BASIC NOTES DIMENSIONS OF THE BUSINESS ENVIRONMENT

BASIC NOTES DIMENSIONS OF THE BUSINESS ENVIRONMENT

Here, we are trying to provide you some information about basic notes for business studies, business studies tutorials, CBSE business studies notes for class 11 class 12 BBA MBA BCA MCA B.com M.com BMS MMS PGDM Entrepreneur other further management classes.

Today, we are going to provide a business environment in management notes CBSE study material for commerce students to become great and better managers in any organization. Previously, we studied BASIC NOTES NATURE SIGNIFICANCE OF MANAGEMENT BUSINESS STUDIESBASIC NOTES CHARACTERISTICS OF MANAGEMENT BUSINESS STUDIESBASIC NOTES CONCEPTS OF MANAGEMENT BUSINESS STUDIESBASIC NOTES OBJECTIVES OF MANAGEMENT BUSINESS STUDIESBASIC NOTES FEATURES NATURE OF MANAGEMENT BUSINESS STUDIESBASIC NOTES IMPORTANCE OF MANAGEMENT BUSINESS STUDIESBASIC NOTES LEVELS OF MANAGEMENT BUSINESS STUDIESBASIC NOTES SIGNIFICANCE PRINCIPLES OF MANAGEMENT BUSINESS STUDIESBASIC NOTES TAYLOR SCIENTIFIC MANAGEMENT for BUSINESS STUDIESBASIC NOTES PRINCIPLES OF SCIENTIFIC MANAGEMENTBASIC NOTES TECHNIQUES OF SCIENTIFIC MANAGEMENT, BASIC NOTES FAYOL PRINCIPLES OF MANAGEMENT, BASIC NOTES INTRODUCTION OF BUSINESS ENVIRONMENT, BASIC NOTES FEATURES THE NATURE OF THE BUSINESS ENVIRONMENT, BASIC NOTES IMPORTANCE OF THE BUSINESS ENVIRONMENT, BASIC NOTES DIMENSIONS OF THE BUSINESS ENVIRONMENT

BASIC NOTES DIMENSIONS OF THE BUSINESS ENVIRONMENT
BASIC NOTES DIMENSIONS OF THE BUSINESS ENVIRONMENT

Dimensions of, or the factors developing the business environment include economic, social, technological, political, and legal conditions which are considered relevant for decision-making and improving the performance of an enterprise. In contrast to the particular environment, these circumstances describe the general environment which mostly affects many enterprises at an equal time. However, the management of every enterprise can benefit from being aware of these dimensions instead of being disinterested in them. For example, scientific research has found a technology that performs it possible to create an energy-efficient light bulb that lasts at least twenty times as high as a conventional bulb. Senior managers in the lighting divisions at General Electric and Phillips recognized that this discovery had the potential to significantly affect their unit growth and profitability, so, they have exactly observed the progress on this research and profitably used its conclusions.

Dimensions of business environment mean all the factors, forces, and institutions that have direct or indirect influence over the business transactions. General Environment is the most important dimension of the business environment as businessmen cannot influence or change the components of the general environment; rather he has to change his plans and policies according to the changes taking place in the general environment.

Major Components of General Environment are:

Economic Environment: 

Interest rates, inflation rates, changes in disposable income of people, stock market indices, and the value of the rupee are some of the economic factors that can affect management practices in a business enterprise. Short and long-term interest rates significantly affect the demand for products and services. 

Similarly, a rise in the disposable income of people due to an increase in the gross domestic product of a country creates an increasing demand for products. High inflation rates generally rise in constraints on business enterprises as they increase the different costs of business such as the purchase of raw materials or machinery and payment of wages and salaries to employees. 

We can say in the other words, the economic environment consists of Gross Domestic Product, Income level at national level and per capita level, Profit earning rate, Productivity and Employment rate, Industrial, the monetary and fiscal policy of the government, etc.

