An Exploratory Research Study on

Nepalese General Business Environment

Submitted to
University Grants Commission
Baneshwor, Kathmandu

By
Dr. Thaneswor Gautam, Lecturer
Nepal Commerce campus
Baneshwor, Kathmandu

21 September 2005
 ABSTRACT

Present study aimed to design a scientific instrument to assess Nepalese general

business environment and to apply the instrument to measure the Nepalese business

environment. It followed a developmental research design to achieve the objectives.

Gap between theory of general business environment and the state of Nepalese

business environment has motivated researcher to conduct a fundamental research

in this area. Research issues were derived into research questions and appropriate

methodology was followed to achieve the objectives.

Four very small focus-group interview and primary survey helped to understand the

research problems. More specifically, this preliminary study helped to identify how

Nepalese respondents understand general business environment. Similarly it further

helped to operationalize the components of business environment, which ultimately

contributed in the design of scientific questionnaire.

Survey on a very large sample (n=965) with diverse professional groups and

experience appeared as one of the powerful strength of the present study. Nature of

data showed different age and gender groups of respondents. Most of the findings

were not found significantly different among these demographic groups thus the

sample is representative and findings can be generalized to the total population.

Present research has identified clear five factors PEST (Political-legal, Economic,

Socio-cultural, and Technological) along with international business environment in

exploratory Principal Component Factor analysis. These factors explained 65%

variance in six-factor model and 58.5% total variance in five-factor model. Items of

each component were found significantly loaded into the related factor with very low

cross loadings.

II
Same model was investigated in Maximum Likelihood confirmatory factor analysis

that proved satisfactory model fit with Confirmatory Factor Index (CFI) nearly 0.90

and RMSEA (Error) less than 0.10. Moderate factor loadings were observed in the

model. Confirmatory factor analysis proved higher order factor of policy and

procedure factors into political-legal factor that seems meaningful.

A descriptive analysis was made to find out the actual status of Nepalese business

environment. Detail investigation showed that Nepalese general business

environment was not found very encouraging. Global business environment was

found slightly favourable, socio-cultural business environment neutral, economic and

technological environment slightly unfavourable, and political environment relatively

unfavourable based on survey findings.

In conclusion, present research was found a very successful piece of research work

in Nepalese context. It not only pursued a scientific research design but also applied

very reliable tools to analyse the large data set. General findings were found

meaningful and clear that might have high implication to policy makers, researchers,

and practitioners. Nevertheless, few limitations are also there. It is a cross-sectional

design and more descriptive in nature. It couldn't administer the list of many items so

that only relevant items could be included into the questionnaire. Sample is relatively

small for generalization of the findings. Similarly, data generated from convenient

sampling technique is another limitation of this research.

III
 DECLARATION

I hereby declare that the present study entitled An Exploratory Research

Study on Nepalese General Business Environment is based on my original

research work. The results presented in the study have not been submitted

elsewhere for any purpose.

----------------------------------

Thaneswor Gautam, Ph.D.

Assistant Professor, Tribhuvan University

Nepal Commerce Campus Baneshwor

21 September 2005

IV
 ACKNOWLEDGEMENTS

I owe great deal to the management of University Grants Commission for

funding support to conduct such a fundamental research work in area of

Nepalese business environment. I am very much obliged to all the executives,

professionals, and government officers who provided their time for interview

and questionnaire survey. I am very much grateful to my beloved students

who worked sincerely for interview and survey projects. I really appreciate to

the BBA first batch students of Shanker Dev Campus who not only paid time

but also played very important role during the research. I am also obliged to

my obedient Nepal Commerce Campus MBS students of '2061/62' batch for

their active participation in questionnaire survey.

I have got very important support from the members of Dynamic Society Nepal

Baneshwor in questionnaire design and data management. Nepal Commerce

Campus management, online unit, and other administrative staffs also helped

me during the research. My wife Sharada Gautam has also always supported

me during study period. Lastly, I am also thankful for two months time

extension by University Grants Commission to bring this research project into

the present shape.

THANESWOR GAUTAM

Baneswor, Kathmandu

Phone: 009771-4782505, Email: thaneswor@wlink.com.np

21 September 2005

V
 TABLE OF CONTENTS
Page No.
Abstract ----------------------------------------------------------------------------- II-III
Declaration ---------------------------------------------------------------------------- IV
Acknowledgement --------------------------------------------------------------------V
Table of Contents --------------------------------------------------------------- VI-VII
List of Tables & Figures ---------------------------------------------------------- VIII
List of Appendices -------------------------------------------------------------------IX
Abbreviations -------------------------------------------------------------------------X
1. CHAPTER-ONE: INTRODUCTION-----------------------------------------------------1-11
1.1. Concept of business environment------------------------------------------- 1
1.2. Nepalese socio-cultural business environment ------------------------- 2
1.3. Nepalese economic business environment ------------------------------ 3
1.4. Globalization of Nepalese economy ---------------------------------------- 5
1.5. World Trade Organization (WTO) in Nepalese context ---------------- 6
1.6. Task environment --------------------------------------------------------------- 7
1.7. Statement of the problem ----------------------------------------------------- 7
1.8. Objective of the study ---------------------------------------------------------- 9
1.9. Methodology of the study ----------------------------------------------------- 9
1.9.1. Research design---------------------------------------------------------- 9
1.9.2. Sample of the study---------------------------------------------------- 10
1.9.3. Methods ------------------------------------------------------------------ 10
10. Limitations ----------------------------------------------------------------------- 10
11. Format of the study ------------------------------------------------------------ 11
2. CHAPTER-TWO: REVIEW OF LITERATURE------------------------------------- 12-17
2.1. Background--------------------------------------------------------------------- 12
2.2. Business environment ------------------------------------------------------- 12
2.3. Environmental analysis ------------------------------------------------------ 13
2.4. Study of general business environment in other countries ---------- 13
2.5. Nepalese organizational culture ------------------------------------------- 15
2.6. Task and internal environment of Nepalese organizations --------- 17
3. CHAPTER-THREE: RESEARCH METHODOLOGY ----------------------------- 18-22
3.1. Background--------------------------------------------------------------------- 18
3.2. Research design -------------------------------------------------------------- 18
3.3. Population and sample ------------------------------------------------------ 18
3.4. Nature of survey sample ---------------------------------------------------- 19
3.5. Instruments --------------------------------------------------------------------- 22
3.6. Tools and techniques -------------------------------------------------------- 22

VI
4. CHAPTER-FOUR: CONTENT ANALYSIS AND PRELEMINARY STUDIES - 23-30
4.1. Background--------------------------------------------------------------------- 23
4.2. Project-A ------------------------------------------------------------------------ 23
4.3. Project-B ------------------------------------------------------------------------ 25
4.4. Project-C ------------------------------------------------------------------------ 27
4.5. Project-D ------------------------------------------------------------------------ 29
5. CHAPTER-FIVE: INSTRUMENT DESIGN FOR GENERAL BUSINESS
ENVIRONMENT ANALYSIS ---------------------------------------------------------- 31-30
5.1. Background--------------------------------------------------------------------- 31
5.2. Concept operationalization and items design -------------------------- 32
5.3. Questionnaire design -------------------------------------------------------- 33
5.4. Method -------------------------------------------------------------------------- 33
5.5. Analysis ------------------------------------------------------------------------- 34
5.6. Results--------------------------------------------------------------------------- 36
5.6.1. Principal component factor analysis ------------------------------- 36
5.6.2. Maximum Likelihood confirmatory factor analysis ------------- 40
5.6.3. Reliability analysis------------------------------------------------------ 41
6. CHAPTER-SIX: DESCRIPTIVE STUDY OF ENVIRONMENTAL ANALYSIS --46-66
6.1. Background--------------------------------------------------------------------- 45
6.2. Global business environment ---------------------------------------------- 45
6.3. Nepalese economic business environment ----------------------------- 48
6.4. Nepalese socio cultural business environment------------------------- 51
6.5. Nepalese technological business environment------------------------- 53
6.6. Nepalese political business environment -------------------------------- 55
6.7. Generalization of the findings ---------------------------------------------- 57
6.8. Comparative status of Nepalese general business environment
components --------------------------------------------------------------------- 63
6.9. Opportunities & threats in Nepalese general business environment -- 65
7. CHAPTER-SEVEN: FINDINGS, CONCLUSIONS, AND IMPLICATIONS -- 67-70
7.1. Background--------------------------------------------------------------------- 67
7.2. Major findings ------------------------------------------------------------------ 67
7.3. Conclusion ---------------------------------------------------------------------- 68
7.4. Implication ---------------------------------------------------------------------- 69

REFERENCES ------------------------------------------------------------------ 71-72

APPENDICES ------------------------------------------------------------------- 73-76

VII
 LIST OF TABLES
Page No.
Table 3.1: Gender frequency of survey sample ------------------------------------ 19
Table 3.2: Age group frequency of survey sample -------------------------------- 20
Table 3.3: Professional groups frequency of survey sample -------------------- 21
Table 3.4: Professional experience frequency of survey sample -------------- 21
Table 4.1: Contents of general business environment factors based on
interview results ------------------------------------------------------------ 24
Table 4.2: Contents used for general and industry level business
environment factors ------------------------------------------------------- 26
Table 4.3: Results of preliminary survey on general and industry level
environment using checklist --------------------------------------------- 28
Table 4.4: Contents used for general and industry level business
environment factors ------------------------------------------------------- 30
Table-5.1: Rotation Sums of Squared Loadings ----------------------------------- 36
Table 5.2: Rotated PC Factor Matrix of Nepalese Business Environment --- 37
Table 5.3: Extracted & Rotated PC Factor Matrix of Nepalese business
environment ------------------------------------------------------------------- 39
Table 6.1:General descriptive of Nepalese global business environment items 46
Table 6.2: Frequency distribution of impact of Liberalization-------------------- 47
Table 6.3: Frequency distribution of opportunity of WTO membership ------- 48
Table 6.4: General descriptive of Nepalese economic business
environment items ----------------------------------------------------------- 49
Table 6.5: Frequency of Nepalese economic business environment items-- 50
Table 6.6: General descriptive of Nepalese socio-cultural business
environment items ----------------------------------------------------------- 51
Table 6.7: Frequency of Nepalese socio-cultural business environment items 52
Table 6.8: General descriptive of Nepalese technological business
environment items ----------------------------------------------------------- 53
Table 6.9: Frequency of Nepalese technological business environment items - 54
Table 6.10: General descriptive of Nepalese political legal business
environment items --------------------------------------------------------- 55
Table 6.11:Frequency of Nepalese political legal business environment items-56
Table 6.12: One way ANOVA between gender groups--------------------------- 57
Table 6.13: One way ANOVA among age groups --------------------------------- 58
Table 6.14: One way ANOVA among four professional groups ---------------- 59
Table 6.15: One way ANOVA among professional experience groups------- 61
Table 6.16: General Descriptive of five-business environment components-64
Table 6.17: General Descriptive of five business environment components 65
VIII
 LIST OF FIGURES

Page No.

Figure 1.1: Business System and its External Environment----------------------- 1

Figure 5.1: Result of Confirmatory Factor Analysis using EQS 5.7b ---------- 40

Figure 6.1: Environmental Opportunities and threats to Nepalese

business sector -------------------------------------------------------------- 66

IX
 LIST OF APPENDICES

Page No.

Annex-1: Questionnaire Used for Interview (Nepali Version)------------- 73

Annex-2: Questionnaire Used for Interview (English Version) ----------- 74

Annex-3: Questionnaire Used for Survey (Nepali Version) --------------- 75

Annex-4: Questionnaire Used for Survey (English Version) -------------- 76

X
 LIST OF ABBREVIATIONS

CBS Central Bureau of Statistics

SAFTA South Asian Free Trade Area

WTO World Trade Organization

FNCCI Federation of Nepalese Chamber of Commerce and Industry

PEST Political, Economic, Socio-cultural, and Technological

MOF Minister of Finance

BBA Bachelor in Business Administration

PC Principal Component

ML Maximum Likelihood

CFI Confirmatory Factor Index

RMSEA Root Mean-Square Error of Approximation

ETOP Environmental Threats and Opportunities Profile

OT Opportunity and Threats

MBS Master in Business Studies

BBA Bachelor in Business Administration

XI
 CHAPTER-1: INTRODUCTION

1.1. Concept of business environment

Environment refers to all internal and external factors that influence the

functioning of a business. A business runs in an open system as many other

open systems. A business uses various resources as inputs from and supplies

outputs to the environment. Business environment is set of all affecting factors to

the business. Thus, it creates threats to a business and at the same time brings

new opportunities as well. Businessmen should be able of avoiding the threats

and exploiting the every opportunity (Jaunch & Glueck, 1989). Following figure

shows the relation of a business to the external and external environmental

factors.

