Business Environment Essay

Business purlieu refers to the conditions prevailing in a society in which a furrow is to be shaped. It is defined as the total of all things external to headache firms and industries, which performance their organization and operation. The number and scope of surroundal situationors, which effect profession, is broad. There should be included all aspects of our social, scientific, economic, political and cultural life which shake off some intention upon business.Relationship of Environment to BusinessTo understand fully the nature of business, its structure, its organization and its behavior, one must deem not only at the business properly, but also at the environment within which business operates. More specifically, this means that business exists in surroundings external to its direct or operating components of firms and industries.The portentous elements of environment for a business house comprise persons, physical resources and climate, economic and market condition s, altitudes and laws of the land. These elements effect the cast of action of the company.Business and its environment interact. In our business-oriented society, business has influenced environmental conditions probably as much as or even more than environmental forces be withdraw shaped business.The firm depends upon its environmental conditions for the resources and opportunities necessary for its existence. The environment determines the limits of the firms activities. The environment contributes valuable resources to the business firm only if the firm provides the desired goods or run to the environment. A firm must look to public needs and attitudes remain sensitive to human values and wide awake to the social set up. Good businesses, therefore, are always responsive to the total environment in which they operate. scotch EnvironmentBusiness is considerablely influenced by the economy of the demesne. Its operational achiever depends upon an adjustment and meeting the re quirements of the economy. The of the essence(predicate) factors that are to be looked into and effectively handled are1. Desires, Customers and MarketsThe purpose of business is to anticipate desires of masses and purpose goods and services accordingly to reciprocate them. Let these goods and services so produced be carried effectively to the place of customers. But it is not possible unless businessman produces them at proper time and get ats them available to customers at reasonable set. Hence, timing of intersection and reasonable price. Hence, timing of production and reasonable price of products are important considerations. Further, the intensity of competition existent in the market and the degree of marketing strategies to be adopted also are important points to be considered by a business entrepreneur.2. AvailabilityBusinessmen must assess the source or sources of ceiling as well as the cost at which it is available. For a developing country like ours, obtaining gr eat is not so easy. It is definitely a problem as its availability depends upon will and capacity of mess to save and invest, existence of good capital and money market, and economic and financial policy of the government and so on3. Availability of LabourOperational efficiency of a business enterprise greatly depends upon the availability of ram at a reasonable price. If such manpower in the shape of skilled and unskilled workers is sufficiently available to a business according to its requirement and within reasonable wage rate, it can carry on its activities and expect profit. But to get workers at right time and at right price is not so easy. There are many factors that influence their availability.4. Level of ProductivityProductivity at a reasonable level depends upon how the activities are political platformned, organized, directed and controlled. The use of the latest production techniques, machines, manpower, and motivation and techniques of people to work sincerely and devotedly are some of the requirements to achieve the desired level of productivity.5. Imaginative EntrepreneurshipThe success of an entrepreneur depends upon the quality of his imagination and skill. More he is intelligent, imaginative, and farsighted, more he is effective in grabbing the chance and playing his role in the economic growth and betterment of people.6. Qualified and Capable ManagerThe adapted role of managers has greatly mitigated the efficiency of work operation, reduced cost and enhanced capability to reflexion challenge of competition. The science of management is undergoing a fast improvement in the light of research, study, experiences and observation. Every business enterprise is struggling to avail the benefit of intelligent, qualified, and competent managers.7. Market SizeMarket size of a business depends upon its production policy and programme. If its production target is limited, it will have a small market. On the other hand, if it has a large-scale pr oduction programme, it has to expand its market. Such business enterprises even go to foreign markets. Desire to expand the size of market causes them to adopt new marketing strategies and planned efforts to go as deep to different places as possible and create as many customers as it could be.8. Price Levels and lumpIn case if price level is changing fast, it becomes difficult for a business enterprise to plan its activities that would ensure a reasonable gain. Changing price, levels make the cost of capital, production, distribution, and profit unpredictable and uncertain. But serene then we find entrepreneurs coming up with f send off guess and estimation to make their business operate with better results and survive the vagaries of changing price levels and inflation.9. Government Fiscal and Monetary PolicyGovernment collects revenue through taxes, duties, fees etc, and spends the same on administration, public utilities like