The economic environment factors have an immediate and direct impact on the businessman so businessmen must scan the economic environment and take timely actions to deal with these environments. The economic environment may put constraints and may offer opportunities to the businessman. After the new economic policy of 1991, a lot of opportunities are offered to businessmen. The common factors which have changed the Indian economic environment are:

  • Banking sector improvement has led to many engaging schemes of deposits and lending money. The Banks are offering loans at a very nominal rate of interest and with minimum formalities to be completed.
  • Recent changes in the economic and fiscal policy of the country have encouraged NRIs and foreign investors to invest in Indian companies.
  • Lots of economic improvements are taking place in leasing and financing institutions. The private sector is allowed to enter financial institutions as a result, customers are gaining.

Some Aspects of Economic Environment:

  1. Role of Private and Public sector
  2. Rate of growth of GDP, GNP, Per Capita Income
  3. Rate of Saving and Investment
  4. Balance of Trade
  5. Balance of Payment
  6. Transport and Communication System
  7. Money Supply in the Economy
  8. International Debt

Social Environment: 

The social environment of business involves social forces like customs and traditions, values, social trends, society’s expectations from business, etc. Traditions define social practices that have lasted for decades or even eras. For example, the festival of Diwali, Id, Christmas, and Guru Parv in India presents great financial opportunities for greetings card companies, sweets or confectionery manufacturers, tailoring outlets, and many other similar businesses. Values refer to concepts that a society holds in high appreciation. In India, own freedom, social justice, equality of chance and national alliance are examples of major values admired by all of us. In business terms, these values translate into the freedom of choice in the market, business’s responsibility towards society, and non-discriminatory employment practices. Social trends contribute to various opportunities and threats to business companies.

In a different way the meaning of social Environment, the rules, and traditions of the society in which business is alive. It involves the standard of living, taste, preferences, and education level of the people living in the society where the business lives. The businessman cannot view the parts of the social environment as these parts may not have an immediate impact on the business but in the long run, the social environment has a great impact on the business.

In India also, there are many social reforms taking place and, the common factors of India Social Environment are:

  • Demand for hiring in jobs for minorities and women.
  • Demand for the same status of women by giving equal salaries for male and female workers.
  • Demand for automatic machines and luxury things in middle-class families.
  • The social moves to improve the education level of a girl child.
  • Health and Fitness trend has become popular.

Some Aspects of Social Environment:

  1. Quality of life.
  2. Value or place of women in the workforce.
  3. Birth and Death rates.
  4. Position of customers towards innovation, lifestyle, etc.
  5. Education and literacy rates.
  6. Consumption habits.
  7. Population.
  8. Tradition, customs, and habits of people.

Political Environment: 

The political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives to hold towards business. The importance of political circumstances in business success lies in the predictability of business activities under stable political circumstances. On the other hand, there may be uncertainty about business activities due to political unrest and threats to law and order. Political stability, thus, builds up confidence among business people to invest in long-term projects for the growth of the economy. Political instability can shake that confidence. Similarly, the attitudes of government officials towards business may have either a positive or negative impact on business.

The political environment constitutes all the factors related to government affairs such as the type of government in power, the attitude of the government towards different groups of societies, policy changes implemented by different governments, etc. The political environment has an immediate and great impact on business transactions so businessmen must scan this environment very carefully. The businessman has to make changes in his organization according to the changing factor of the political environment.

The basic factors and forces which have affected the Indian political environment are:

  • Hyderabad government is taking a keen interest in boosting the IT industry.
  • After the economic policy of liberalization and globalization, the foreign companies got easy entry into India.

Some Aspects of Political Environment:

  1. Present political system
  2. Constitution of the country
  3. Profile of political leaders
  4. Government intervention in business
  5. Foreign policy of the government
  6. Values and ideology of political Parties

Legal Environment: 

The legal environment includes various legislations passed by the Government deciding orders issued by government authorities, court decisions as well as the decisions rendered by various commissions and agencies at all the levels of the government towns, states, or locals. The management of every enterprise must obey the law of the land. Accordingly, an adequate knowledge of rules and regulations framed by the Government is a prerequisite for better business performance.

Non-compliance with laws can land the business enterprise into legal problems. In India, working knowledge of Companies Act 1956: Industries (Development and Regulations) Act 1951; Foreign Exchange Management Act and the Imports and Exports (Control) Act 1947; Factories Act, 1948; Trade Union Act; 1926; Workmen’s Compensation Act, 1923; Industrial Disputes Act, 1947. Consumer Protection Act, 1986, Competition Act, 2002, and host of such other legal enactments as amended from time to time by the Parliament, is important for doing business. The impact of the legal environment can be illustrated with the help of government regulations to protect consumer’s interests.