Figure 1.1: Business System and its External Environment

Political /Legal
Environment

Unions
Customer

Input Conversion Output

Strategy
Capital Goods
Raw Structure Services
Technological materials Profit
Socio- Cultural
System
Environment Technology Employment Environment
Labor Tax
Land Revenues
Business

FEEDBACK
Competitor
Supplier

Economic
Environment
1
 The above figure highlights some of the major external environmental factors

like- political/ legal, economical, socio-cultural, and technological environments.

It also presents the functioning of a business in a system i.e., input, conversion,

and output process. A business firm receives its inputs - capital, raw materials,

technology, labor, and land from external environments and performs some

conversion processes to design outputs such as goods, services, profit,

employment, and tax revenue. General business environment affects all the

business community therefore major general business environment

components are discussed in the following section.

1.2. Nepalese socio-cultural business environment

Nepal is a landlocked country with a total population of 23.2 million. It is

classified as one of the least developed country on account of low annual per

capita of around $ 220 per annum (CBS, 2002). Nepal is the 12th poorest

country in the world and the poorest in South Asia. In the last two decades,

average economic growth was found in 2.2 percent. About 42 percent of the

Nepalese population was living under the poverty line (World Bank, 2002). The

population living under the poverty line comprised 49% male and 39% female

out of 9.9 million economically active population over 10 years age group

(CBS, 2002).

Out of more than 60 ethnic groups, Chettri comprised 3.6 million, Brahman 2.9

million, Magar 1.6 million, Tharu 1.5 million, Tamang 1.3 million, Newar 1.2

million, and rest below 1 million. Nepal is the only Hindu Nation in the world

with 87% Hindu, 8% Buddhist, 4% Muslim, and 1% others. Literacy rate of

total Nepalese population was observed 53.74% following by 68% in male

group and 42.5% in female group (CBS, 2002).

2
1.3. Nepalese economic business environment

Nepal has relied on the mixed economic system that consists of around four

dozens of state owned corporations and thousands of private sector

enterprises. Both the public and private sectors are equally active in economic

activities. Since the 1980s, however, more reliance has been placed on the

private sector that has got further importance after the restoration of

democracy in 1990.

Biratnagar Jute Mill was set up in 1936 as a first organized company in

industrial sector. Few manufacturing such companies as Morang Cotton Mills,

Morang Sugar Mills, Raghupati Jute Mills, and Juddha Match Factory were

established with the investment of Indian Businessman after 1941 in

Biratnager city that is close to Indian Boarder. The outbreak of Second World

War gave added impetus to this trend. Within a period of 10 years, 63

industrial units were opened in the country with a capital investment of Rs. 72

million.

Industrialization in Nepal with regular attention of government began only after

the country opened its border to the outside world in 1951. Agro processing

industries came into the existence after fifties. Construction material

production companies came during sixties and export oriented carpet and

garment industries came into the existence after seventies. The service sector

is now recognized as a prominent place in the national economy. Few

important service sector that contribute in Nepalese economy after 1990s are

hotel, travel, tourism, banking, financial services, insurance, entertainment,

education, health care, and consultancy.

3
There are 898 tourist hotels in Nepal including 97 star and 791 non-star hotels

in year 2001 (Panta, 2003) Tourism is a major industry of Nepal that is one of

the fastest growing and world's largest industries. Tourism industry has a

significant role and place in the Nepalese economy. Its contribution is

significant in employment generation and foreign exchange earnings. Its share

of contribution to GDP was about 3 percent (Economic Survey, 2002).

One of the most contributing sectors in the Nepalese service sector is the

financial sector. It employs about 50,000 persons, which is significant in total

employment opportunity available in the country. There have been altogether

17 commercial banks along with total branches by 383. Similarly, total number

of development bank has reached 14 by mid-April 2003. The number of

insurance companies has reached 18 and the number of finance companies

has totaled 55 and by mid-March 2003 (Economic Survey, 2003).

The trade and service sector in Nepal has been playing a very influential role

in imports, exports, and domestic market. The trading and service firms are

major players in the total distribution chain. Some of the famous export

products in the country are woolen carpets, ready-made garments, leather and

leather products, pulses, handicrafts, tea and coffee, and indigenous paper

products. Germany, USA, Austria, Netherlands, and UK are the major export

markets for Nepalese carpets. USA, Canada, Germany, France, Netherlands,

UK, and Switzerland are the major export market of Nepalese garments. USA,

Japan, Pakistan, Italy, Netherlands, Switzerland, and Brazil are the major

export market for Nepalese leather and leather products. Pulses are exported

mainly to Bangladesh, Singapor, Sri Lanka, Germany, and Korea. Major

Nepalese handicraft markets are USA, UK, Germany and France. Tea and

4
 coffee are exported mainly to Germany, Japan, France, Italy, Hong Kong, and

UK (Export Directory of Nepal, 2000).

His Majesty's Government Nepal has promulgated Industrial Policy 1992 to

increase the contribution of industrial sector to the national economy through

enhancement of industrial production and productivity. It also aims to utilize

local resources, reduce the pressure of unemployment, and to adopt the

appropriate polity conductive to industrialization for balanced development of

the country.

Foreign Investment and One-window Policy 1992 was issued to build a strong

and dynamic economy by generating additional opportunities for income and

employment through expanding productive activities. It also aimed to increase

participation of private sector to mobilize the internal skills and resources.

Similarly, the major objective of export policy is to boost quality of exportable

products, diversity the exportable products, utilization of existing manpower,

and to export hydro-electricity of the country.

1.4. Globalization of Nepalese economy

During the four decades of Rana regime Nepal practiced controlled economy.

Businesses were not encouraged for competitive market mechanism. It is

commonly realized that most of Nepalese enterprises had a limited capacity,

operating with low levels of technology during the era, and they were not

efficient and competitive. After the restoration of democracy in 1990 Nepal

introduced "economic liberalization policy". However, businesses realized

their limitations to adapt their business in the changed situation. They faced

many challenges such as many competitors were entering into their sector.

5
 It has become very difficult to keep pace with changing global trends for

Nepalese businessmen. New technologies are being developed, new

approach of management has evolved, new philosophy of marketing emerged,

and level of competition increased but Nepalese companies. Globalization has

provided challenges as well as opportunities to businesses in the country. Old

traditional business face collapse whereas new ones have the capacity to be

competitive.

Regional and global environment has presented new impetus to the business

community. Recently movement of SAFTA and Nepalese membership in WTO

has created many opportunities as well as threats to the Nepalese business

community. Following section discuss on the WTO and its impact to Nepalese

business community that appeared as one of the most important issue of

global business environment.

1.5. World Trade Organization (WTO) in Nepalese context

Nepal has adopted a policy of political, economic and social reforms focused

on creating environment conducive to the private sector participation in the

development process after the restoration of democracy in 1990. A liberal

policy was adopted to integrate trade sector into the international economy,

attract foreign investment, make domestic products competitive, and generate

employment. Ninth plan designed the long-term goal of strengthening the

globalization of the economy through accession to the World Trade

Organization (WTO). Now, Nepal has become 148th member in WTO that has

opened door for many opportunities as well as threats.

6
1.6. Task environment

Task environment is industry specific business environment. The common

competitive business environment that members of an industry share is known

as task environment. Task environment comprises mainly competitors,

suppliers, and customers along with all other stakeholders (Johnson &

Scholes, 2003).

Now, it is necessary to understand Nepalese organizations and their task

environment before designing such a comprehensive study on Nepalese

general business environment. Nevertheless, it is very hard to fid the fact that

shows the competitive environment situation thus focus of present study lies

into the general business environment factors that might not cover the task

level business environment.

1.7. Statement of the problem

Business entrepreneurs perceived Nepalese business environment not very

conductive and favorable. During the past decades, Nepal followed controlled

policies but businessmen perceived that they had to visit government offices

many times just to register and renew their business enterprises. Although the

government has declared liberalization businessmen blame that government

still continues to create obstacles to the business community.

The institutions and organizations of government who are supposed to provide

a conductive atmosphere for development of a market economy are not very

competent. Policy objectives and plans may be laudable but their

implementation is far from satisfactory. Many of the people in charge of the

implementation process are not professionally competent. The tax

7
administration is not perceived positively in business community. Many of the

country's laws and rules are contradictory. The effectiveness in the formulation

of those policies and their implementation are in question. Nevertheless,

government wanted to encourage the private sector involvement in Nepalese

Industry and commerce.

Socio-cultural environment provides opportunities as well as threats to the

business community. Peoples' purchasing power and economic condition of

the country directly affects Nepalese businessman. Now, banking interest rate

is decreasing but business community still does not found it very safe level to

get lending from banking sector. Overwhelming impact of globalization has

created new tension among the Nepalese businessmen. Fast track change in

technology has provided many business opportunities as well as threats.

In this context, there are many research problems. These issues are still

unexplored pursuing scientific research. Now, there is lack of a scientific

survey instrument that assesses general business environment. Further, the

state of Nepalese business environment is to be assessed using such

instrument to find the reality in present context. Therefore, few researchable

problems can be derived from the above-discussed problems. Some of the

following specific research questions are identified as follows.

1. What is the state of Nepalese business environment in Nepal?

2. How effective are the government business policies?

3. What are the major challenges in Nepalese business environment?

4. What are the major opportunities in Nepalese business environment

perspective?

8
1.8. Objective of the study

Basic objective of this study is to design an effective instrument to assess the

Nepalese business environment in the present context. It also aimed to find

the existing position of opportunity and threats to the Nepalese business

community based on the survey findings. Hence, the specific objectives of the

study are designed as follows.

1) To design a reliable and valid instrument to assess the general Nepalese

business environment.

2) To assess the existing Nepalese business environment.

3) To identify the major opportunities and threats available in general

Nepalese business sector.

1.9. Methodology of the study

1.9.1. Research design

Present study will pursue the developmental research design. First of all,

interview was taken with the selected experts to design the list of Nepalese

business environment factors. For this purpose, some qualitative tools such as

content analysis are also used. In the survey design, list of statements have

been provided to the respondents so that factor analysis could be made to

design a survey instrument.

A reliable and valid instrument has been carefully designed to assess the

Nepalese business environment. This valid instrument has been administered

to assess the real Nepalese business environment. Many statements have

been included in the questionnaire to find general opportunities and threats.

Finally, survey was made on the selected sample to make an exploratory

9
 factor analysis. Likert type of scale was used to collect the responses using

research questionnaire.

1.9.2. Sample of the study

First phase interview was taken with selected small groups of business

executives to explore the understanding of business environment by Nepalese

professionals. Then, second phase study was made on large sample of

around one thousand respondents of few HMG officials, FNCCI executives,

professors, businessman, and other professionals. Thus, it pursued a non-

probability and convenient stratified sampling technique to assess the

respondents' opinion.

1.9.3. Methods

Content analysis was designed at the beginning of the study. Thereafter,

exploratory factory analysis was made on collected responses to design a

valid and reliable instrument. Lastly, descriptive analysis, confirmatory factor

analysis, and analysis of variances were used for in-depth analysis.

10. Limitations

This is the first systematic research attempted in Nepalese context. The

research is the first in nature thus may not be enough for generalization of the

findings. Cross-sectional data is another limitation of this research. Causal

relationship based on longitudinal data would be appropriate for such research.

Sample of the study is relatively small to generalize the findings of the study.

However, the findings are very useful for the forth-coming research in this

regard and recommendation might be invaluable for the policy makers.

10
11. Format of the study

Detail literature review has been made in introduction and review of literature

chapters. It helped to understand the theoretical framework and applied works

in this area. It also helped to value add in research design of this study. Use of

scientific tools is the essence of this research that is described in the third

chapter. Stepwise data collection and their analysis has been presented and

discussed in following chapters. Lastly, findings and conclusion is presented.

Research report began with the abstract and table of content that contained

bibliography and appendices at the last part.

11
 CHAPTER-2: REVIEW OF LITERATURE

2.1. Background

Present chapter explores some more conceptual and contextual issues in

Nepalese general business environment. All set of forces that influence to the

business enterprise are referred as business environment. More general and

common factors come under the general environment category. Task

environment are also referred as industry or close business environment that

affects to a certain industry. Scope of the present research is confined more

specifically to the general business environment. Therefore, it focuses into the

general business environment and touches into other issues such as

environmental analysis, cultural issues, and internal environment.

2.2. Business environment

Environment literally means the surroundings, external objectives, influences

or circumstances under which someone or something exists (Kazmi, A., 1999).

It refers to all internal and external forces that have a bearing on the

development, performance, and outcomes of a business organization

(Agrawal, 2004). Business environment is thus the sum of surrounding and

influencing the life and development of the firm (Pant, 2003) and ultimately to

the overall business community.

The general business environment includes factors in several sectors outside

the firm which can lead to opportunities or threats. These include the

socioeconomic, technological, and governmental sectors (Jauch & Glueck,

1988). It is, therefore, sometimes known as the PEST indicating the

12
 importance of political, economic, social and technological influences on

organizations (Johnson & Scholes, 1997).

