Introduction to business environment

knw about business environment

1. Introduction to Business Environment Dr. Payel Chaudhuri

2. What is Business? Business as a commerce is the process that people produce, exchange and trade goods and services The company’s business model not only outlines the plan for the resources but creates a competitive advantage in the value of its product and generates profitable sales revenue By reinvesting the profits the business increases its capital and contributes to the wealth of the owners

3. What is Business? DIMENSIONS A COMMERCE AN OCCUPATION AN ORGANIZATION as an occupation acquired set of specialized skills and abilities that allows people to create valuable goods and services as an organization is the system of task and authority relationship that coordinates and controls the interactions between people so that they work toward a common goal as a commerce is the process that people produce, exchange and trade goods and services

4. Why to study business environment? Business enterprises cannot function in isolation Business enterprises exist in and are surrounded by an ‘environment’ – the business or organisational environment Society and business enterprises are mutually dependent Business enterprises satisfy societal needs Relationship between society and business enterprises takes place in a changing environment

5. CHANGE IS THE ONLY CONSTANT …….

6. COMPONENTS OF THE BUSINESS ENVIRONMENT Different environmental variables exist internally and externally to the business enterprise Environmental variables have a positive or negative influence on the enterprise Mutual relationships exist between these environments

7. ENVIRONMENTAL SCANNING Identification and forecasting phenomena in the environment Ongoing environmental scanning is essential for strategy formulation Enterprises continuously engage in identifying and forecasting opportunities and threats Enterprises need to proactively or reactively respond to changing conditions in the environment Various sources of information are available to assist with scanning

8. Importance of business environment Business environment is complicated and active in nature and has a far-reaching impact on the survival and growth of the business.

9. Internal environment Important internal factors which have a bearing on the decisions of a business firm are: Value system Vision, mission and objectives Management structure and nature Internal power relationship Human resources Company image

10. External environment Micro environment consists of the actors in the company’s immediate environment that affect the performance of the company. They are more intimately linked with the company. Macro environment consists of larger societal forces that affect all the actors in the company’s micro environment.