The legal environment creates the laws and various legislations passed in the parliament. The businessman can’t view the law because he has to make his business actions within the structure of the legal environment. The common law passed which has influenced the business transactions are Trade Mark Act, Essential Commodity Act, Weights and Measures Act, etc. Most of the time, the legal environment puts constraints on the businessman still sometimes they provide opportunities also.

The common instances of the Indian legal environment which have influenced business transactions recently are:

  • Deregulation of the capital market has made it easy for businessmen to collect capital from the primary market.
  • Removal of control from the foreign exchange and liberalization in investment is encouraging foreign investors and NRIs to invest in the Indian capital market.
  • Advertisement of alcoholic products is prohibited.
  • Compulsory to give statutory warning in Tobacco production.
  • Delicensing policy of industries.

Some Aspects of Legal Environment:

  1. Various laws and legislative acts
  2. Legal policies related to licensing
  3. Legal policies related to foreign trade
  4. Statutory warnings are essential to be printed on labels
  5. Foreign Exchange Regulation and Management Act
  6. Laws to keep a check on Ads

Technological Environment: 

The technological environment includes forces relating to scientific developments and modifications which present new ways of producing goods and services and new methods and procedures of working in the business.

Technological environment refers to changes taking place in the method of production, use of new equipment and machinery to improve the quality of the product. The businessman must closely observe the technological changes taking place in his industry because he will have to implement these changes to remain in the ambitious market. Technological innovations always bring quality improvement and more benefits for customers.

The modern technological changes of the Indian market are:

  • Digital watches have destroyed the views and the business of old watches.
  • Color television technology has closed the business of black and white television.
  • The artificial material has taken the market of old cotton and silk cloths.
  • Photocopier and xerox instruments have led to the end of the carbon paper business
  • The shift in Demand from vacuum tubes to transistors.
  • The shift from steam engines its diesel and electric engine.
  • From typewriter to World Processors.

Some Aspects of Technological Environment:

  1. Various Innovations and Inventions.
  2. Scientific Improvements,
  3. Developments in the IT sector
  4. Import and Export of Technology.
  5. Technological Advances in Computers.

Here, we are trying to provide you some information about basic notes for business studies, business studies tutorials, CBSE business studies notes for class 11 class 12 BBA MBA BCA MCA B.com M.com BMS MMS PGDM Entrepreneur other further management classes.

Today, we are going to provide a business environment in management notes CBSE study material for commerce students to become great and better managers in any organization. Previously, we studied BASIC NOTES NATURE SIGNIFICANCE OF MANAGEMENT BUSINESS STUDIESBASIC NOTES CHARACTERISTICS OF MANAGEMENT BUSINESS STUDIESBASIC NOTES CONCEPTS OF MANAGEMENT BUSINESS STUDIESBASIC NOTES OBJECTIVES OF MANAGEMENT BUSINESS STUDIESBASIC NOTES FEATURES NATURE OF MANAGEMENT BUSINESS STUDIESBASIC NOTES IMPORTANCE OF MANAGEMENT BUSINESS STUDIESBASIC NOTES LEVELS OF MANAGEMENT BUSINESS STUDIESBASIC NOTES SIGNIFICANCE PRINCIPLES OF MANAGEMENT BUSINESS STUDIESBASIC NOTES TAYLOR SCIENTIFIC MANAGEMENT for BUSINESS STUDIESBASIC NOTES PRINCIPLES OF SCIENTIFIC MANAGEMENTBASIC NOTES TECHNIQUES OF SCIENTIFIC MANAGEMENT, BASIC NOTES FAYOL PRINCIPLES OF MANAGEMENT, BASIC NOTES INTRODUCTION OF BUSINESS ENVIRONMENT, BASIC NOTES FEATURES THE NATURE OF THE BUSINESS ENVIRONMENT, BASIC NOTES IMPORTANCE OF THE BUSINESS ENVIRONMENT, BASIC NOTES DIMENSIONS OF THE BUSINESS ENVIRONMENT

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