roads, bridges, canals, buildings, hospitals etc. Greater burden of taxes imposed by the government on people may reduce their ability to save and could affect investment climate. Similarly, monetary policy, which influences supply of money within the country, does also have its impacts on business activities. Central Bank of the country as controller of credit plays its role to regulate money supply together with the government. brotherly and cultural EnvironmentBusinesses produce goods and services for people who dwell in the society. therefrom the number of people, their age and educational composition has great significance for business. What a person buys or the service he consumes is a construction of his religious and cultural constraints. Thus the cultural religious and ethnic pressures have a vital objective on the affairs of the business.1. Population Growthfor a businessman, population growth presents both opportunities and problems. Opportunities arise from the fact that there are continually more consumers to buy business output and more workers to produce and plow it. Problems are caused by the fact that as more people want and need jobs, businesses must make them available otherwise the society will have to face the menace of unemployment.2. Population penning(a) Age-Wise CompositionDifferent age groups have different demands. Young people are interested in automobiles, musical instruments, sport equipments etc. Older people may be interest in medical thrill and health, food etc.(b) Education StandardAn illiterate population can be easily deceived. deceased are the days of the sellers society. The society where consumers are educated is the buyers society. People can well judge mingled with good and bad and reap the economies of modern technology.(c) Economic StandardsHigher income people can afford to satisfy tastes that people of lower incomes cannot. Thus when the medium family income increases, the market for business products and services also expands.(d) Changing course Oppor tunitiesWith increased investment in human resources, the opportunities to improve fatigue productivity are enhanced. The occupational shifts have been towards professional, technical, managerial jobs and in service industries. The opportunities for farm workers, craftsmen, machine operators etc, is declining substantially.3. Social Attitudes and BeliefsBusinesses have to take into account the attitudes, desires, beliefs, tastes, problems and tradition of the consumers. These aspects vary in individuals, groups and even nations. Americans hold attitudes like respect for all individuals, strong regard for education, trustingness in science and technology, belief in innovation, belief in competition, belief in an environment cleansed of air and water pollution, lovable communities with decent housing, safe streets, efficient transportation, educational and cultural opportunities. Such social beliefs have a considerable impact on business climate.4. PluralismThe society is broken do wn into many kinds of groups consumers, investors, labour organizations, managers, governments bureaucrats and politicians, religious groups, racial groups etc. In all(prenominal)thing that business managers do, they must be warning device to this pluralistic feature of the society. While the existence of so many interest groups tends to complicate business operations, they install a major safeguard against dominance of the society by any single interest group. scientific EnvironmentThere has always been a strong link between business and technology. Any business that wishes to survive in a changing world must be aware of the modern expert changes and also use technology to develop and modernize its products or services, to meet cost competition and to improve marketing. The alert businessman must not only be aware o technological changes bear upon his operations and his customs, he needs to forecast the state of the art so that he will have time to use it successfully before h e finds his products or processes obsolete. This he must also do so that he is the first one to put up a new product at the suitable time in the market and not lag behind which will be a degrading position in the world of competition.Political EnvironmentPolitical environment has a great impact on the establishment, operation, growth and expansion of business. Stable political climate makes things more certain and predictable. businessman fined themselves in a better position to estimate future and plan their business. In other worlds, greater is the political stability, better may be the opportunity for successful business. That is the reason why we often realise flight of capital from the country where there is political instability or where policy of government frequently changes.Legal EnvironmentEvery business is encircled by the laws, regulations, and court decisions of the land. Almost each and every decision made by a businessman should be within the permissible limits of laws and regulations of the country. He should eff that his action or decision might be subjected to a challenge in the court of law. Thus all decisions and steps should be within the framework of the law of the land. This success depends upon how he meets all judicial requirements. We know that in certain cases rules and regulations may be burdensome. But they all aim at creating an tune that is best suited to good conduct of business and protect the interests of customers and workers as well.Social Responsibility in BusinessA large part of an organizations response to its environment is called SOCIAL RESPONSIBILITY.Social Responsibility has been defined as the organizations obligation to take actions that protect and improve the wellbeing of the society as a whole, along with advancing its own interests.Basically business is said to hold this responsibility because of its extreme power to influence societal conditions.