.
Besides, ETOP's sister concerns include other organizations, which are also committed to accrual learning, these include professional organisation and institutes of higher education at local, state, regional, national, and international levels, which collaborate for the advancement of learning at workplace. Its Contribution to Learning: ETOP's incessant endeavour is to enhance its operations by seeking continuous appraisal.
For the purpose it collects information to improve its operation and support teamwork, and provides learning opportunities for its staff and collaborating organizations. It works with its members to promote an environment enhancing acquisition of learning and skills. For the purpose of the enhancement of learning ETOP programs are conducted on-site at enhanced learning centers. The workers don't need to waste their time in traveling to far off locations, which are rather inconvenient.
These learning centers include classroom settings; individual, computer-equipped study carrels; and private areas for career and related counselling. It has established learning centers at its participating employer organization's manufacturing facilities. These centers are generally located adjacent to the production area. Ease of access increases usage of the center. Services provided in the center range from educational advising, career development counseling, and computer skills training to on-site credit courses, test preparation, workplace skills, and preparation for General Education Diplomas GED.
All centers are equipped with modern infrastructure and library facilities etc. Its Local Joint Committees: There is a separate Local Joint Committee established at each location.
It consists of equal Union and Management participation. Their tasks are to promote life-long learning and encourage participation in ETOP programs.
Originally it is designed as a business environmental scan; this analysis is an analysis of the external macro environment in which a business operates. By understanding the environment in which you operate external to your company or department , you can take advantage of the opportunities and minimize the threats. These are factors which are beyond the control or influence of a business, however are important to be aware of when doing product development, business or strategy planning.
It is often used within a strategic SWOT analysis. The PESTLE analysis headings are a framework for reviewing a situation, and can also be used to review a strategy or position, direction of a company, a marketing proposition, or idea. Indian Business Environment Notes Notes PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors, which are used to assess the market for a business or organizational unit strategic plan It is important to clearly identify the subject of a PESTLE analysis that is a clear goal or output requirement , because an analysis of this type is multi faceted in relation to a particular business unit or proposition — if you dilute the focus you will produce an unclear picture — so be clear about the situation and perspective that you use PESTLE to analyze.
In this context we need to imagine that the department HR is an organization in its own right and look outside. Factors to include in your analysis may include the following: Political a What is the culture of the organization?
Economic a What is the budgetary position of the department? Technological a What changes may be coming our way? Legal a What is happening in our sector that will impact what we do? Doing this takes the form of a SLEPT analysis and thus there is a scanning or an investigation of the Social, Legal, Economic, Political, and Technological influences that can be or likely to be on a business.
It is important that you should be aware of the actions of your competitors in business. Social factors relate to the pattern of behaviour, tastes, and lifestyles.
A major component of this is a change in consumer behaviour resulting from changes in fashions and styles. The age structure of the population also alters over time currently we have an ageing population. To give your business a better shape it is better to have a good knowledge of the social factors around you.
Indian Business Environment NotesThe legal factors i. Economic factors are affected with every change in the social ones. There are multiple fluctuations associated with general booms and slumps in economy.
In a boom nearly all businesses benefit and in a slump most lose out. Other economic changes that affect business include changes in the interest rate, wage rates, and the rate of inflation i. Businesses will be more encouraged to expand and take risks when economic conditions are right, e.
Political changes relate to changes in government influence. In recent years these changes have been particularly significant because as members of the European Union we have to adopt directives and regulations created by the EU which then become part of UK law. Political changes are closely tied up with legal changes. Changes in technology have also become particularly significant in the post-millennium world.
This is particularly true in terms of modern communication technologies. The creation of databases and electronic communications have enabled vast quantities of information to be shared and quickly distributed in a modern company enabling vast cost reductions, and often improvements in service.
Organisations need to be aware of the latest relevant technologies for their business and to surf the wave of change. Increased popularity of foreign travel leading to a boom in demand for air travel. However, this has been adversely affected by international terrorism. There are increasingly tight rules about the materials that need to go into aircraft construction in order to make them safer and more resistant to fire hazards.
This has had the impact of raising costs. Lower interest rates have meant that people have more disposable income to spend on luxuries like long distance air travel.
The development of freedom of movement and trade in the European Union has led to greater levels of competition on European routes coupled with increased movement of people.
Modern aircraft are safer and more economic to run than in the past making possible cheap air travel. Ad-hoc scanning: Short term, infrequent examinations usually initiated by a crisis 2. Regular scanning: Studies done on a regular schedule say, once a year 3.
Continuous scanning: This allows the firm to act quickly, take advantage of opportunities before competitors do, and respond to environmental threats before significant damage is done. Macro environmental scanning involves analyzing: Economy a GDP per capita b Economic growth c Unemployment rate d Inflation rate e Consumer and investor confidence f Inventory levels g Currency exchange rates h Merchandise trade balance i Financial and political health of trading partners j Balance of payments k Future trends 2.
