business definition business may be defined as the organized effort by individuals to produce goods...
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Business DefinitionBusiness may be defined as the organized
effort by individuals to produce goods and services, to sell these goods and services in a market place and to reap some reward for this effort.
- Keith Davis
Model Of Economic Management Old New
Closed economy Open economy
Self reliance Integrate with world economies
Pre-reform StrategiesState – led economic growth
Economic reform StrategiesMarket determined economic growth
License dominated regime Delicensing, deregularisation, debureaucratisation
Import substitution strategies Export –oriented strategies
Frequent State interventions Selective and effective state interventions
Political administered prices Market-determined prices at large
Dominance of PSUs Divestment from the are of Pvt. Interest
Underdeveloped Capital Market Reforms in Capital Market
Restriction of FDI and MNCs Inducement of FDI and MNC
Restrictions on currency movements Liberalisation of restrictions
Environment Environment refers to surroundings in which a particular organization or object is expected to work. It consists of all the forces with the potential to influence the organization or a system and its performance.
Business Environment Refers to all those external forces, such as economic, social, political, regulatory, technological, natural and competitive factors which affect the business.
“Business environment is defined as the sum aggregate of all conditions, events and influence that surround and affects it.”
- Keith Davis
Business Environment “A company’s environment consists of factors and forces that are external to the business management function of the firm and impinge on the management's ability to develop and maintain successful transactions with its customers.”
- Philip Cotler
Business Environment Business Environment as the aggregate of all conditions, events and influence that surround and affect it .
“ An Organization's external environment, consists of those things outside an organization such as customers, competitors, government, suppliers, financial firms and labour pools that are relevant to organization's operations.”
- Gerald Bell
Internal environment are those factors which are within an organization and impart strength or cause weakness in management process. The forces are owners, share holders, employees, organization, culture.
External environment incorporates all the factors which are outside the organization and influence the ability to achieve organizational goals. These are outside the organization and provide opportunities and pose threats. There are two approaches viz. direct and indirect elements. Direct action elements are those elements which directly affect the business operation from its outer world such as suppliers, customers, competitors, financial intermediaries.
Indirect action elements are the factors which affect the climate in an organizations’ activities take place but do not affect the organization directly. These elements are political variables, economic variables, social variables, technological variables and international variables.
Specific/ General : Part of the environment that is directly relevant to the achievement of an organization’s goal. Decrease in rupee value, increase in petrol prices. General environment is the portion of external environment that contains the external forces that have a more general influence on the organization. Economic policy, political conditions, socio-cultural influences , technological conditional and globalization issues are some examples. Political unrest in Arabian
countries, recession in Europe
Controllable / Uncontrollable environment : includes all those factors which are governed by the organizational control process. Internal factors are treated as controllable factors as organization has full freedom to shape or adjust the situations as per its requirements. Uncontrollable factors are external factors and beyond the control of organizations. It is for the organization to define its operational strategies and adjust within the framework.
Micro / Macro : Micro environment is concerned with immediate environment of business organization. Macro environment deals with the external environment in which organization opertaes.