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Unit - 1business As A Social System
Unit - 1business As A Social System
the
wholesociety
is
business
environment.D a v i s
and
significant
i n addition
to
the
systems
idea.The
three
ideas
are:1 . V a l u e s 2 . V i a b i l i t y 3 . P u b l i c v i s i b i l i t y
1. VALUES:
Business like other social institutions, develops certain belief systems
andv a l u e s f o r w h i c h t h e y s t a n d , a n d t h e r e b e l i e f s a n d
v a l u e s a r e a s o u r c e o f institutional drive. These values drive from a
multitude source, such as the missionof business as a social institution, the
nation in which business is located, the typeof industry in which it is active and
the nature of employees. These values becomeguides for employees decisions
in the interface of business. Second, they becomestrong motivators for people in
a business.
2. VIABILITY
Davis and Blomstorms define viability as the drive to line and grow,
toaccomplish the potential not yet reached, and to achieve all that a living
system isc a p a b l e o f b e c o m i n g . I f a b u s i n e s s i s t o b e a v i a b l e ,
v i g o r o u s , i n s t i t u t i o n i n s o c i e t y, i t m u s t i n i t i a t e i t s s h a r e o f
f o r c e s i n i t s o w n e n v i r o n m e n t r a t h e r t h a n merely adjust to outside
forces. Every business needs a drive and spirit all its ownto make it as a positive
actor on the social stage rather than reactor or a reflector.
3. PUBLIC VISIBILITY
ENVIRONEMTN]I . I N T E R N A L
ENVIRONMENT FACTORS
1.Value system
: Th e v a l u e s y s t e m s o f t h e f o u n d e r s a n d t h o s e a t t h e h e l m
o f a ffa i r s h a v e i m p o r t a n t b e a r i n g o n t h e c h o i c e o f b u s i n e s s , t h e
m i s s i o n a n d objectives of the organization, business policies and
practices. It is a widelyacknowledged fact that the extent to which the value
system is shared by all inorganization is an important factor contributing to
success.
development,
business
philosophy
business
policy
etc
6 . C O M PAN Y I M A G E AN D B R A N D E Q U I T Y
7.OTHER FACTORS
A)Research and development determine a companys ability to
innovate andcompete.B)Marketing quality of marketing men, brand
equity, distribution network have direct effect on marketing.
C)
FINANCE 0 financial policies; financial position and capital structure arealso
affecting business performances.D)Physical Assets production capacity,
technology, distribution logistics
EXTERNAL ENVIRONMENT FACTORS
It consists of 2 types.1 . M i c r o e n v i r o n m e n t 2 . M a c r o e n v i r o n m e n t
I. Micro Environment
The
micro
environment
is
also
known
as
the
task
who
components
supply
the
inputs
like
to
raw
materials
and
the
company.
The
importance
of
reliable
source
of
2. CUSTOMERS
A b u s i n e s s e x i s t o n l y b e c a me a n d i t s c u s t o m e r s . A c o m p a n y
m a y h a v e different categories of customers like individuals, households,
industries and other commercial establishment and govt. and other institution.
3. COMPETITORS
A firms competitors include not only other firms which market the
same p r o d u c t s
but
also
all
those
who
c o mp e t e
for
the
d i s c r e t i o n a r y i n c o m e o f t h e consumers.
4. MARKETING INTERMEDIARIES
T h e i m me d i a t e e n v i r o n me n t o f t h e c o m p a ny m a y c o n s i s t o f
n u m b e r o f marketing intermediaries which are firms that aid the
company in promoting,selling and distributing its goods to final buyers.T h e
m a r k e t i n g i n t e r m e d i a r i e s i n c l u d e s mi d d l e m e n s u c h a s a g e n t s
a n d merchants who help the company find customers or close sales with
them.
5. FINANCIERS
A n o t h e r i mp o r t a n t m i c r o e n v i r o n me n t a l f a c t o r i s t h e f i n a n c i e r
o f t h e company. Besides the financing capabilities, their policies and strategies,
attitudes,ability to provide non financial assistance etc are very important.
6. PUBLICS
A public is any group that has an actual or potential interest in an impacton an
organizations ability to achieve its interests. Media publics, citizen
action publics and local publics are some examples.
MACRO ENVIRONMENT
It is also called as general environment and remote environment. The
macroenvironment is generally uncontrollable than micro environment,
the
success
of the
company
depends
on
its
adaptability
to
the
4. Suppliers offering
Many times technological changes are encouraged by the suppliers of
acompany, like a capital goods supplier etc.
5. Competitive dynamics
C o m p e t i t i o n c o mp e l s t h e a d o p t i o n o f t h e b e s t t e c h n o l o g y a n d
c o n s t a n t endeavor to innovate.
6. Substitutes
Emergence
of
new
substitutes
or
technological
improvements
or
T h e g o v t . c o n t r i b ut e s t o t h e d e v e l o p m e n t t o t h e t e c h n o l o g y by
i t s o w n direct involvement by establishing research organization and funding
R & D. Thegovt. may encourage private R & D by various incentives.
2 . G e n d e r
size
3.Income
5.Occupation
class
10.Nationality D e m o g r a p h i c
distribution
6.Education
8.Religion
factors
such
9 . R a c e
as
size
of
structure
and
nature
of
the
liberationof the impart policy may create difficulties for such industries. This
mean the firmshould come up with quality, cost, and marketing and after sales
service etc.
c) Foreign exchange policy
Exchange rate policy and policy in respect of cross border movement
of capita are important for business.
d) Foreign investment and technology policy
Foreign investment and technology policy will increase
domesticcompetition at the same time it would benefit
m a n y d o m e s t i c f i r m s b y permitting global sourcing of capital
and technology, by increasing the quantity and quality of domestic supply
of many goods and services.
e) Fiscal policy
G o v t . s t r a t e g y i n r e s p e c t o f p u b l i c e x p e n d i t ur e a n d r e v e n u e c a n
h a v e significant impact on business. The pattern of public expenditure
may affect thedevelop of industries. Such as govt. often use tax
incentives
or
disincentives
toencourage
or
discourage
certain
significantly
influence
savings,
investments
and
Ecological
factors:
It
assumes
great
importance,
the