2.3. Environmental analysis

Organizations like business enterprises, as social creations of people, are

dynamic and complex systems. In order for these systems to maintain a

symbiotic relationship with their environments they must develop the

appropriate sensitivity towards the changes and differentiations of their

environments. The identification of the environmental changes, which are

"captured" by the scanning system of the organization, creates the appropriate

transformations to the communication system with the outcome on the

structure of organization itself (Kourteli, 2000).

Since the interpretation of any interrelationships between the organization and

its environment depend upon people's communicational abilities and

susceptibilities along with the communicational technologies that they choose

to use (Vickers, 1968). However, the general process of environmental

analysis starts from assessing nature of business environment. Then, which of

the many different macro environmental forces likely to affect the

organization's development or performance. Lastly identifying key

opportunities and threats for strategic position is a major outcome of

environmental analysis (Johnson & Scholes, 1997).

2.4. Study of general business environment in other countries

Thousands of business environment studies are conducted each year through

out the world. Present research might not review all these areas due to limited

access to the international literature and other limitations of this research.

13
However, few very interesting and related research works are reviewed in this

section.

Business environment in Russia was found full of many problems such as

political instability, deep-rooted industrial inefficiencies and a disoriented legal

and institutional framework, it must be remembered that significant progress

has been achieved by the reform program in establishing the foundations of a

market economy. However, adding those hindrances outlined in this article to

Russia’s more unique circumstances suggests that it will no doubt take a

relatively long time for this ex Soviet-bloc country to emerge fully from her old

chrysalis. (Dent, 1994)

In order to analyze the stability or volatility of the country, respondents were

asked to characterize the business environment (political, economic, social,

technological and ecological factors) of these countries for the period between

1985 and 1995. Business environments were rated as stable or volatile using

a scale ranging from 1 (totally stable) to 5 (totally unstable) with 3 being

considered as neutral (Wu, Costa, & Teare, 1998).

The results show the political and socio-cultural environments in China as

fairly stable, and the economic and technological environments as neutral

(rank 3). In contrast, for respondents based in Eastern Europe, apart from the

ecological environment, which is rated as neutral, all the other four aspects are

regarded as volatile with the political environment regarded as the most

volatile (Wu, Costa, & Teare, 1998).

There are many factors and aspects of Brazilian culture and law of which to be

aware if thinking of conducting business there. But many of those will no doubt

14
 have to ‘sink in ’through experience. Nevertheless, a basic knowledge of the

most important characteristics of Brazilian etiquette can possibly save a lot of

embarrassment. Equally important is that one should be aware of any

regulations regarding what type of visit one intends to make (Turner & Kleiner,

2001).

There are three types environmental research being conducted in today's

context. First kinds of research are organization or industry specific. They are

applied and ethnocentric. Next are policy research conducted to find out the

national position in general business environment. Another focus of research

is fundamental and basic that not only attempts to explore the situation but

also contributes in theory building process. Present research is more inclined

to second and third categories but some ethnographic nature might remain to

due to cultural factors or research context. In this context, it is necessary to

review the culture of Nepalese organizations that is discussed in the following

section.

2.5. Nepalese organizational culture

Regarding to the culture of Nepalese organizations, similarities were observed

among public and private Nepalese enterprises on organizational climate. Few

such climate factors as security, participation, warmth, and support explained

job satisfaction in Nepalese context (Pradhan, 1999). Paudel (1992) reported

that management is almost feudalistic and decision-making even on minor

issues is centralized in Nepalese public sector. Upadhyay (1981) found a low

level of employees’ morale and Koirala (1989) found the poor state of

employees’ participation in Nepalese organizations.

15
Panta (1984) observed tradition bound, unilateral and authoritative system of

management in Nepalese organizations. Agrawal (1977) characterized the

Nepalese management environment as the art and science of avoiding

decisions, blocking the job through delaying, do nothing and mismanaging.

Similarly, Rana (1971) stated the limitation factor as management not the

capital in Nepal.

Pradhan (1988) reported that management professionalism has not yet been

seen in neither of the sectors because of lack of awareness and sense of

commitment in the public sector and lack of initiative in the private sector.

These findings reveal some clues on the average situation of Nepalese

organizations. The main reason for the poor Nepalese organizational

atmosphere might be vulnerable socio-economic and political-legal situation of

the country.

Nepalese employees working in various public and private sector

organizations were found dissatisfied with their management and

organizational policies in the empirical research. Nevertheless, employees

showed their strong association with their organization, high commitment at

their work, and exhibited very strong citizenship behavior in the findings of

Gautam (2003). A research conducted among the respondents of four state

owned public enterprises, Gautam, van Dick, and Wagner (2001) found

affective commitment at high level that was a very good sign for managing

Nepalese human resources.

There are some studies in Nepal that highlight the common attitudes and

belief of Nepalese peoples. Agrwal (2001) provided some examples of widely

held attitudes and believes among Nepalese people. He argued that time is
16
 not important for Nepalese people, pace of change is slow, there is lack of

achievement orientation, and they believe in working for government rather

than private sector.

2.6. Task and internal environment of Nepalese organizations

Hundreds of case studies and comparative studies are conducted each year in

Nepal in this regard. Nepalese banking sector was found very strong and most

of the Nepalese commercial banks were found in good position with some

limitations in earlier studies (Dhital, 2000, Lama, 2004, Neupane, 2004). Some

problems were found in Nepalese capital market (Khanal, 2004). Most of the

manufacturing companies were found sick. Trade and service sector are also

being heavily influenced by ongoing Maoist insurgency in Nepal (MOF, 2004).

The detail discussion is beyond the scope of this research, therefore,

interested readers are referred to go through other publications (e.g., Pant,

2003, MOF, 2004, CBS, 2003)

17
 CHAPTER-3: RESEARCH METHODOLOGY

3.1. Background

Present study pursues developmental design of the study. It was focused to

find out the Nepalese business environment components and to design a

scientific instrument to assess general business environment. Therefore,

researcher entered into the investigation from interviewing small focus groups

as a part of content analysis. Later the ideas or contents uses were taken as

the basis of designing a comprehensive instrument for assessing general

business environment components. Thus, survey design was used to for

intensive and more scientific investigation. Population, sample, tools, and

procedures followed are discussed in the following sections.

3.2. Research design

Some preliminary part of the investigation follows content analysis to find out

whether Nepalese respondents have similar ideas about general business

environment. Pilot type of primary survey was also designed before designing

a comprehensive survey instrument. These primary studies used interview,

checklist, and structured schedule to collect response from the respondents.

Later, a scientific structured questionnaire was designed deriving ideas from

the earlier studies for exploratory and confirmatory factor analytical design.

3.3. Population and sample

All the stakeholders and parties involved in Nepalese business community are

the population of this study. However, it is almost impossible to get the ideas

or responses from all the respondents. Thus, samples are selected for the

study. Present study is a very minor and first study in nature. It used many

18
 small groups representing five to seven organizations chief executives for

primary studies including content analysis. Besides, it classified respondents

into four strata a) government employee b) businessmen or entrepreneurs c)

academician and researchers and d) others professionals who couldn't be

covered into above categories.

It was not possible to pursue a probability sampling for present study out of

such a large population. Therefore, conveniently approached 992 respondents

only 965 valid questionnaires have been collected. Eighty-five MBS students

of Nepal Commerce Campus took part as data collector in survey design work

and twelve BBA students of Shanker Dev Campus took part in collecting

information for content analysis and primary studies.

3.4. Nature of survey sample

Nine hundred ninety-two respondents were approached and altogether more

than 92% valid responses were collected from 965 respondents. Demographic

status of the respondents is shown in the following parts. Gender status of the

sample is presented in the table 3.1.

Table 3.1: Gender frequency of survey sample

Frequency Percent Valid Percent Cumulative Percent

Male 807 83.6 83.6 83.6
Female 158 16.4 16.4 100.0
Total 965 100.0 100.0

Above table shows that there were more than eighty three percent male and

sixteen percent female in the sample of the survey design. Very few females

are there in most of the professions, therefore, the result is not surprising.

19
Following table 3.2 shows age group of the respondents. Diverse age group

proves the heterogeneity of the respondents.

Table 3.2: Age group frequency of survey sample

Valid Cumulative
Frequency Percent Percent Percent
25 or below years 89 9.2 9.3 9.3
26 to 30 years 246 25.5 25.7 35.0
31 to 35 years 215 22.3 22.5 57.5
36 to 40 years 128 13.3 13.4 70.8
41 to 45 years 128 13.3 13.4 84.2
46 to 50 years 70 7.3 7.3 91.5
51 and over years 81 8.4 8.5 100.0
Total 957 99.2 100.0
Missing 8 .8
Total 965 100.0

Above table shows that majority of the respondents were within the age of 35.

More than a quarter of respondents were within the age group of 35 to 45.

Altogether, 84.2 percent respondents were found under the age of 46 years

old. Few respondents were found above 50 years age group and respondents

below 25 years age group. Therefore, sample of the present survey study are

heterogeneous and representative.

Following frequency table shows respondents professional groups. Sample

was designed from four strata: Job holders, Entrepreneurs, Academicians, and

Other professionals. Even though it was not possible to follow probability

sampling but data collectors were directed to approach respondents covering

the all the professional groups. Nature of the overall sample was tabulated and

their professional groups frequency is presented in the following table 3.3.

20
Table 3.3: Professional groups frequency of survey sample

Cumulative
Frequency Percent Valid Percent
Percent
Job holders 240 24.9 24.9 24.9
Entrepreneur 361 37.4 37.4 62.3
Academicians 150 15.5 15.6 77.9
Freelancers and others 213 22.1 22.1 100.0
Total 964 99.9 100.0
System 1 .1
Total 965 100.0

Above table shows that all the groups represent minimum 15.6% to maximum

37.4% of the total respondents. Above results shows highest number of

respondents in entrepreneurship category that is quite natural. If we follow

proportionate stratified sampling the percent can be expected much more than

that. Similarly academicians are lowest in the number that is also consistent

with the existing reality. In general, the frequency distribution of the observed

sample is justifiable for generalization of the findings.

Similarly following table 3.4 shows classes of the professional experience of

the respondents in their related professions.

Table 3.4: Professional experience frequency of survey sample

Cumulative
Frequency Percent Valid Percent Percent
5 and below 309 32.0 32.3 32.3
6 to 10 years 318 33.0 33.2 65.4
11 to 15 years 146 15.1 15.2 80.7
16 to 20 years 79 8.2 8.2 88.9
21 and more 106 11.0 11.1 100.0
Total 958 99.3 100.0
System 7 .7
Total 965 100.0

21
 Respondents were found having few years to many years professional

experience. Experience of five years or below and 6 to 10 years group were

found almost equal. Each of these groups comprised nearly 33% percent of

the total sample. Besides, respondents having more than 11 years

professional experience were found around 35%. Thus, frequency distribution

of respondents' professional experience showed that observed sample is

representative of the total population.

3.5. Instruments

Researcher used tape recorder and checklist for content analysis and primary

survey. A structured scientific instrument was designed that had five business

environment components including 20 major items and five demographic

variables. Some more about the questionnaire design and testing its validity is

discussed in following chapter five. Designed questionnaire and checklist used

for the study are included in appendices of this study.

3.6. Tools and techniques

Present study used spreadsheet or excel for text management and designing

their descriptive reports. Researcher tabulated opinion of the respondents

from the structure questionnaire in SPSS 11.5 version. Mostly descriptive

statistics such as mean, standard deviation, and frequency tables were used

in SPSS system. Analysis of variance was used to detect the differences

among the different demographic groups in all the variables used in the study.

EQS 5.7b version was used to test confirmatory Maximum Likelihood factors

of Nepalese business environment.

22
 CHAPTER-4: CONTENT ANALYSIS AND PRELEMINARY STUDIES

4.1. Background

Researcher has designed few small projects to find out what respondents

understand. This study might help to find out the relevance of business

environment among business community. Similarly, the findings of these mini

projects could be used to identify the statement to be used in the

questionnaire. Altogether four mini projects were designed to study the

contents related to Nepalese business environment and relevance of them.

First two projects are completely based on content analysis where researchers

asked to express their opinion in two different statements. The statements

were recorded and analyzed to find the contents or words used by the

respondents. Next two other projects were the primary survey of business

environment designed to find out the relevance of business environment in

their context using different scales.

4.2. Project-A

Researcher has asked about the components of business environment to find

whether the respondents' opinions come close to the theory of business

environment. One of the fundamental issues is whether the respondents really

mean the components similar to the theoretically purposed in business

environment. Thus, the first project was designed to assess content validity of

business environment business among the business professionals.