Government a Political climate — amount of government activity b Political stability and risk c Government debt d Budget deficit or surplus e Corporate and personal tax rates f Payroll taxes g Import tariffs and quotas h Export restrictions i Restrictions on international financial flows 3. Legal a Minimum wage laws b Environmental protection laws c Worker safety laws d Union laws e Copyright and patent laws Indian Business Environment Notes f Anti-monopoly laws g Sunday closing laws h Municipal licences i Laws that favour business investment 4.
Technology a Efficiency of infrastructure, including: Ecology a Ecological concerns that affect the firms production processes b Ecological concerns that affect customers' downloading habits c Ecological concerns that affect customers' perception of the company or product 6.
Socio-cultural Demographic factors such as: Potential Suppliers Labour Supply a Quantity of labour available b Quality of labour available c Stability of labour supply d Wage expectations e Employee turn-over rate f Strikes and labour relations g Educational facilities Material Suppliers a Quality, quantity, price, and stability of material inputs b Delivery delays c Proximity of bulky or heavy material inputs d Level of competition among suppliers Service Providers a Quantity, quality, price, and stability of service facilitators b Special requirements Stakeholders a Lobbyists b Shareholders c Employees d Partners While scanning these macro environmental variables for threats and opportunities requires that each issue be rated on two dimensions.
It must be rated on its potential impact on the company, and rated on its likeliness of occurrence. Multiplying the potential impact parameter by the likeliness of occurrence parameter gives us a good indication of its importance to the organisation. Task What could be the five forces as per Porter's model for the automobile manufacturer, Hyundai?
Strengths 1. India has huge pool of labour force 2. There are high percentage of cultivable land Indian Business Environment Notes3. Diversified nature of the economy 4. It has huge English speaking population, availability of skilled manpower 5. Stable economy, does not get affected by external changes 6. Extensive higher education system, third largest reservoir of engineers 7. High growth rate of economy 8. Abundance of natural resources Weaknesses 1. Around a quarter of a population below the poverty line 3.
High unemployment rate 4.
Stark inequality in prevailing socio economic conditions 5. Poor infrastructural facilities 6. Low productivity 7. Huge population leading to scarcity of resources 8. Low level of mechanization 9.
Red tapism, bureaucracy Low literacy rates Unequal distribution of wealth Rural-urban divide, leading to inequality in living standards Opportunities 1.
Scope for entry of private firms in various sectors for business 2. Inflow of Foreign Direct Investment is likely to increase in many sectors 3. Area of biotechnology 6. Area of Infrastructure 8. Huge domestic market: Opportunity for MNCs for sales 9. Huge natural gas deposits found in India, natural gas as a fuel has tremendous opportunities Vast forest area and diverse wildlife Huge agricultural resources, fishing, plantation crops, livestock High fiscal deficit 3.
Threat of government intervention in some states 4. Volatility in crude oil prices across the world 5.
Growing import bill 6. Population explosion, rate of growth of population still high 7. Agriculture excessively dependent on monsoons 1.
Even before independence, the colonial government had established a planning board that lasted from to Private industrialists and economists published three development plans in Thus, even before independence, planning was not totally new to the economy.
Notes A 'Bombay Plan' was formulated by J. Tata and some others as a blueprint for rapid industrialisation. Jawaharlal Nehru visualised planning as a means of "avoiding the unnecessary rigours of an industrial transition in so far as it affected the masses resident in India's villages" as well as a "positive instrument for resolving conflict in a large and heterogeneous subcontinent".
It was Nehru who persuaded P. Mahalanobis to evolve the basic strategy for the Second Five-Year Plan, while Nehru himself was involved in drafting the introduction to its third edition. India's leaders adopted the principle of formal economic planning soon after independence as an effective way to intervene in the economy to foster growth and social justice.
The Planning Commission was established in Responsible only to the Prime Minister, the commission is independent of the cabinet. The Prime Minister is the chairperson of the commission, and the Minister of State with independent charge for planning and program implementation serves as its Deputy Chairperson.
A staff drafts national plans under the guidance of the commission; draft plans are presented for approval to the National Development Council, which consists of the Planning Commission and the Chief Ministers of the States.
The council can make changes to the draft plan. After the council's approval, the draft is presented to the cabinet and subsequently to Parliament, whose approval makes the plan an operating document for Central and State Governments.
Agriculture, including projects that combined irrigation and power generation, received priority. Second Five-Year Plan FY emphasised industrialisation, particularly of basic, heavy industries in the public sector, and improvement of the economic infrastructure.
