2 Business environmentThe business environment can be described as the sum of all factors over which general management does not have control, at least in the short run.Business environment consists of the totality of all factors which are external to, and largely beyond the control of individual business firm.
3 The environment is often described as external to the firm. There are some factors that may be within the firm but beyond the immediate control of management.For example:- if attitudes and beliefs of employees are not easily changeable by management (and thus not within the control of management), we can say that those attitudes and beliefs are an environmental factor within the firm.
4 The environment in which a company does business is often not well understood or studied by managers, especially in smaller and newer firms.A certain amount of knowledge of markets and competition will come with time and experience, but deliberate study of the environment can give managers a significant strategic advantage over intuition and experience alone.
5 Characteristics of environment Environment is complexEnvironment is dynamicEnvironment is multi facetedEnvironment has a far reaching impact
6 Environmental factors By Philip Thomas :Political conditionsSocial conditionsEconomic conditionsLegal/regulatory conditionsBusiness conditionsTechnological conditions
7 Political conditions Political and legal environment is an important element particularly in mixed economy like India and affects directly the working of business organization. The political environment in India can be analyzed in three respect -- political atmosphere -- government approach towards business -- laws regulating to business
8 Social conditionsThe social environment is consists of factors related to human relationships, and the development forms and functions of such a relationship having a bearing on the business of an organization.some of the important factors are:Demographic characteristicsSocial concernsSocial attitudes and valuesFamily structure and changesRole of women in society
9 Economic conditionsThe economic environment consists of macro-level factors related to the means of production and distribution of wealth that have an impact on the business of an organization.some of the important factors are:The economic stagesEconomic structureEconomic planningEconomic policiesEconomic indicesInfrastructural factors
10 Legal/regulatory conditions The regulatory environment consists of factors relating to planning, promotion, and regulation of economic activities by the government that have an impact on business of an organization.some of the important factors are:The constitutional framework, directive principles, fundamental rights, and division of legislative powers between Central and State governments.
11 Strategies & policies related to distribution and pricing & their control. Policies related to imports & exportsPolicies related to licensing, monopolicies, foreign investment and financing of industries.Policies related to public sector, small scale industries, development of backward areas, control of environmental pollution & consumer protection.
12 Business conditionsBusiness or market conditions consists of factors related to the groups and other organizations that compete with and have an impact on an organization’s markets & business.Some of the vital factors are:Customer or client factorsProduct factorsMarketing intermediaries factorsCompetition related factors
13 Technological conditions Technological environment is important for business as it consists of those factors related to knowledge applied, and the material and machines used in the production of goods and services that have an impact on the business.