Method: Conveniently selected seven organizations (non-probability sample)

were taken out of overall Nepalese business community. Chief executives or

23
 their representative of the organization were the participants in the interview

for content analysis. They were asked to explain about the general business

environment. Researcher checked in the variable list based on their response

as presented in the following table 4.1. The content analysis presents very

simple descriptive results of the study. Respondents who were able to

precisely express the business environment component are listed in the

following table.

Ten respondents were approached through telephone conversation but only

seven have provided opportunity to get interview with them. It was very simple

types of structured interview using a checklist. Items in the checklist were

statement about how they understand Nepalese business environment and these

factors are relevant to their business system or not. Respondents' opinion was

captured in tape recorder and analyzed and reported by the researcher. Twelve

Bachelor in Business Administration (BBA) students of 2003 forth semester batch

of Shanker Dev Campus Putalisadak have taken part as data collectors of this

study.

Table 4.1: Contents of general business environment factors based on interview results

S.N. Name of the Political-legal Economic Socio-cultural Technological

organization
1 Nepal Bangladesh
Bank Ltd.
2 Nepal Housing
Dev. Fin. Co. Ltd.
3 World Wide
Institute
4 Ishan Infosys Pvt.
Ltd.
5 Himalayan Bank
6 Philippine Airlines
7 NIC Bank
Total 6 3 1 2

24
 Results: Above finding shows that Nepalese respondents understand almost

all theoretically proposed factors of business environment in their context.

However, they have perceived political business environment one of the most

pertinent and influencing forces in their business areas. Second important

factor was found economic factor based on their response. However, the

findings are based on the contents words used by the respondents, therefore,

it may not be suitable data to draw conclusion about the intensity of these

environmental forces to Nepalese business community.

4.3. Project-B

More comprehensive study was conducted in the second project for content

analysis to assess the relevance of both external business environmental

factors. It included both general business environment and industry level

environment relevant to Nepalese business community. This project has

attempted to capture all the contents of general business environment such as

political-legal, socio-cultural, economic, and technological along with the

industry or task environments.

Method: Only eight organizations were visited and interview was taken with

chief executives or responsible managers. Their interview was recorded in

tape recorder. Researcher noted down the contents used by the respondents

in each category of business environmental factors as shown below. General

environment components were found clearly identified but task environmental

factors couldn't be distinguished thus recorded into two competitors and others.

25
Table 4.2: Contents used for general and industry level business environment factors

Organizations Political Economic Socio- Tech- Competition Others

Legal Cultural nological
1. Last Resort
2. Hotel Ambassador
3. Everest Bank

4. National Campus for

Bus. Studies
5. New Business
Age
6. Nepal Stock
Exchange P.Ltd
7. Leasing and Finance
Co
8. Namaste Travel
Agency
Total 6 4 1 2 3 3

Results: Above presented result clearly shows that most of the respondents of

present project clearly identified Nepalese political legal environment as one of

the relevant business environment out of four components. Nevertheless,

significant result was found in case of economic environment where fifty

percent respondents used the contents or words related to economic business

environment. Respondents identified rest other business environment factors

but relatively lower than for earlier two components. Regarding to the task

level business environment only the competitor could be clearly found but

some mixed ideas were found thus recorded them into others category.

It indicates that theoretically assumed four components of general business

environment are also valid in Nepalese context. Most of the respondents

perceive political environment more pertinent due to existing political legal

environment of the country. However, the result shows the all the components

can be relevant in Nepalese business community. Besides, competitor factor

26
 was found clearly identified components with some mixed and ambiguous

responses. Respondents used some words such as competition and pressure

and resources that were found ambiguous and multidimensional type of

components thus recorded into others.

4.4. Project-C

Third project was designed to find the awareness of business community

about the business environment. One of the basic issues is whether the major

components of business environment are relevant to their sectors. Thus, the

present analysis was designed to find out the respondents opinion regarding

to the relevance of these business environment factors.

Method: Six conveniently selected Information Technology related

organizations were taken as the sample for the study. Similar to the first

project, chief executives or their representatives have taken part as the

respondent in opinion survey for this project. Checklist was designed with four

external environmental factors and three industry level business environment

factors in three point ordinal type scale to find out the respondents rating of

each factor.

Following table-4.3 presents the descriptive status of the survey. It shows the

status of external and industry level environment in the selected organization

based on the opinion of the representatives. The result shows how

respondents perceive components of general and task level business

environment. Responses on high category show that the component is very

important or highly influencing, medium means respondents perceive the

27
 factor normally or at the average level, and low means respondents perceive

the factor not very important in their business sectors.

Table 4.3: Results of preliminary survey on general and industry level environment using checklist
Name of organization External Environment Competition
Political Eco. Socio Tech High Mod Low
1. I.E.C. High Mod Low High

2. Yamaha [MAW] Mod. High Mod. High

3. Studio 7 Low Mod High Mod

4. WAVE [UTL] High Mod Low High

5. Samsung Digital High Mod Low High

World
6. Unlimited Computer High Mod Low Mod

Total H4,M1,L1 H1,M5,L0 H1,M1,L4 H4,M2,L0 3 2 1

Results: Sample used for the present project was from Information Technology

sectors, therefore, technological environment was found very important factor

to the respondents. Out of six four rated IT sector high and rest two rated it at

the moderate level. Next important business environment was found political

legal business environment where three rated the factor at high level and rest

two rated into moderate and low. Response on economic business

environment was found at the moderate level by majority of the respondents

and one respondent rated it at high level. Majority of the respondents rated

socio-cultural business environment at the low level and two rated into

moderate level. Level of competition was found high in this sector based on

the above results.

In summary, technology and political environment were found very important,

economic environment at moderate level, and socio-cultural business

environment at low level of importance. Basically, general business

28
 environment is common to all the sectors but to some extent it is also an

industry specific. Generally, task level business environment is industry specific

but the general environment is more common to all the business sectors.

4.5. Project-D

Relatively more rigorous and comprehensive preliminary survey was designed

to find out the relevance of theoretically assumed business environment

components in Nepalese business community. Researcher has attempted to

identify the relative importance of business environmental factors among

selected Nepalese respondents. This study will help to find out the relative

weight of business environment components.

Method: Conveniently elected ten organizations from diverse areas were

taken as the sample of the study. Chief executives or their representatives

have taken part as respondents in the structured questionnaire survey. A

questionnaire with general and industry level business environment factors

was used to find out relative importance of specific business environment

component in their sector. Researchers asked statements and requested them

to assign the relative weight of the business environment components. Meta

cards were also used to get their relative weight on different components of

general and industry level environment.

Following table-4.4 presents the descriptive status of the survey. It shows the

relative importance of each business environment components. Total weight

was given 10 that could be divided into different five components of general

environment. Similarly, total weight 10 was assigned for four factors of task or

29
 industry level environment. Therefore, the responses are the opinion collected

from the respondents.

Table 4.4: Contents used for general and industry level business environment factors

EXTERNAL ENV. INDUSTRY LEVEL ENV.

Socio-Cultural

Technological

Competitors
Economical

Customers

Suppliers
S.N.

Political
ORGANIZATIONS

Others
Total

Total
1 Development Credit Bank
4 3 1 2 10 4 3 1 2 10
2 Intenational Leasing & Finance
4 3 2 1 10 4 2 2 2 10
3 Kantipur television
2 3 4 1 10 4 2 3 1 10
4 Orchid Tours & Travels (P.) Ltd.
4 3 2 1 10 4 3 2 1 10
5 Bhajuratna Engg. & Sales
4 3 1 2 10 4 3 1 2 10
6 A.J. Overseas Trainning
4 2 1 3 10 4 1 3 2 10
7 The Himalayan Times
2 4 1 3 10 3 4 2 1 10
8 Thamserku Trekking (P.) Ltd.
4 3 1 2 10 4 2 1 3 10
9 Himalayan Snacks & Noodles
4 2 1 3 10 4 2 3 1 10
10 BishwoJyoti Cinema (P.) Ltd.
3 3 3 1 10 4 2 3 1 10
TOTAL
35 29 17 19 100 39 24 21 16 100

The above table shows the most influential components of the general

business environment of Nepal appeared as political and economic

environment among general environmental factors. Customer factor was found

the most affecting task environment factor in Nepalese business sector based

on the present preliminary study.

In conclusion, all above project finding showed that Nepalese respondents

identified general and task environment factors very well. They have also rated

components of business environment. Generally, respondents have given very

high importance to the political-legal environment followed by economic

business environment. In task environment side competitor was found more

relevant and clearly identified factor.

30
 CHAPTER - 5: INSTRUMENT DESIGN FOR GENERAL BUSINESS
ENVIRONMENT ANALYSIS

5.1. Background

Present chapter is directed in design of a valid research instrument for

Nepalese business environment analysis. This chapter uses reliability analysis

and factor analysis to find out the reliability and validity of the scales designed

to assess Nepalese business environment. More specifically, reliability analysis

helps to find out how effective the used scales are in precisely measuring the

concepts. Similarly, exploratory factor analysis can be helpful to find out the

potential factors or dimensions of the theory or concept. Same factors can be

confirmed or model fit of the assumed factors is tested in different approach

using confirmatory factor analysis.

5.2. Concept operationalization and items design

There were five major concepts of general business environment selected for

present study. Each concept was the part of general business environment

theory. Earlier chapter identified that Nepalese business community

understand the theoretically assumed and commonly used four factors of

general business environment. Nowadays, global business environment has

also appeared as a very important component of general business

environment. Thus, one more component of business environment global

business environment was included in the questionnaire.

Nowadays Nepalese membership in WTO and its future impact in Nepalese

business are taken very important. It was found while researcher has

interviewed many experts in different sectors. Similarly the world wide trend of

31
liberalization and capital oriented economy has also influenced Nepal. Thus,

these two issues were captured to design the items to assess an aspect of

global business environment more relevant to Nepalese business community.

His Majesty's Government Nepal (HMG/N) affects business communities in

many ways. In our interview we found most of the issues related to the tax

administration, facilities or subsidies. But these issues are also the close part

of national economy. There are many other economic issues such as whether

customers have good purchasing power, capital market is favorable for

investment, and banking interest rate is favorable for the business sector.

Items related to all these issues were selected to assess economic

environment component of business environment.

Socio-cultural environment is very wide and it has many areas. Out of them

some issues were found very important in earlier interview in focus group

study. These issues were how business community understand and respond

society, how far they are able to understand need of customers, diversification

in Nepalese business due to western cultural influence, business education

issue, and demographic status of Nepalese people. Therefore, five related

items were designed to assess the respondents view to assess the Nepalese

socio-cultural environment.

Technological environment also effects business community thus it is taken as

one of the core component of business environment. Based on the earlier

interview findings, most of the issues appeared related to new technological

advancement. There were challenge to business community due to

technological advancement, opportunity appeared to business community due

to new technological advancement, capital requirement to adapt advanced

32
 technology, and the difficulties appeared to cottage industries due to new

technological development. Four items were designed capturing these issues

to assess the Nepalese technological business environment.

Focus group interview found politics and government one of the vital factors

that affect Nepalese business community. Many of the experts highlighted

rules, regulation, and system of the government that facilitate and govern

business community. Tax administration was another highlighted issues in the

interview. Most of the experts indicated Maoist problem as one of the highly

affecting factor to the business community. Reviewing all these issues,

researcher has designed four items to assess the political-legal Nepalese

business environment.

5.3. Questionnaire design

A structured questionnaire was designed including twenty items of five major

business environment areas. Items were designed in six point Likert type scale

anchored by 1=Strongly Disagree to 6=Strongly Agree. A clear instruction was

printed at the starting of the questionnaire. Few nominal scale items were

designed to record the demographic information of the respondents.

Questionnaire set was designed in a page in an attractive format so that

respondents perceive it important.

5.4. Method

Master level students of business policy and environment were used as the

surveyor in data collection process. Eighty-five MBS students of Nepal

Commerce Campus have played their role in this process. They were

instructed how to select sample, how to approach them, and how to administer

33
 the questionnaire. Each student has to approach at least fifteen respondents

from four clusters namely government officials, private businessmen,

academicians, and others. Each of these students has written his or her own

research report based on descriptive data analysis of their collected data set

for the fulfillment of assignment of business policy and environment subject

and deposited the questionnaire to the researcher.

Thus the survey assumed all the Nepalese government officials, private

businessmen, academicians, and other professionals as the population of the

study. Conveniently approached respondents in these clusters are the part of

sample in this study. Out of total eighty-five students only sixty-five students

have taken part in the data collection process of this study. Out of total

submitted nine hundred ninty-two filled questionnaire nine hundred sixty-five

questionnaires were found validated for data tabulation and further analysis.

In this context, out of total questionnaire 992 only 27 invalid questionnaires

were only 2.72% thus more than 97% of the questionnaire were found valid for

data analysis. All the valid questionnaires were tabulated in SPSS 11.5

defining variables for each item. Altogether there were only twenty-five

variables defined in SPSS 11.5 before analysis. Few major tools were used in

the analysis such as general descriptive for data screening, Cornbach Alpha

computation for reliability analysis, and Principal Component factor analysis to

identify factors.