The plan also stressed social goals, such as more equal distribution of income and extension of the benefits of economic development to the large number of disadvantaged people.
Third Five-Year Plan FY aimed at a substantial rise in national and per capita income while expanding the industrial base and rectifying the neglect of agriculture in the previous plan.
Economic difficulties disrupted the planning process in the mids. In the s, India faced two wars — one with China in and then with Pakistan in This come as a huge set back to the economy as defence expenditure increased sharply and there was negative impact on industrial and agriculture growth.
During the war, foreign aid was also reduced. All this resulted in a hike in prices. Three annual plans guided development between FY and FY while plan policies and strategies were re-evaluated. Although the plan projected national income growth at 5. Fifth Five-Year Plan FY was drafted in late when crude oil prices were rising rapidly; and rising prices quickly forced a series of revisions. The plan was subsequently approved in late but was terminated at the end of FY because the new government had different priorities and programs.
The fifth plan was in effect only one year, although it provided some guidance to investments throughout the five-year period. The economy operated under annual plans in FY and FY Sixth Five-Year Plan FY was intended to be flexible and was based on the principle of annual "rolling" plans.
It called for development expenditures of nearly 1. The plan called for a 5. Seventh Five-Year Plan FY envisioned a greater emphasis on the allocation of resources to energy and social spending at the expense of industry and agriculture. Total spending was targeted at nearly 3. Eighth Five-Year Plan was launched in April and emphasised market-based policy reform rather than quantitative targets. Total spending was planned at 8. The Ninth Five-Year Plan, adopted by the National Development Council, had given priority to agriculture and rural development with a view to generating adequate productive employment and eradication of poverty; accelerating the growth rate of the economy These very priorities constitute the objectives of the Ninth Plan.
Tenth Five Year Plan was only the first phase of the ten-year road map. For the period of economic growth is not the only objective of national planning. Over the years, development objectives are being defined not just in terms of increases in GDP or per capita income but more broadly, in terms of enhancement of human well being.
Eleventh Five Year Plan India's centralized planning process is governed by seven cardinal policy objectives: These would continue to be the guiding principles for the Eleventh Plan which commences from 1st April, A very large part of our planning is concerned with fiscal aspects and physical targets.
It must, however, be recognized that it is the human and natural resources, scientific methods and technologies which are the fundamental elements in the creation of wealth for higher productivity, increased efficiency and completely new ways of doing things.
The Eleventh Plan, therefore, would place emphasis on these components which have received inadequate attention in the past. Eleventh Plan would be the vehicle that would position the country to be a super power- economically, strategically and scientifically. For the Eleventh Five Year Plan the Government of India is envisaging the economy to grow at an annual growth rate of 8.
This implies that Agricultural Sector will have to grow at a rate of 3. The above growth rates interwoven with each other, of course, would depend upon many factors.
Some of these factors are internal to the Indian economy and some are influenced by the external environment. Industrial sector has gained a lot over the past decade or so due to liberalization and is gradually integrating with the world economy. Some of the sub-sectors like automobiles, pharmaceuticals, biotechnology products, speciality chemicals, textiles have acquired unprecedented level of global competitiveness and need to be supported to maintain the present edge.
The Eleventh Plan is also placing special emphasis on infrastructure and skill development, the two crucial and critical catalysts for growth.
In the Eleventh Plan, the government is placing special focus on this sector so that its potential to create employment as growth parameter is fully realised. Indian Business Environment NotesAlong with high growth rate aiming for improving livelihood support and increasing employment, the Eleventh Plan strategy calls for new emphasis on education, health and other socially relevant issues. Eleventh Plan is being formulated at a crucial juncture.
In a unipolar and truly globalized world where trade barriers are getting dismantled, an organization has to perform and deliver in real time.
Achievements 1st Plan 1. The first five year plan was presented by Jawaharlal Nehru in The First Five Year Plan was initiated at the end of the turmoil of partition of the country. It gave importance to agriculture, irrigation and power projects to decrease the countries reliance on food grain imports, resolve the food crisis and ease the raw material problem especially in jute and cotton.
The focus was to maximize the output from agriculture, which would then provide the impetus for industrial growth. Guide to Enterprise Risk Management. This publication is attempt to address some of the most commonly asked questions with respect to ERM. Higher Education and Business Standards. International Trade Theory and Evidence. A comprehensive, balanced text, International Trade: Theory and Evidence is the perfect book for International Trade courses at the undergraduate level.
About Us Link to us Contact Us. Free Business Books. Business Environment Study Material. Business Environment Study Material The purpose of the book is to set a base in the post graduate students, on the subject Business Environment, by describing its various aspects such as internal and external environmental factors, structure and profile of the economy of India, concept of foreign investment and major multinational economic associations.
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