BUSINESS AND ENVIRONMENT

“Business refers to a form of activity conducted with an

objective of earning profit for the benefit of those on whose
behalf the activity is conducted.”
- Dicksee
OBJECTIVES OF BUSINESS
 FUNCTIONS OF BUSINESS
▪ Acquisition of Raw Materials
▪ Production
▪ Marketing
▪ Management of Resources
▪ Management of Finance
▪ Book keeping and Accounting
▪ Management of Human Resources
▪ Management of Information
▪ Management of Changes
▪ Research and Development
 SCOPE OF BUSINESS

INDUSTRY COMMERCE

Extractive
Trade Aids to Trade
Genetic
Transportation
Construction
Internal External Insurance

Manufacturing Warehousing

Service Wholesale Import Banking

Retail Export Advertising

 SIGNIFICANCE OF BUSINESS

▪ Better Standard of Living

▪ Effective utilization of resources

▪ Large variety of goods and services

▪ Creates utilities

▪ Employment opportunities
 ROLE OF BUSINESS IN ECONOMIC DEVELOPMENT

▪ Increases GDP

▪ Generation of Income

▪ Self Employment

▪ Creation of jobs

▪ Payment of taxes

▪ Creation of utility and economic value

▪ Utilization of natural resources

▪ Manpower development
 FORMS OF BUSINESS ORGANIZATIONS

SOLE PROPRIETORSHIP JOINT HINDU FAMILY PARTNERSHIP

JOINT STOCK COMPANY CO-OPERATIVE SOCIETY

 SOLE PROPRIETORSHIP
▪ Single Man Ownership
▪ Unlimited Liability
▪ No separation
▪ Ownership and Management are same
▪ Profits and Losses
▪ Simple Formalities

HINDU UNDIVIDED FAMILY

▪ Single Roof
▪ Common Pool of Property
▪ Not compulsory to register HUF
▪ Decisions taken by Male Head KARTA
▪ Liability of Karta is unlimited
▪ Under the purview of the Hindu Act
 PARTNERSHIP
▪ Agreement
▪ Membership
▪ Unlimited Liability
▪ Collective Management
▪ Profit Sharing

GENERAL PARTNERSHIP

LIMITED PARTNERSHIP

LIMITED LIABILITY PARTNERSHIP

 JOINT STOCK COMPANY
▪ Incorporated Association
▪ Membership
▪ Artificial Legal Person
▪ Separate Legal entity
▪ Continuous Existence
▪ Common Seal
▪ Transferability of Shares
▪ Limited Liability

INCORPORATION LIABILITY MEMBERS OWNERSHIP

Chartered Limited Private Limited Government
Statutory Unlimited Public Limited Non Government
Registered Limited by
Guarantee
 CO-OPERATIVE SOCIETY
▪ Easy Formation
▪ Limited Liability
▪ Perpetual Existence
▪ Social Service
▪ Open Membership
▪ Tax Benefits
▪ Government Aids
▪ Democratic Management

Consumers’ Co-operative Societies Producers’ Co-operative Societies

Marketing Co-operatives Housing Co-operatives

Co-operative Credit Societies Co-operative Farming Societies

PUBLIC SECTOR ENTERPRISES

NON-PROFIT ENTERPRISES
STAKEHOLDERS OF BUSINESS
INTERNAL STAKEHOLDERS
 EXTERNAL STAKEHOLDERS

SHAREHOLDERS CUSTOMERS CREDITORS

SUPPLIERS GOVERNMENT SOCIETY

 BUSINESS ENVIRONMENT
“Total of all things external to firms and industries, which
affect their organization and operation.”
- Bayard O Wheeler

▪ Totality of External forces

▪ Specific and General Forces
▪ Interrelated
▪ Dynamic
▪ Uncertainty
▪ Complexity
▪ Relativity

Exchange of Information Exchange of Resources

Exchange of Influence and Power
TYPES OF BUSINESS ENVIRONMENT

INTERNAL EXTERNAL
Corporate
Values https://www.tata.com/about-us/tata-values-
MICRO MACRO
purpose#:~:text=We%20will%20be%20bold%20and,insight%20to%20develop%20innovative%20solutions.&t

Mission, Vision .&

ext=We%20will%20invest%20in%20our,on%20trust%20and%20mutual%20respect

Suppliers Social
Goals https://rajagiri.edu/about-vision-

Creditors Legal
mission

Organisational
Structure Competitors h
ttps://www.youtube.com/watch?v=iD9XNUY
Economic
HCNQ

Human Political
Resources Customers
(& consumers) Technological
Financial
Factors Public Ecological
https://sdgs.un.org/goals
ORGANISATIONAL STRUCTURE
 BUSINESS ENVIRONMENT ANALYSIS
▪ Identification of Strength
▪ Identification of Weakness
▪ Identification of Business Opportunities
▪ Understanding Threats and Challenges
▪ Managing Changes
▪ Improving Performance
▪ Inputs to Decision Making

MODELS
PEST Analysis Value Chain Analysis
SWOT Analysis TOWS Matrix
BCG Matrix
GLOBAL BUSINESS ENVIRONMENT
▪ Economic System

▪ Political System

▪ Social System

▪ Technological Advancements

▪ Intense Competition