5.5. Analysis

All the variables were properly screened to find out the mistakes in data entry

stages calculating maximum and minimum values of the entered value in each

34
variable. Thereafter, all the twenty variables related to the general Nepalese

business environment were preceded into principal component factor analysis

with Varimax rotation. Rotated solution of Principal Component (PC) factor

analyses was the basis of distinguishing factors and their related scales.

A system might have many subsystems. Same philosophy can also be

relevant in social science theories. Focus of the present study is to assess the

Nepalese business environment. Theory also proposes some factors of

business environment such as PEST (Political-legal, Economic, Socio-cultural,

and Technological). In this context, it is necessary to find out the factor

structure from the collected data set using certain instrument from certain

sample.

Factor analysis is an advanced multivariate technique to bring related

variables into the related groups. Factor analysis groups related variables into

related factors based on their inter-variable correlation. It is also similar to

regression model where a latent (hidden or unseen) factor that predicts many

observed variables in a single time. In general, set of many variables can be

the part of certain factor of a theory. Thus, present analysis will help to identify

the effective instrument to assess Nepalese business environment.

Cornbach Alpha assesses the inter-item correlation that finds how the items

used in the scale are contributing to assess a single concept. Thus, the

reliability analysis is a way to find out the instruments strength about how

precisely it assesses the hypothesized concept. Normally, high Cornbach

Alpha shows that the items used to assess the factor are directed into one

direction or precisely measuring the concept.

35
 Researcher used confirmatory factor analysis to cross validate the PC

exploratory factor analysis. EQS 5.7b structural equation modeling software

was used to analyze Maximum Likelyhood confirmatory factor analysis.

Hypothesized factor structures are tested using this ML confirmatory factor

analysis. It presents pictorial presentation and standardized solution of factor

loading in the pictorial presentation. It also shows test statistics such as Chi-

square and confirmatory factor index (CFI) to check the model fit. Similarly it

also calculates residual standard error parameter in terms of RMSEA so that

the level of the error can be assessed. Normally lower the Chi-square statistics

and RMSEA as well as higher the CFI and related factor loading prove good

model fit in this method.

5.6. Results

5.6.1. Principal component factor analysis

All the twenty items were defined as the variables of exploratory PC factor

analysis. Eigenvalue having more than 1.0 were extracted into the factor and

Varimax rotation technique was followed for presentation of factor loadings of

the factors. Eigenvalue result of the analysis is presented in the following

table-5.1

Table-5.1: Rotation Sums of Squared Loadings

Factors Eigenvalues % of Variance Cumulative %
1 3.111 15.556 15.556
2 2.380 11.899 27.455
3 2.198 10.989 38.444
4 1.865 9.326 47.770
5 1.756 8.781 56.551
6 1.628 8.142 64.693

36
 Above table-5.1 showed six factors having eigenvalues more than 1.0. These

six factors explained around 65% of the total variance. It is necessary to

review factor loading of items entered into the factor analysis process. Pattern

of factor loading can be the evidence of grouping of variables into related

factors. Rotated factor loading pattern of six factors are shown in the following

Table 5.2.

Table 5.2: Rotated PC Factor Matrix of Nepalese Business Environment

Variables or Items used in survey Factor Components
1 2 3 4 5 6
1. Liberalization is favourable for
Businessman
.018 .048 .016 -.034 .022 .893
2. WTO membership provided
opportunity to Business
.001 .032 .106 .018 .047 .887
3. Govt Nepal provides adequate
subsity to Businessmen
.817 -.046 .039 .025 -.072 .003
4. Tax system is very tidious for
Nepalese businessmen
.833 -.029 .077 .001 -.110 -.002
5. Purchasing power of customer
affects businessmen
.813 .013 .013 -.022 -.072 .060
6. Nepalese capital market is
favourable for businessmen
.782 .056 -.038 -.032 .138 -.006
7. Banking interest rate in lending is
satisfactory
.682 .135 .064 .025 .163 -.031
8. Businessmen are bearing social
responsibility
.060 .752 -.006 -.135 .221 .012
9. Businessmen are providing
product to fulfil customer interest
.011 .753 .026 -.100 .185 .025
10. Adoption of western culture
brought veriety in Nepalese .032 .702 .150 .107 -.101 .038
business
11. Applied education is lacking for
the development of business
.018 .676 .128 .246 -.296 .005
12. Demographic issues provided
opportunity to businessmen
.017 .488 .079 .371 -.418 .069
13. Technological development
created challanges
-.011 .132 .732 -.055 .008 .012
14. Technological development
created opportunities
.031 .076 .712 .015 .103 .133
15. Businessmen need more capital
to adapt developed technology
.039 .060 .800 -.016 -.122 .071
16. Local business are in crises due
to technological advancement
.065 -.003 .665 .041 .009 -.063
17. Registration process of business
is very hard
.027 .039 .042 .226 .790 .043
18. One windows policy appeared
successful in providing services
.012 .031 -.005 .344 .753 .056
19. Maoist revolution has adversely
affected Nepalese business sec.
-.015 .030 -.027 .840 .266 .004
20. Tax exemption in priority sector
increased investment in rural sec.
.003 .030 -.008 .862 .206 -.036
Note: Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 13 iterations.

37
Above table-5.2 showed factor-loading pattern of six factors. Factor matrix

showed clear pattern of loadings having high loading in the related factor and

low loading in other factors. Above result showed clear factor loading pattern

of items designed for four major components of business environments

namely Global, Economic, Socio-cultural, and Technological. Only the political

legal environment items were found loaded into two factors. However, items

were also found loaded to some extent into each other.

The factor-loading pattern showed clear picture. The factor loadings were

found highly loaded into their relative factors. However, items designed for

political legal factor have shown dual factor pattern in the current finding. All

other items were found loaded quite perfectly into the related factors except

two items 11 and 12 designed for socio-cultural environment were found

partially loaded into political legal environmental components. Nevertheless,

the higher loadings were found into their relative socio-cultural environment.

Researcher attempted to extract five factors from this data set. Thus, all the

variables were entered into PC factor analysis followed by Varimax rotation

and Five-factor extraction model. This factor analysis model would show

whether two different factors found in case of political legal environment would

come into a single set or not. If these two sets come into a single set then it

could be concluded that there are commonly five factors as assumed in the

theory. Otherwise, the items designed to assess political legal environment

should be revised in the future research. Following table 5.3 shows the pattern

of factor loading in extracted five-factor model.

38
Table 5.3: Extracted & Rotated PC Factor Matrix of Nepalese business environment
Component
Variables or Items used in survey 1 2 3 4 5
1. Liberalization is favorable for
Businessman
.015 .057 -.006 .022 .877
2. WTO membership provided opportunity
to Business
-.002 .046 .049 .113 .867
3. Gov. Nepal provides adequate subsidy
to Businessmen .814 -.024 -.032 .044 -.018
4. Tax system is very tedious for Nepalese
businessmen .829 -.005 -.076 .082 -.025
5. Purchasing power of customer affects
businessmen .811 .026 -.066 .015 .047
6. Nepalese capital market is favorable for
businessmen .786 .028 .071 -.043 .022
7. Banking interest rate in lending is
satisfactory .685 .110 .130 .057 -.004
8. Businessmen are bearing social
responsibility
.070 .674 .060 -.034 .099
9. Businessmen are providing product to
fulfill customer interest
.020 .688 .061 .000 .100
10. Adoption of western culture brought
variety in Nepalese business
.029 .720 .015 .138 .026
11. Applied education is lacking for the
development of business
.008 .748 -.018 .126 -.062
12. Demographic issues provided
opportunity to businessmen
.001 .604 -.011 .089 -.049
13. Technological development created
challenges
-.009 .130 -.033 .726 .027
14. Technological development created
opportunities
.033 .072 .083 .708 .147
15. Businessmen need more capital to
adapt developed technology
.036 .091 -.094 .801 .053
16. Local business are in crises due to
technological advancement
.065 .011 .036 .665 -.067
17. Registration process of business is very
hard
.041 -.062 .706 .025 .141
18. One windows policy appeared
successful in providing services
.023 -.046 .767 -.017 .128
19. Maoist revolution has adversely affected
Nepalese business sec.
-.026 .109 .794 -.014 -.089
20. Tax exemption in priority sector
increased investment in rural sec.
-.010 .121 .768 .007 -.142
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
A Rotation converged in 5 iterations.

All the above five factors explained around 58.8% of the total variance. Further,

the factor loadings presented in the above table 5.3 confirms that two different

factors found in case of four items designed in political legal environment were

found loaded into a single factor in this analysis. Each items were found highly

loaded into the main factor and insignificantly loaded into others thus it can be

concluded that present data set fits with the five factorial model of Nepalese

business environment. In general, items designed to assess the Nepalese

39
business environment were found successful to assess the distinct concepts of

each component.

5.6.2. Maximum Likelihood confirmatory factor analysis

Earlier findings showed five factorial model of business environment in present

data set that can be statistically tested using Maximum Likelihood (ML)

confirmatory factor analysis. Thus, it is necessary to verify the five-factorial

uncorrelated model in confirmatory factor analysis using EQS 5.7b to test the factor

structure of the items. Result of the analysis is presented in the following figure 5.1.

Figure 5.1: Result of Confirmatory Factor Analysis using EQS 5.7b

F1 Liberaliz
.86*
International
Business
Environment .71* WTO
Gov-Sub Social-R

F2 .80* F3 .54*
Custo-Int
Tax-Syst
.85* .55*
Nepalese Purch-P Nepalese West-Cul
Economic .76* Socio-cultural .67*
Environment Environment
.64* .70*
Capita-M Edu-Lac
.53* .52*
Bank-Int Demogra

Tech-Thr .70*
Register
.63* Govt
F4 F5 Procedure
.95*
Tech-Opp .55*
One-Win
.59*
Nepalese Nepalese
Technological Political-Legal
Environment .76* Capital-R Environment Maoist-I
.75*
.94*
Govt.
.51*
Local-Bus Policy .83* Priority

Chi-Sq.=974.02. P=0.00. CFI=0.87. RMSEA=0.07

F1=International Business Environment, F2=Economic Environment, F3=Socio-cultural
Environment, F4=Technological Environment, and F5=Political Legal Environment

40
Above result clearly shows that present data set best fits with the five-factorial

model of business environment. Higher order factor was found of two sub-

component of political legal environment. Factor loading of each item was

found statistically significant. In general, the model fit indices show adequate

model fit in present case. Chi-square statistics was found relative low and

significant at 0.01 level of significance. Confirmatory factor index (CFI) was

found close to 0.90 and RMSEA was found below 0.10. In summary, fit indices

clearly show good model fit of this five factorial model of business environment

in present data set.

5.6.3. Reliability analysis

Earlier part showed content validity of the designed instrument. Now, it is

necessary to assess the reliability of the scales having multiple items. Present

instrument had five different scales namely a) global, b) economic, c) socio-

cultural, d) technological, and e) political-legal. Each scale has more than two

items, thus, it is necessary to test how accurately these items assess the

same construct.

Reliability analysis is a best way to find out how scale items are precisely

measuring the construct. Thus, Cornbach Alpha is calculated to assess the

reliability of each scale of presently designed instrument. Following two items

a) Present liberalization is favorable for Nepalese businessmen and b) Nepal's

WTO membership provided opportunity to businessmen were entered into

analysis to find out Cornbach Alpha of global business environment scale in

present data set. Result showed satisfactory result. Result of 965.0 number

cases included in two Items showed 0.7553 Alpha. It was found higher that the

standard 0.70 (Karlinger, 1995).

41
Similarly five items related to economic environment were entered to find out

the Cornbach Alpha of these items. Items included in the study were as

follows.

1. Govt. subsidy & support provided to businessmen is not enough

2. Nepalese tax administration is tedious for businessmen

3. Consumers' purchasing power is affecting businessmen

4. Capital market is favorable for Nepalese businessmen

5. Bank interest rate is favorable for Nepalese businessmen

Result showed high reliability of the scale. there were altogether 965 cases

and five items in the analysis. Result showed 0.8448 Cornbach Alpha of these

items. It proves that these items are measuring the construct economic

business environment very well. Thus, present scale is very reliable to assess

Nepalese economic business environment.

Five items were designed to assess the Nepalese socio-cultural business

environment. List of the items used in the questionnaire were as follows:

1. Nepalese businessmen are fulfilling their social responsibility

2. Nepalese businesses are providing goods as per consumers' need

3. Copy of western culture made Nepalese market diversified

4. Lack of business education affected business development

5. Existing population growth, migrations, and urbanization created

opportunity to Nepalese businessman.

