Business Environment

Introduction to Business and its Environment

group no-1

IntroductionBusiness environment

consists of all those factors that have an impact on the business.Such as 1)Strength 2)Weaknesses3)Internal Relationships4)Power of adaptation5)Government policies and

regulations6)Nature of the economy7)Natural factors, etc.

Definitions

L. H. Haney says “Business is a human activity directed towards producing or acquiring wealth through buying and selling activities”.

K. Aswathappa says “Business may be understood as the organised efforts of enterprises to supply consumers with consumers with goods and services for a profit”.

ExplanationIn simple terms business is organised activity which supplies goods and services to the society for a profit.

Need of Business 1)Regular supply of goods and services

2)Optimum and meaningful use of resources

3)Generating employment opportunities

4)Revenue to the government

5)Social welfare

6)Facilitates economic growth and helps in creation of rich and developed countries

7)Capital formation

Features/Characteristics of Business1)Regular and continuous buying

and selling of goods and services

2)Profit Motive

3)Involvement of Risks and Uncertainties

4)Creative and Dynamic

5)Societal Interest

6) Organised Activity

7) Improves standard of living

8) Government control

9) Various forms

10) Degree of Scale

11) Globalization

12) Business, Profession and Employment are inter-related

13) Social Responsibility

Scope of Business

Industry

Commerce

Industry

1)Primary2)Extractive 3)Genetic4)Manufacturing (a) Basic (b) Intermediate goods (c) Consumer goods (i) Consumer durables (ii) Consumer non-durables5) Construction6)Service7)IT

Commerce

Trade

Aids to Trade

Internal

External

1)Retail

2)Wholesale

1)Import

2)Export

3)Entreport

1)Transport2)Warehousin

g3)Advertising

and Salesmanship

4)Insurance5)Mercantile

Agents and traders

6)Banking and Finance

Role of Business

To Business firms

To Consumers To Society

To Business firms

1)Achievement of Objectives

2)Increasing knowledge and skills

3)Product development

4)Development of good relations

5)Good Corporate Image

6)Optimum utilisation of resources

7)Expansion of business

8)Social status and Prestige

To Consumers

1) Provides quality goods and services

2) Provides goods at good price

3) Higher standard of living

4) Customer satisfaction5) Better facilities and

services

To Society

1)Economic Growth2)Regional

development3)Social welfare4)Employment

opportunities5)Revenue to the

government6)Capital formation7)International

relation

Business ObjectivesDefinitionAccording to Dalton E. Mcfarland “Objectives are the goals, aims or purposes that organisations wish to achieve over varying period of time”.

Classification of Business Objectives

Organic Objectives

Economic Objectives

Social Objectives

Human Objectives

National Objectives

Organic Objectives

(a)Survival(b)Growth(c)Recognition and

Prestige

Economic Objectives

(a)Profit (b)Creation of customers(c)Creation of wealth(d)Innovation (e)Optimum utilisation of

resources(f)Increase in market

share(g)Expansion of markets(h)Product introduction

Social Objectives

(a)Towards employees(b)Customers(c)Towards dealers(d)Shareholders(e)Government(f)Suppliers(g)Media(h)Competitors

Human Objectives

(a)Fair wages(b)Better working

conditions(c)Job satisfaction(d)HRD(e)Welfare facilities

National Objectives

(a)Social Justice(b)Regional

Development(c)Development of

small scale industry(d)Self Sufficiency(e)Social Welfare(f)Creation of

Employment

Role of profit in businessProfit is very important for survival

and growth of businessProfit is the soul of the business“No profit, no survival”Role:1)Indicates Efficiency2)Reward for risks and

uncertainties3)Industrial growth4)Return on Investment5)Means of control6)Helps in survival of business7)Helps in providing facilities to

the employees

Definition According to k. Aswathappa “Environment refers to all those external forces which have a bearing on the functioning of business”.Features of Business Environment1)Environment is the surrounding

situation of Business2)Environment is dynamic3)Business to a greater extent cannot

control the environment4)Environment controls the scope

(limit) of the business5)Direct and lasting effect

6) Environmental is inseparable part of business7) Business environment is complex8) Environment is multi-faceted9) Environment, Planning and Business Management are related10) Environment creates opportunities and threats11) Business Environment is a challenge12) Environment requires adaptability13) Environment needs minute study by businessmen

Thank you