PEPARED BY, Jeevitha R lecturer Rajeev Institute of Technology Hassan

Business

Business
Business is the organized efforts of enterprises to supply consumer with goods and services for a profit Business refer to any commercial activity which is aimed at making profit These two definitions make a fundamental assumption that profit maximization is the basic objective of every firm .

 Business , in brief, includes activities connected with production, trade, transport, finance, banking, insurance, advertising and certain other activities related to industry.

Characteristics of Modern Business

GOVT. INTERFERENCE

CHANGE

BIGNESS

COMPETITION

BUSINESS

DIVERSIFICATION

INFORMATION

SCIENCE

GLOBALISATION

Objectives of Business
1. Organic Objectives Just like human being business is an organic entity. It has its own introduction, growth, maturity and declining stages. The organic objectives of a business firm are * Survival * Growth * Prestige or Reputation

2. Economic Objectives Profit making Creation of customers Innovation 3. Human Objectives The success of any business is depends on its human resources. It is necessary for business to look after the interest of those who make business successful. Human objectives include* Providing job satisfaction * Providing opportunity for workers participation in management. * Providing good working condition * Providing fair wages

Social Objectives Business is a social institution and it is a part of the society. Each and every business has its obligation towards customers, investors, supplies, govt. and general public. The social objectives of business are * Quality goods at fair prices * Providing employment opportunities *avoiding anti-social practices

National Objectives In India business organizations have to fulfill the following obligation* Contributing to economic growth of the country. * Development of small scale and cottage industries. * Export promotion. * Ensuring social justice. * Production according to national priorities.

s Business Environment
Business environment consists of all those factors that have a bearing on the business

INTERNAL ENVIRONMENT

MICRO
BUSINESS
EXTERNAL ENVRONMENT

MACRO
BUSINESS ENVIRONMENT

Business Environment

Internal Environment
These are controllable factors. Lies inside the organization Under the control of the organization. Internal environment factors can divided as follows Value System Mission and Objectives Organizational Structure Human Resources Company Reputation Financial Factors

External Environment
Classified into two categories viz. 1. Micro Environment 2. Macro Environment

Micro Environment
The micro environment is a companys immediate environment and that affect the companys ability to produce goods and services and serve consumers. Known as task environment or operating environment Include suppliers, marketing intermediaries, competitors, customers and the publics.

Suppliers Customers Competitors Marketing Intermediaries Publics

Macro Environment
These factors are external to the firm and are quite uncontrollable The growth and survival of business depend upon its adaptability to macro environment factors. The macro environment generally consists of two factors viz.. 1. Economic environment 2. Non-economic environment

Economic Environment
Those Economic factors which have their affect on the working of the business is known as economic environment. It includes system, policies and nature of an economy, trade cycles, economic resources, level of income, distribution of income and wealth etc. Favorable monetary policies like credit sanction, interest rate influence the business unit. The fiscal policy of the govt. like tax policy has its influence on the pattern of business

 Elements of Economic Environment:- It has mainly five main components:1. Economic Conditions 2. Economic System 3. Economic Policies 4. International Economic Environment 5. Economic Legislations For example: A restrictive import policy, or a policy of protecting the home industries, may greatly help the import-competing industries, while a liberalization of the import policy may create difficulties for such industries.

. Non-Economic Environment
Non-economic factors consists of following factors a) Political Environment The nature of policies and the type of the govt. in economy have considerable influence over the business environment. The business activities flourish when there is a stable govt. in the economy on the other hand if the Govt. is unstable and doubtful, it will demoralize the business and may adversely effect on its performance. Certain changes in the Govt. policies like industrial policy, fiscal policy may have profound impact on business

bb) Education and Cultural Environment The attitude towards education and training helps business and industry to avail services of efficient, trained and labor. The cultural factors like buying and consumption habit of the people, customs and traditions, tastes and preferences, languages etc. are the factors that affect the strategy of the business. c) Legal Environment The vital aspect like of business like who should own? What should be the size of business? And what should be happen to the earnings? Can be decided by legal rules and regulations.

 There are number of legislations formed by the Govt. to regulate the business. It is said that the stable Govt will protect the business by formulating effective legislation . d) Natural Environment The natural factors like weather climate, availability of land, forest resources etc. have influence on the business activities. It is stated that difference in geographical conditions may call for changes in production, marketing activities in the economy. The ecological factors like depletion of natural resources, environmental pollution have cost greater concern to the business field, so that preservation of physical environment is becoming important factor of management of modern business.

e) Demography Study of the population in terms of age, sex, size of the population, family size, and occupation is known as demography. Rapidly increasing population indicates a growing demand for many products. Increasing population also indicates that availability of surplus labor which affects the wage rates.

f) F)Technological Environment l Environment. Technology is a systematic application of scientific knowledge to practical task. The business prospects largely depend upon the technological aspects in connection with production and marketing of products. The changes in technology also create problem for business enterprises as they are subject to obsolescence quickly G) International Environment It refers to those global factors which have impact on business and economy. It is important for industries which are directly depending on imports and exports. Export market enables a firm to develop more profitable product mix

Environmental Scanning
The term Environmental Scanning in business Carefully analyze the various factors influencing the business. Environmental Scanning is not once and for all, rather it is continuous process. As the business environment is continuously changing, management has to continuously analyze and diagnose the environment. It is a process by which the organizations monitor their relevant environment to identify opportunities and threats affecting their business.

Nature of Environmental Scanning

Continuous process Exploratory process Holistic exercise

Scope of environmental scanning

The scope of environmental scanning is concerned with the type of information scanned in response to environmental change or factors. Purpose of scanning the environment. The task of the environment and the general environment.