Result showed relatively satisfied reliability coefficient of the items entered into

the analysis. Cronbach Alpha of these above stated five items in 965.0 cases

42
were found 0.7298. Thus, the result was found satisfactory in comparison to

the standard coefficient of 0.70.

A four items scale was designed to assess the Nepalese technological

business environment. Following items were used in the questionnaire.

1. Change in technology created challenge to Nepalese businessmen

2. Technology change provided opportunity to Nepalese businesses

3. Businesses need more investment for new technology

4. New technology has made cottage and rural business difficult

Result showed satisfactory reliability coefficients of these items. Cronbach

Alphas of 0.7137 in these four items from 965 cases involved in the survey

proved satisfactory reliability of this scale.

Earlier five factor extraction method of PC exploratory factor analysis and

Higer order factor identified in ML confirmatory factor analysis justified four

items scale of the political legal Nepalese business environment. Following

items were used in this scale.

1. It is east to register and get permission for business sectors

2. One window policy for supporting business sector is successful

3. Maoist revolution adversely affected Nepalese business sector

4. Govt. priority and tax facility helped to foster the industries and businesses

in rural areas

Result of the analysis showed satisfactory reliability coefficient of the items.

There were only four items and data set of 965 respondents showed Cronbach

Alpha 0.7488 that was found satisfactory.

43
In summary, reliability analysis showed all the five scales of the questionnaire

used to assess five-factorial business environment reliable. Each scale

designed in the questionnaire was found satisfactory in precisely measuring

the related constructs. Therefore, it can be concluded that the scales designed

by the researcher were found reliable enough to assess the Nepalese

business environment.

44
 CHAPTER- 6: DESCRIPTIVE STUDY OF ENVIRONMENTAL ANALYSIS

6.1. Background

Present chapter aims to analyze the overall status of Nepalese business

environment based on the survey that used a carefully designed questionnaire.

Previous chapter investigated the validity and reliability of the scale of the

questionnaire. The questionnaire was found valid and reliable enough to assess

the five-factorial Nepalese business environment.

Descriptive analysis of Nepalese general business environment is made in this

chapter. Present analysis helps to understand how respondents understand

five-factorial Nepalese business environment. Furthermore, it will also help to

assess the general perception of the respondents and will help to find out the

existing scenario of Nepalese business environment based on respondents'

opinion.

6.2. Global business environment

Global liberalization has influenced Nepalese economy. Nowadays, Nepal

pursues market-based economy. It has privatized many public enterprises that

might be favorable to business community. Another major issues is entrance

of Nepal into the WTO network. Nepal has recently got the membership of

WTO that has provided some opportunities to the Nepalese businessmen.

These two are prime issues related to the global business environment that

affects Nepalese business community. Survey results of 965 respondents on

these two variables are presented below.

45
Table 6.1: General descriptive of Nepalese global business environment items

Items N Mean Std. Deviation

1. Liberalization is favorable for Businessman 965 4.5803 1.16083

2. WTO membership provided opportunity to
965 3.9326 1.26172
Nepalese business community
Valid N (listwise) 965
Note: Date generated in Likert type scale anchored by 1=Strongly Disagree to 6=Strongly Agree

Above descriptive result shows that liberalization is one of the positive

business environment. Mean value of the respondents was found moderately

high i.e. above 4.50 in six point Likert type scale anchored by 1=Strongly

Disagree to 6=Strongly Disagree. Relatively standard shows relatively

moderate level of dispersion among the respondents view. Therefore, there

might be two or more groups among the respondents who rated the scale

differently. However, at present the average response showed that

respondents are commonly agreed that liberalization campaign is favorable for

Nepalese businessmen.

Nepalese membership in WTO and its potential impact has appeared as one

of the very important issues. There might be opportunities as well as threats to

the Nepalese businessmen. Respondents were asked to vote their agreement

on opportunities provided Nepalese membership in WTO. In average,

respondent voted into slightly agree level that is very close to neither agree

nor disagree. Relatively high standard deviation shows that there might be

different groups among the respondents. Some responded very high and

some responded very low. In this case, this sector's opportunities and threats

both can affect to Nepalese business community base on the findings of this

survey.

46
Above results can be verified pursuing alternative analysis. Following

descriptive analysis of frequency distribution presents label wise response of

the respondents that presents clearer pictures. Following table 6.2 shows the

respondents' label-wise voting and their relative percentage. Percentage

distribution confirms the voting of the respondents in opportunity provided by

liberalization.

Table 6.2: Frequency distribution of impact of Liberalization

Valid Cumulative
Labels Frequency Percent Percent Percent
Strongly disagree 11 1.1 1.1 1.1
Disagree 62 6.4 6.4 7.6
Slightly disagree 80 8.3 8.3 15.9
Slightly agree 215 22.3 22.3 38.1
Agree 397 41.1 41.1 79.3
Strongly agree 200 20.7 20.7 100.0
Total 965 100.0 100.0

Above result showed a clear picture that speaks that 84.1% respondents voted

into positive side and only 15.9% into negative. Around 62% respondents were

found agreed out of them around 21% expressed their strong agreement. In

this situation it can be concluded that Liberalization impact has provided

opportunities to Nepalese businessmen.

Similarly respondents presented their opinion on the opportunity available to

Nepalese businessmen by membership in WTO. Following table 6.3 presents

frequency distribution of six labels. Result will verify the above findings and will

provide the clearer picture for discussion. It will be helpful to find out the

intensity of respondents opinion in the opportunity available to Nepalese

business community by WTO membership.

47
 Table 6.3: Frequency distribution of opportunity of WTO membership

Valid Cumulative
Labels Frequency Percent Percent Percent
Strongly disagree 45 4.7 4.7 4.7
Disagree 96 9.9 9.9 14.6
Slightly disagree 161 16.7 16.7 31.3
Slightly agree 323 33.5 33.5 64.8
Agree 257 26.6 26.6 91.4
Strongly agree 83 8.6 8.6 100.0
Total 965 100.0 100.0

Above table 6.3 presented a clear frequency distribution of response on

opportunity provided by WTO to Nepalese businessmen. More than 64%

responses fall into slightly agree or into the negative labels. More than 31%

voted into the negative side and rest into positive side in WTO as an

opportunity to Nepalese businessmen. In the present case highest frequency

33.5% was found in slightly agree therefore it is clear that the respondents

were found very close to the neutral.

6.3. Nepalese economic business environment

Five items were designed to assess the Nepalese economic business

environment. Altogether 965 respondents took part in the survey and

expressed their opinion in six point Likert type scale. General descriptive such

as mean and their standard deviation are presented in the following table 6.4.

Mean score of the items are presented in descending order so that most

relevant factor in Nepalese economic business environment could be

identified.

48
Table 6.4: General descriptive of Nepalese economic business environment items

Std.
Label N Mean Deviation
1. Govt. Nepal provides adequate subsidy to Businessmen 965 3.1969 1.25594
2. Tax system is very tedious for Nepalese businessmen 965 5.0010 1.06188
3. Purchasing power of customer affects businessmen 965 4.5534 1.03291
4. Nepalese capital market is favorable for businessmen 965 3.4394 1.05929
5. Banking interest rate in lending is satisfactory 965 2.9026 1.07732
Valid N (listwise) 965

Respondents perceived that Nepalese tax system highly affected Nepalese

businessmen. They perceived as one of the major threats in their areas.

Another important issue was found purchasing power of Nepalese customers.

Nepal is a poor country in the world having very low per capita per annum.

The low income and low purchasing power of customer is perceived as one of

the major limitation to Nepalese businessmen for example they may not find

adequate market opportunities for high quality products and luxurious goods.

Respondents were found almost indifferent in capital and government subsidy.

Mean score shows that respondents were neither agree nor disagree in

favorable capital market for Nepalese businessmen. They have were found

slightly disagree in adequacy of the subsidy available to Nepalese

businessmen. Respondents found Nepalese commercial banking lending

interest rate as one of the challenge in Nepalese economic business

environment. Thus, in general respondents identified tax system, customers'

purchasing power, and banking lending rate relatively significant than other

items.

49
 Label wise frequency distribution of all the items used to assess Nepalese

economic business environment might help to further explain the above results

in alternative way. Following table 6.5 presents comparative label wise

distribution that can be the inventory for item wise comparative analysis.

Table 6.5: Frequency of Nepalese economic business environment items (in %)

Gov. Nepal Tax Purchasing Nepalese Banking

provides system is power of capital interest rate
adequate very customer market is in lending is
Label subsidy tedious affects favorable satisfactory
Strongly disagree 9.9 .2 1.2 3.8 9.8
Disagree 21.3 2.8 2.9 17.2 27.2
Slightly disagree 25.7 6.4 9.3 24.2 31.9
Slightly agree 26.8 18.1 27.8 41.6 25.7
Agree 14.4 32.1 43.3 12.2 4.8
Strongly agree 1.8 40.3 15.4 .9 .6
Total 100.0 100.0 100.0 100.0 100.0

Nepalese tax system was found as one of the major influencing factor to the

Nepalese businessmen for which 72.4% respondents voted into agree and

strongly agree in item "tax system is very tedious". Only 11.4% responded into

negative side among six labels designed to assess the respondents' opinion.

More than 58% respondents voted into agree and strongly agree in case of

"Purchasing power of customer affects businessman". Thus, respondents

perceived that tax system and low purchasing power was found as highly

influencing factors among economic business environment items.

Respondents rated commercial banking lending interest rate unfavorable to

Nepalese businessmen. Altogether 68.9% respondents voted into negative

side in the existing system of out of them 37% respondents voted into

disagree or strongly disagree label. It is, therefore, the item was found one of

50
 the highly affecting issue to the Nepalese business community. Rest of the

two other items "Favorable Capital Market" and "Govt. subsidy available to

Nepalese businessmen were found relatively neutral level with high variation

among agree to disagree level thus were found equivocal.

6.4. Nepalese socio cultural business environment

Five items were designed to assess the Nepalese socio-cultural business

environment. Altogether 965 respondents took part in the questionnaire

survey. Their responses were tabulated and analyzed in SPSS 11.5 to find

general descriptive (mean and standard deviation) results of the each item that

are presented in the following table 6.6.

Table 6.6: General descriptive of Nepalese socio-cultural business environment items

Std.
Items or variables N Mean Deviation
1. Businessmen are bearing social responsibility 965 2.9409 1.19718
2. Businessmen are providing product to fulfill customer interest 965 4.2176 1.22063
3. Adoption of western culture brought variety in Nep. business 965 4.4694 1.11122
4. Applied education is lacking for the development of business 965 4.1316 1.15513
5. Demographic issues provided opportunity to businessmen 965 2.8829 1.17714
Valid N (listwise) 965

Respondents perceived that influence of western culture has led the variety in

Nepalese business. Moderate mean near to 4.5 shows that average

respondents were found agree or slightly agree in the statement. Respondents

also accepted the ability of Nepalese businessmen to fulfill interest of the

customers. Their average voting was found near to slightly agree label in case

of lack of applied education among Nepalese businessman. However, average

respondents were found slightly disagree or below in case of two items

51
 businessmen are bearing social responsibility and demographic issues

provided opportunity to businessmen. Label wise frequency distribution

showed in the following table 6.7 provides more comprehensive figures on

opinion of the respondents.

Table 6.7: Frequency of Nepalese socio-cultural business environment items (in %)

Businessmen Businessmen Adoption of Applied Demographic
are bearing are providing western culture education is issues
social customer brought variety lacking for the provided
Label responsibility interest product in business business opportunity
Strongly disagree 12.2 .9 .7 1.2 9.8
Disagree 26.4 10.8 6.1 8.7 27.2
Slightly disagree 26.4 14.7 8.8 14.7 31.9
Slightly agree 26.4 26.0 31.9 39.0 25.7
Agree 6.9 34.3 34.7 23.7 4.8
Strongly agree 1.6 13.3 17.7 12.6 .6
Total 100.0 100.0 100.0 100.0 100.0

Above table clearly shows that western culture has led development and

variety in Nepalese business sector. Out of total 965 respondents more than

half of the respondents were found agree or strongly agree label in the

designed statement. Only 15.6% respondents voted into negative side and

rest all voted into positive.

Very similar to the earlier case majority of the respondents voted into positive

side in case of "businessmen are providing customer interest product". Out of

total responses only 26.4% responses were recorded into negative side in six

point Likert type scale. Similarly 75.3% respondents agreed that applied

education is lacking for the development of Nepalese business where 36.3%

were found in agree or strongly agree label.

52
 Nepalese respondent perceived lack of social responsibility fulfillment by

Nepalese businessmen. In total, 64.9% respondents were found into negative

side of the statement and they denied social responsibility fulfillment of the

responsibility. Respondents didn't accept the statement that demographic

issues provided opportunities to them because 68.9% voted into the negative

side of the scale.

