Business Environment Notes

Employee satisfaction & development Power

Joy of Creation

Challenging Good corporate citizenship

Growth

Market leadership

Profit

Objectives/Goals of business

Services to society

Profits:

Not all enterprises are interested in making profits. For Ex: hospitals, schools, charitable institutions & government agencies. Acting as a seed money for more products More production facilities More dividends More tax payments More opportunities Profits should promote the well-being of all the rich & the poor, privileged & less privileged; consumers & producers etc. promoting only products with high margins(to earn profits), ignoring research, & failing to provide working conditions satisfactory to employees, may in the ultimate, bring about the demise of the enterprise. GEORGE R. TERRY

Growth: growth is another primary objective; business should grow in all the directions over a period of
time. An enterprise which remains stagnant for long is presumed to suffer form an organic defect. The strategies adopted to achieve growth are: Add more products/markets Diversify into new areas Integration -forward & backward. Increase Market share Expand markets Cut down costs & increase productivity

From the desk of: Mr. Anantha Nag. M.S, Lecturer/Asst Prof. - SGT College Bellary

Business Environment Notes Power: Business houses have vast resources in the form of money, material, men & technology at it command. These resources conferred enormous economic & political power on managers & owners of business firms. Employee Satisfaction & development: Caring for employee satisfaction & providing for their development has been one of the objective of enlightened business enterprises. If you want to plan for a year, plant a corn, If you want to plan for a 30 years, plant a tree, But if you want to plan for 100 years, plant men. Quality Products & services: Providing quality products & services is yet another objective of business. Giving important quality, product earns brand loyalty & wins good-will For Ex: HUL is flourishing in market mainly of its quality, Toyota is one such company which believes in quality a lot.

Market Leadership: To earn market leadership is yet another objective of business. To earn a
good position for one-self in the market innovation is the key factor. Innovation may be in product, advertising, distribution, finance or in other field

Challenging: Business offers vast scope & possesses formable challenges. Success in a business
ventures smacks of the abilities of individuals who won & failure betrays in their ability in their competency.

Joy of creation: Service to society: Business is a part of society & has several obligations towards if. Some of them
are: Providing safe & quality goods to reasonable prices Providing employment Patronizing cultural & religious activates Maintaining & protecting ecology & Supporting less privileged sections of people in the society like SC, ST, PH, Women, Children. Good Corporate Citizenship: It implies that the business unit follows with the rules of the land, taxes to the government regularly discharges its obligations to society & cares for its employees & customers.

From the desk of: Mr. Anantha Nag. M.S, Lecturer/Asst Prof. - SGT College Bellary

Business Environment Notes

Environment: Environment refers to the sum total of all factors economic, social, political &
cultural which are external to & beyond the control of the individual enterprises & their management.

Business Environment: business environment refers to those aspects of the surroundings of the
business that affects its operations & determines its effectiveness. The business environment is the resultant of interacting & constantly, changing social & economic forces & thus remains in the state of flux

Features of Business Environment:

Business environment is unlimited, extends beyond the national frontier Business environment is beyond the control of management Business environment is complex as it is highly interrelated & interdependent Business environment is highly volatile & turbulent in which lots of sudden changes, which may quite dangerous.

Business Environment

External Enironment

Internal Environment

Micro Environment

Macro Environment

Economic Environment

NonEconomic Environment

Internal Environment: The internal environment consists of value system, goals & objectives,
Management structure, physical assets, technological & human capabilities (Human Resources), financial & marketing resources.

From the desk of: Mr. Anantha Nag. M.S, Lecturer/Asst Prof. - SGT College Bellary

Business Environment Notes

External Environment: external environment of business consists of institution, organizations &

forces operating outside the company External environment is broadly categorized in to 2 categories Micro Environment Macro Environment

Micro Environment: this refers to such players whose decision & actions have a direct bearing on
the companys business like production & selling of goods. Micro environment has great relevance with the companys business. The decision & actions of the individual company often differ in accordance with size, capability & strategies of each company. The factors, which contribute to micro environment, are as below Input suppliers Workers & Unions Customers Marketing Intermediaries Competitors Public

Macro Environment: This comprises large societal & physical forces which affects the company &
also the players in the companys microenvironment. Macroeconomic scenario refers to price situation, levels of saving & investment, fiscal, monetary & balance of payment situation & overall growth activity. Macro environment of the business can be broadly divided in to economic & non-economic environment.

From the desk of: Mr. Anantha Nag. M.S, Lecturer/Asst Prof. - SGT College Bellary