6.5. Nepalese technological business environment

Four items were designed to assess status of Nepalese technological

business environment. General descriptive of the items are presented in the

following table 6.8. Results presented below will help to assess the attitude or

opinion of the respondent so that we can generalize the findings to assess the

Nepalese technological business environment.

Table 6.8: General descriptive of Nepalese technological business environment items

Std.
Items or variables N Mean Deviation
1. Technological development created challenges 965 4.8788 1.25603
2. Technological development created opportunities 965 4.1731 1.16399
3. Businessmen need more capital to adapt developed technology 965 4.2052 1.31910
4. Local business are in crises due to technological advancement 965 3.3979 1.31035
Valid N (listwise) 965

Above table 6.8 shows that respondent perceived technological development

one of the threats to the Nepalese business community. Mean score 4.87

shows that respondents were very close to the agree label in six point Likert

type scale. However, respondents also accepted to some extend technological

advancement as an opportunity but at the same time they expressed high

capital requirement to the business community due to technological

53
 development. Besides this, respondents were found almost neutral in local

business crisis due to technological advancement. Following frequency

distribution table 6.9 helps to understand the nature of technological business

environment items.

Table 6.9: Frequency of Nepalese technological business environment items (in %)

Technological Technological Businessmen need Local businesses
development development more capital to are in crises due
created created adapt developed to technological
Label challenges opportunities technology advancement
Strongly disagree 1.6 2.1 2.3 6.5
Disagree 5.3 8.6 10.5 18.9
Slightly disagree 7.0 13.2 15.0 30.4
Slightly agree 17.2 31.4 27.6 24.7
Agree 27.7 35.6 26.0 11.7
Strongly agree 41.2 9.1 18.7 7.9
Total 100.0 100.0 100.0 100.0

Above table 6.9 clearly presents status of Nepalese technological business

environment. Respondents perceived technological advances one of the major

threats. Out of total 965 respondents 41.2% were found strongly agree on

technology as a threats to their sector and 81.1% respondents voted into the

positive side of the scale. Respondents also perceived technological

development as an emerging opportunity in their sector where 76.1%

respondents voted into positive side and rest into negative side of six point

Likert type scale.

In general 57.8% respondents voted into disagreement side in case of Local

businesses crises due to technological advancement. But 72.3% respondents

voted into positive side incase of the statement "businessmen need more

capital to adapt developed technology" thus it was found one the threats

Nepalese business community.

54
6.6. Nepalese political business environment

Nepalese political business environment is one of the major issues for

Nepalese businessmen in today's context. Earlier analyses found a higher

order factor solution of two related factors labeled as procedure and policy of

the government. Altogether four variables were used in the scale to assess the

political legal business environment. General descriptive of these scales are

presented in the following table

Table 6.10: General descriptive of Nepalese political legal business environment items

Std.
Labels N Mean Deviation
1. Registration of business is very hard 965 3.3461 1.13981
2. One windows policy appeared successful in providing services 965 2.2860 .96573
3. Maoist revolution has adversely affected Nepalese business 965 5.1171 .87364
4. Tax exemption in priority sector increased investment in rural sec. 965 3.2870 1.21004
Valid N (listwise) 965

Above table clearly presents that Nepalese political legal business

environment. Maoist revolution was found as one of the adversely affecting

factors in Nepalese business community. Respondents were also found

disagree in the effectiveness of one windows policy. Nevertheless, average

respondents were found almost indifferent in issues of difficulties in business

registration and investment increment in rural sector due to tax exemption in

priority sector.

55
 Above findings can be verified analyzing label wise frequency distribution of

each item. Only four items were designed in six point Likert type scale. Labels

used in scale were in interval scale starting from strongly-disagree to strongly-

agree label. Following frequency distribution table 6.11 presents clearer

picture of the above findings.

Table 6.11: Frequency of Nepalese political legal business environment items (in %)
Registration of One windows Maoist revolution Tax exemption
business is very policy appeared adversely affected increased rural
Label hard effective business investment
Strongly disagree 1.9 19.8 .2 1.0
Disagree 25.1 46.0 4.6 35.5
Slightly disagree 29.5 22.4 18.0 18.7
Slightly agree 26.6 9.4 37.7 25.9
Agree 13.9 2.4 39.5 16.2
Strongly agree 3.0 0.0 .2 2.7
Total 100.0 100.0 100.0 100.0

Above table showed Maoist revolution and its impact one of the major

challenging force that affects Nepalese business community. Out of total

respondents more than 74% of the respondents vote into the positive side of the

statement. It means respondents accepted that Maoist revolution affected to

Nepalese business community. Similarly 88.2% respondents voted into the

negative side in the statement designed to assess the effectiveness of one

windows policy. However, both of the items about registration of the business

and invest growth in rural sector due to tax exemption were found into the

neural side. More than 44% respondents voted in slightly agree or slightly label

in both of the items.

56
6.7. Generalization of the findings

Investigation was made to find variable wise differences among different

demographic groups such as age, gender, profession, and experience. One-

way analysis of variance tool was used to find the variable-wise group

differences. Out of total respondents 807 male and 158 female took part in

present survey of Nepalese business environment. Percentage of male

consists 83.6 percent and female 16.4. Following table 6.12 shows differences

between these two gender-groups in all the variables used to assess

Nepalese business environment.

Table 6.12: One way ANOVA between gender groups

Variables or Items used in survey F Sig.

Liberalization is favorable for Businessman .718 .397
WTO membership provided opportunity to Business .644 .422
Govt Nepal provides adequate subsidy to Businessmen 2.744 .098
Tax system is very tedious for Nepalese businessmen 1.684 .195
Purchasing power of customer affects businessmen .306 .580
Nepalese capital market is favorable for businessmen 2.331 .127
Banking interest rate in lending is satisfactory .085 .771
Businessmen are bearing social responsibility .071 .790
Businessmen are providing product to fulfill customer interest .108 .742
Adoption of western culture brought variety in Nepalese business .164 .686
Applied education is lacking for the development of business 2.953 .086
Demographic issues provided opportunity to businessmen 2.528 .112
Technological development created challenges 1.705 .192
Technological development created opportunities .301 .583
Businessmen need more capital to adapt developed technology .085 .771
Local business are in crises due to technological advancement .273 .601
Registration of business is very hard .003 .958
One windows policy appeared successful in providing services 2.129 .145
Maoist revolution has adversely affected Nepalese business sec. .558 .455
Tax exemption in priority sector increased investment in rural sec. .386 .534
57
 Analysis of variance could not show significant differences between male and

female group in their response on all variables used to assess the Nepalese

business environment. Result showed relatively low level of F statistics therefore

it was not found significant at 0.01 level of significance. Thus, the findings can be

generalized among all the respondents irrespective to the gender.

Altogether there were six age groups of respondents defined by the researcher.

Five groups were designed in five years differences in between 25 to 50 and rest

two groups were defined for respondents beyond this range. Frequency

distribution shows lowest 70 to highest 246 number of respondents in each group.

Following table 6.13 presents the differential responses between these groups.

Table 6.13: One way ANOVA among age groups

Variables F Sig.

Liberalization is favorable for Businessman .156 .978

WTO membership provided opportunity to Business .875 .497
Govt. Nepal provides adequate subsidy to Businessmen .769 .573
Tax system is very tedious for Nepalese businessmen .695 .627
Purchasing power of customer affects businessmen 2.187 .054
Nepalese capital market is favorable for businessmen 2.453 .032
Banking interest rate in lending is satisfactory 1.454 .203
Businessmen are bearing social responsibility 2.224 .050
Businessmen are providing product to fulfill customer interest 1.991 .078
Adoption of western culture brought variety in Nepalese business 1.773 .116
Applied education is lacking for the development of business 2.864 .014
Demographic issues provided opportunity to businessmen 2.101 .063
Technological development created challenges 2.536 .027
Technological development created opportunities 3.009 .011
Businessmen need more capital to adapt developed technology 5.752 .000
Local business are in crises due to technological advancement 1.188 .313
Registration of business is very hard .780 .565
One windows policy appeared successful in providing services .864 .505
Maoist revolution has adversely affected Nepalese business sec. .944 .452
Tax exemption in priority sector increased investment in rural sec. .371 .868

58
 Above results of ANOVA showed clear pattern of the results. Respondents of

seven age groups in almost all the variables were not found statistically

different in only one exceptional variable related to technological environment.

Therefore, the results can be generalized to all the age groups of respondents.

Profession of the respondents were recorded into four groups namely

Jobholders, entrepreneurs, academicians, and freelancers. There were 240,

361, 150, and 213 respondents from each group respectively. Following

analysis of variance results attempts to investigates if there is any significant

difference among the groups.

Table 6.14: One way ANOVA among four professional groups

Variables or items F Sig.

Liberalization is favorable for Businessman .784 .503
WTO membership provided opportunity to Business 1.284 .279
Govt Nepal provides adequate subsidy to Businessmen 6.865 .000
Tax system is very tedious for Nepalese businessmen 4.382 .005
Purchasing power of customer affects businessmen 1.954 .119
Nepalese capital market is favorable for businessmen 3.035 .028
Banking interest rate in lending is satisfactory 5.879 .001
Businessmen are bearing social responsibility 2.446 .063
Businessmen are providing product to fulfill customer interest 3.572 .014
Adoption of western culture brought variety in Nepalese business 1.758 .154
Applied education is lacking for the development of business 2.489 .059
Demographic issues provided opportunity to businessmen 3.253 .021
Technological development created challenges 3.337 .019
Technological development created opportunities 4.102 .007
Businessmen need more capital to adapt developed technology 1.450 .227
Local business are in crises due to technological advancement 1.773 .151
Registration of business is very hard 2.658 .047
One windows policy appeared successful in providing services 2.933 .033
Maoist revolution has adversely affected Nepalese business sec. 2.042 .106
Tax exemption in priority sector increased investment in rural sec. 1.213 .304

59
In general, above results could not find any significant differences among the

professional groups in most of the variables except some of the variables

designed to assess economic business environment and technological

business environment. Three variables relating to economic environment were

found different among the professional groups and one variable relating to

technological business environment were found statistically different among

four professional groups.

Mean score of jobholders was found relatively lower (Mean=2.93, Average

Mean=3.19) in the statement relating to the subsidy and lowest in mean score

(Mean=4.80, Average Mean=5.00) in the statement relating to tax system

among all the groups.

However in case of banking lending interest rate second group was found the

highest (Mean=3.06, Average mean=2.90) and others were found relatively

equal. In a variable designed on technological advancement and its

opportunities similar pattern was observed where the same group was found

highest (Mean 4.33, Average mean=4.17) among all the groups.

Professional experience of the respondents was recorded in five different

groups. Distribution percentage shows highest of 33.2% to lowest 8.2% of the

respondents in these groups. Present analysis aims to find out the differences

among the five groups if there are any. Following table 6.15 shows results of

one-way ANOVA of among the professional experience groups.

60
Table 6.15: One way ANOVA among professional experience groups

Variable or items F Sig.

Liberalization is favorable for Businessman .658 .622
WTO membership provided opportunity to Business 3.118 .015
Govt. Nepal provides adequate subsidy to Businessmen .804 .523
Tax system is very tedious for Nepalese businessmen .216 .929
Purchasing power of customer affects businessmen 1.103 .354
Nepalese capital market is favorable for businessmen 1.895 .109
Banking interest rate in lending is satisfactory .063 .993
Businessmen are bearing social responsibility 6.020 .000
Businessmen are providing product to fulfill customer interest 3.487 .008
Adoption of western culture brought variety in Nepalese business 1.231 .296
Applied education is lacking for the development of business 2.819 .024
Demographic issues provided opportunity to businessmen 4.283 .002
Technological development created challenges 5.309 .000
Technological development created opportunities .771 .544
Businessmen need more capital to adapt developed technology 5.346 .000
Local business are in crises due to technological advancement 1.845 .118
Registration of business is very hard 1.477 .207
One windows policy appeared successful in providing services .958 .430
Maoist revolution has adversely affected Nepalese business sec. .883 .473
Tax exemption in priority sector increased investment in rural sec. .673 .611

Most of the variables were not statistically significant difference among the five-

groups. However, some of the variables were found significantly different

among the groups. These observed differences are to be discussed. As

presented in the above table single item variable "businessmen are bearing

social responsibility" were found statistically different among the groups.

General descriptive showed almost equal mean in all the groups in between

2.71 to 2.88 except the slightly high mean 3.20 in case of only one group

having 6 to 10 years professional experience. Thus, the observed statistically

61
significant difference was just due to an extra ordinary mean in a group.

Similarly, statistically significant different was observed

Furthermore, statically significant difference was observed in one item variable

"businessmen are providing product to fulfill customer interest". Descriptive

statistics showed very similar mean in all the groups within 4.15 to 4.38 range

but one exceptionally low 3.88 mean score in a single group with experience of

16 to 20 years group. Similarly, next difference was observed in one item

variable "demographic issues provided opportunity to businessmen". Mean

score of age group having 16 to 20 years was found significantly lower (2.48)

than the rest of the groups mean score (2.73 to2.98).

Very similar situation was found in two other technological environment

variables "Technological development created challenges" and "Businessmen

need more capital to adapt developed technology". Descriptive variables shows

that mean score of second group scored significantly higher than other groups

mean score. In variable designed to assess challenges of technology the mean

was found 5.0377 where the average mean of five groups was found only

4.8758 with lowest mean score of 4.59.

Same pattern was found in variable designed to assess capital investment

requirement in technological advancement. The same second group had the

highest mean (4.49) among the five groups. The average mean-score of all the

groups was found only 4.21 and lowest mean 3.73. However, two groups had

relatively lower mean score in case of this variable.

Above results showed that were some minor professional group wise

differences among in few variables designed to assess Nepalese business

62
 environment. Out of four to five variables designed to assess each components

of business environment only one or two items were found different among the

groups. The mean score in case of difference was found difference in one

group than in all others, thus, the differences in some cases were not found

significantly different.

Nevertheless, the mean differences among the groups couldn't present a single

pattern but appeared as a random difference. In the above findings, F statistics

was found relatively low (below 3.0) in most of the cases but the statistical

difference was observed in case of F statistics observed above 3.00. However,

the highest F statistics observed in the above results were found only around

6.00 or below. Most of the variables were not found significantly different

among the groups analyzed using one-way analysis of variance. Therefore, in

case of few differences observed without any pattern might be just due to

random error or any measurement system, thus, might not represent the real

differences. Hence, the result of one-way ANOVA shows that the findings can

be generalized to all the groups equally.

6.8. Comparative status of Nepalese general business environment components

Out of twenty items seven items were in negative form therefore they were

reversibly coded to design a variable for each component. Mean was calculated

from all the related items of the each component to design single variables of

each component. Mean and standard deviation score of two items of global

business environment, five items of economic environment, five items of socio-

cultural business environment, four items of technological environment, and four

items of political legal environment were calculated to find following five variables

63
 relating to five business environment components presented in the following

table 6.16.

Table 6.16: General Descriptive of five business environment components

Std.
Business Environment Components N Mean Deviation
1. Global Business Environment 965 4.2565 1.08664
2. Economic Business Environment 965 3.2182 .56978
3. Socio-cultural Business environment 965 3.4759 .56286
4. Technological Business Environment 965 3.1728 .65573
5. Political Legal Business Environment 965 2.7005 .79731
Valid N (listwise) 965
Note: Data generated in Likert type scale anchored by 1=Strongly Disagree to 6=Strongly Agree

Above table shows status of global business environment relatively favorable but

socio-cultural environment appeared relatively neutral. Both business

environment components especially economic and technological business

environment components were found relatively poor. Besides, Nepalese political

legal environment was found poorest among all the business environment

components.

Above descriptive statistics shows the mean and standard deviation scores of

five business environment components Therefore, the mean differences among

the components are to be statistically tested. One sample test is used to test

how different these mean scores are from the central point (3.5) of six point

Likert type scales that can be a basis of comparison among the business

environment components. Relatively high T statistics and low level of

significance indicates the differences of variables from the central point.

Following table 6.17 shows the T statistics and level of significance.

64
 Table 6.17: General Descriptive of five business environment components
Business Environment Test value 3.5 95% Conf. Interval
Components Sig. Mean
t df (2-tailed) Difference Lower Upper
1. Global Business Environment 21.626 964 .000 .7565 .6878 .8251
2. Economic Business Environment -15.362 964 .000 -.2818 -.3178 -.2458
3. Socio-cultural Business environment -1.333 964 .183 -.0241 -.0597 .0114
4. Technological Business Environment -15.501 964 .000 -.3272 -.3686 -.2858
5. Political Legal Business Environment -31.149 964 .000 -.7995 -.8499 -.7491

Above table shows that only global business environment was found relatively

favorable. However, the mean score of 4.25 represents that the respondents

rating was not very high but quite close to slightly agree label. Test statistics

showed that socio-cultural business environment was not significant different

from the test value 3.5 that means value is near the neutral position. Economic

and technological business environment components were found relatively

unfavorable. But political business environment was found least favorable

among five business environmental factors. Result showed relatively high T

statistics in all business environment components and significant at <0.01 level

of significance except socio-cultural business environment.

6.9. Opportunities and Threats in Nepalese general business environment

Above analysis showed the status of Nepalese business environment. Base on

the above findings opportunities and threats were identified for each sector.

Three types of signs are used in the following table to denote environmental

threats and opportunities. It is very similar to ETOP (environmental threats and

opportunities profile, Jaunch & Glueck, 1989). However, it is not directly related

to certain business firm or any industry, it is presents opportunity and threats to

general Nepalese business community.

65
Figure 6.1: Environmental Opportunities and threats to Nepalese business sector

S.N. Environmental Factor Denotation Statement (OT)

01 Global business environment + Minimum level of opportunity (O)

02 Economic business environment - Minimum level of threat (T)

03 Socio-cultural business environment 0 Neither opportunity nor threat

04 Technological business environment - Minimum level of threat (T)

05 Political-legal business environment - - Challenging threat (T)

+ = minimum opportunity, - = minimum threat, 0 = neutral, - - = challenging threat

Above table clearly shows opportunity and threat available to Nepalese

business community. In general, global business environment was found having

some opportunity. Both socio-cultural and technological business environment

components presented mild threats to the business community. But political

business environment was found as a challenging threat to the Nepalese

business community.

66
 CHAPTER- 7: FINDINGS, CONCLUSIONS, AND IMPLICATIONS

7.1. Background

This is the final chapter of present research report. It summarizes major

findings of research where researcher attempts to draw conclusion and

present some future implication of the research findings. In general, present

research was found highly successful and contributed significantly in a

business management research. Findings were found theoretically consistent,

practically very important, and statistically significant.

7.2. Major findings

Present research found four factorial general business environment

components congruent to the contents collected from Nepalese respondents

in content analysis. Most of the respondents selected from Nepalese business

enterprises have expressed many similar ideas with theory of general and

industry level business environment in their interview.

In preliminary survey respondents rated political environment as one of the

most influencing factor in their business. Nevertheless Nepalese economic

environment was also found very important to Nepalese business community.

It was also found that general environment is also to some extent industry

specific as found in a small sample of preliminary survey. Furthermore,

competition or competitor was found the most relevant task level business

environment force. These preliminary surveys and content analysis helped to

design the statement for the questionnaire design.

67
 Scales designed in the questionnaire were found reliable and valid in analysis.

Exploratory factor analysis showed major four factors along with an extra

international business environment factor. Confirmatory factor analysis proved

satisfactory model fit of uncorrelated five-factor solution of Nepalese general

business environment in the present data structure. Therefore, present survey

design was found very successful to distinguish five factors successfully.

Nepalese general business environment was investigated using general

descriptive such as mean, standard deviation, and descriptive. General finding

showed relatively poor Nepalese business environment in the earlier analysis.

Furthermore, one-way ANOVA showed only some random differences among

different demographic groups and proved much similarity among the

respondents' opinion.

7.3. Conclusion

Present research is one of the first kinds of research in Nepalese field.

Research followed scientific process and used different scientific tools and

techniques. Much effort was made in interviewing with around thirty executives

in four stages in preliminary studies and content analysis. Such primary

studies paved a journey for the scientific investigation of dimensionality of

general business environment in Nepalese context.

Survey design appeared very successful research attempt based on the

findings of the study. Items were carefully designed in a structured

questionnaire that was administered among 965 respondents. Four general

environment components were successfully distinguished along with one

international business environmental environment component. Confirmatory

68
 factor analysis showed satisfactory model fit of these components. In general,

present research was found success to develop a scientific instrument to

assess general business environment in Nepalese context.

Collected responses were also analyzed to assess the existing situation of

Nepalese business environment that showed a realistic picture. Findings

showed that Nepalese business environment is not conductive and favorable

to the Nepalese business community. Findings showed similarities of

responses among different demographic group, therefore, the findings of the

study could be generalized among the respondents.

7.4. Implication

Present research is a very important breakthrough in the assessment of

Nepalese general business environment. It has designed very useful scientific

instrument that can be used to assess the Nepalese business in future.

Furthermore, present research can be a milestone for other scientific works

and advance research activities. Thus, the research findings can be very

important for Nepalese academicians and researchers to understand and

interpret Nepalese business environment.

Findings of the present research can be very important for the policy makers.

Nepal has to enter into new era of international business within few years. It is

going to be an active member of WTO very soon. Therefore, many aspects of

the Nepalese business environment are to be repaired to empower the

Nepalese business community. Besides, foreign investors can get ideas on

Nepalese business environment form present findings that helps to decide

whether opportunities and threats are. For example, political business

69
environment might be a threat to them but technological, socio-cultural, and

economic environment might be an opportunity for the foreign investors.

In general, research findings are very important for academicians, researchers,

business peoples, policy makers, and foreign investors. Nevertheless, there

are some limitations of this research. It is totally based in opinion survey. It

would be better if it could integrate secondary data analysis relating to the

Nepalese business environment components. Further, the study is base on

conveniently collected sample with the questionnaire designed by the

researcher. It would be better if many items should be administered to the

respondents and only highly loaded item in factor analysis would be included

into the scale. However, findings showed very good model fit in confirmatory

factor analysis, highly reliable scales, and high factor loading in items of each

scale.

70
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72
ANNEX-1: QUESTIONNAIRE USED FOR INTERVIEW (NEPALI VERSION)

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73
 ANNEX-2: QUESTIONNAIRE USED FOR INTERVIEW (ENGLISH VERSION)

First of all, I would like to ask you some general and comprehensive questions.

What kind of business environment you found to do business in Nepal?

What are major areas that you categorize in Nepalese business environment?

What are most important factors that affect business environment out of them?

Now, I would like to ask you some specific questions relating to your area.

What kind of business environment is there in your sector?

What are the most important factors out of them? Please state them
accordingly.

Lastly, what is your opinion in the following questions?

Which factors are more important for a business National economy, social
context, political environment, and science & technology?

Which stakeholder is most influencing to the organization out of competitor,

customer, media, pressure group, social organization, and political parties?
How?

74
 ANNEX-3: QUESTIONNAIRE USED FOR SURVEY
(NEPALI VERSION)
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75
 ANNEX-4: QUESTIONNAIRE USED FOR SURVEY
(ENGLISH VERSION)

Dear respected participants,

What kind of business environment is there in Nepal? What are the most challenging
factors to businesses? Further, the objective of the following questionnaire is to
search the environmental factors related to your areas as well. Thus, your each
opinion will be very important in this endeavor. Therefore we are hopeful that you will
circle at the appropriate option understanding the real meaning of the statement.
Responses collected from you will be anonymous and only the general findings will
be analyzed and reported.

Moderately Disagree
Strongly Disagree

Slightly Disagree
Slightly Agree
Moderately Agree
Strongly Agree
Please, read each statement and circle at the
appropriate given alternative number that
comes close to your opinion

1 Present liberalization is favorable for Nepalese businessmen 1 2 3 4 5 6

2 Nepal's WTO membership provided opportunity to businessmen 1 2 3 4 5 6
3 Govt. subsidy & support provided to businessmen is not enough 1 2 3 4 5 6
4 Nepalese tax administration is tedious for businessmen 1 2 3 4 5 6
5 Consumers purchasing power is affecting businessmen 1 2 3 4 5 6
6 Capital market is favorable for Nepalese businessmen 1 2 3 4 5 6
7 Bank interest rate is favorable for Nepalese businessmen 1 2 3 4 5 6
8 Nepalese businessmen are fulfilling their social responsibility 1 2 3 4 5 6
9 Nepalese businesses are providing goods as per consumers' need 1 2 3 4 5 6
10 Copy of western culture made Nepalese market diversified 1 2 3 4 5 6
11 Lack of business education affected business development 1 2 3 4 5 6
12 Existing population growth, migrations, and urbanization created 1 2 3 4 5 6
opportunity to Nepalese businessman.
13 Change in technology created challenge to Nepalese businessmen 1 2 3 4 5 6
14 Technology change provided opportunity to Nepalese businesses 1 2 3 4 5 6
15 Businesses need more investment for new technology 1 2 3 4 5 6
16 New technology has made cottage and rural business difficult 1 2 3 4 5 6
17 It is east to register and get permission for business sectors 1 2 3 4 5 6
18 One window policy for supporting business sector is successful 1 2 3 4 5 6
19 Maoist revolution adversely affected Nepalese business sector 1 2 3 4 5 6
20 Govt. priority and tax facility helped to foster the industries and 1 2 3 4 5 6
businesses in rural areas
Personal Detail
1. Gender: Female/Male 2. Major Profession
3. Position or Responsibility: 4. Professional experience (in year) 5. Age (in year)

76