CS FOUNDATION BUSINESS ENVIRONMENT TYPES OF BUSINESS ENVIRONMENT

• CS BUSINESS ENVIRONMENT AND LAW 2
  
  
• MEANING OF BUSINESS ENVIRONMENT

1. SUM TOTAL OF THOSE FACTORS WHICH INFLUENCE THE BUSINESS AND OVER WHICH THE BUSINESS HAS NO CONTROL.
2. OPPORTUNITIES MEANS POSITIVE CHANGES THAT OCCURRED IN THE BUSINESS ENVIRONMENT AND HELPED THE ORGANIZATION TO IMPROVE ITS PERFORMANCE.
3. THREATS:-NEGATIVE CHANGES THAT OCCURRED IN THE BUSINESS ENVIRONMENT AND HINDERED THE PERFORMANCE OF THE ORGANIZATION.

• TYPES OF BUSINESS ENVIRONMENT

1. INTERNAL ENVIRONMENT:REFERS TO ALL THOSE FACTORS WHICH INFLUENCE THE BUSINESS AND PRESENT WITH IN THE BUSINESS ITSELF AND ARE UNDER THE CONTROL OF THE BUSINESS.
2. EXTERNAL ENVIRONMENT

• INTERNAL ENVIRONMENT
• CONSIST OF THE OBJECTIVE OF THE BUSINESS,OWNERS OF THE BUSINESS,SHAREHOLDERS, EMPLOYEESS,THE MANAGING DIRECTORS,THE INFRASTRUCTURE AND THE CULTURE OF THE ORGANIZATION
• IT INCLUDES 6 MS I.E

1. MAN ( HUMAN RESOURCES)
2. MONEY ( FINANCIAL FACTOR)
3. MARKETING RESOURCES
4. MACHINERY ( PHYSICAL ASSETS)
5. MANAGEMENT STRUCTURE AND NATURE
6. MISCELLANEOUS FACTORS ( RESEARCH AND DEVELOPMENT,COMPANY IMAGE,BRAND EQUITY ,VALUE SYSTEM)

• INTERNAL ENVIRONMENT
• MAN ( HUMAN RESOURCES) : THE ORGANIZATION CAN GROW AND ACHIEVE SUCCESS WITH THE HELP OF HUMAN BEINGS. THEY ARE VERY IMPORTANT.IT IS THE QUALITY OF THE HUMAN BEINGS WHO ARE WORKING IN THE ORGANIZATION MATTERS A LOT. THEIR DEDICATION,ATTITUDE,COMMITMENT,THEIR KNOWLEDGE AND SKILLS WILL TAKE  THE ORGANIZATION TO GREATER HEIGHT
• MONEY ( FINANCIAL FACTOR):-FINANCIAL RESOURCES ARE IMPORTANT FOR ESTABLISHING AS WELL FOR THE RUNNING OF THE ORGANIZATION. FINANCIAL POLICY,CAPITAL STRUCTURES DECISION AND DIVIDEND POLICIES ,SOURCES OF FINANCE MATTERS A LOT
• MARKETING RESOURCES:- RESOURCES LIKE THE ORGANIZATION OF THE MARKETING,MARKETING RESEARCH,QUALITY OF MARKETING STAFF,PROMOTIONAL POLICIES ,DISTRIBUTION NETWORK
• PHYSICAL ASSETS AND FACILITIES:- PRODUCTION CAPACITY,TECHNOLOGY, WHICH INFLUENCES THE COMPETITIVENESS OF THE  FIRM.
• MANAGEMENT STRUCTURE AND NATURE:-COMPOSITION OF THE BOARD OF DIRECTORS AND THEIR MGMT STYLE AND THE PHILOSOPHY OF MANAGEMENT. THE CULTURE AND QUALITY OF VARIOUS STRATEGIES
• MISCELLANEOUS FACTORS:-

1. RESEARCH AND DEVELOPMENT : HAS IMPACT ON ABILITIES OF THE ORGANIZATION,CREATING COMPETITIVE ADVANTAGE
2. COMPANY IMAGE AND BRAND EQUITY:-HELP IN RAISING THE FINANCE,MAKING JOINT VENTURE ,LAUNCHING NEW PRODUCTS.

3. VALUE SYSTEM:- VALUE SYSTEM OF THE FOUNDERS AFFECTS THE CHOICE OF BUSINESS,VISION ,MISSION AND GOALS AND OBJECTIVES OF THE ORGANIZATION
4. COMPETITIVE ADVANTAGE: ANALYSIS OF COMPETITOR AND EDGE OVER COMPETITOR.
5. INTERNAL ANALYSIS WILL HIGH LIGHT THE STRENGTH AND WEAKNESSES

• EXTERNAL ENVIRONMENT
• THE OUTSIDE FORCES WHICH HAS BEARING ON THE ORGANIZATION. THE ORGANIZATION DOES NOT HAVE ANY CONTROL ON IT.
• TWO TYPES OF EXTERNAL ENVIRONMENT:

1. MICRO/OPERATING ENVIRONMENT
2. MACRO/GENERAL ENVIRONMENT

• MICRO ENVIRONMENT
• TASK ENVIRONMENT AND OPERATING ENVIRONMENT
• IMMEDIATE ENVIRONMENT THAT AFFECTS THE PERFORMANCE AND LINKED WITH THE ORGANIZATION

1. CUSTOMERS
2. EMPLOYEES
3. SUPPLIERS
4. SHAREHOLDERS
5. MEDIA
6. COMPETITORS

• MICRO ENVIRONMENT
• CUSTOMERS: CUSTOMERS ARE TH KINGS. THE ORGANIZATION HAS TO UNDERSTAND THEIR NEEDS AND WANTS AND PROVIDE PRODUCTS WHICH GIVE DELIGHT TO THE CUSTOMERS. PROVIDE QUALITY PRODUCTS AT REASONABLE PRICE
• EMPLOYEES:-RIGHT STAFF EMPLOYED AT THE RIGHT JOB AND AT THE RIGHT PLACE. PROPER TRAINING AND DEVELOPMENT FOR GENERATING ABILITIES,SKILLS AND COMPETENCIES FOR GAINING COMPETITIVE ADVANTAGE
• SUPPLIER : PROVIDE INPUTS,COMPONENTS AND SERVICE TO THE BUSINESS. GOOD RELATIONSHIP WITH SUPPLIER IS MUST
• SHAREHOLDERS: SHAREHOLDER AFFECT THE FUNCTIONING OF THE ORGANIZATION. MANAGING THE NEEDS OF THE SHARES,PROPER DIVIDEND POLICY
• MEDIA: POSITIVE MEDIA ATTENTION CAN MAKE AN ORGANIZATION AND NEGATIVE MEDIA ATTENTION CAN BREAK. PUBLIC RELATION MANAGERS HAVING CORDIAL RELATION WITH THE MEDIA
• COMPETITORS:- COMPETITOR ANALYSIS AND MONITORING
• MACRO ENVIRONMENT
•  GENERAL ENVIRONMENT AND UNCONTROLLABLE. IT HAS IMPACT ON THE STRATEGIES OF THE ORGANIZATION.
• CONCERNED WITH MAJOR ISSUES AND UPCOMING CHANGES IN THE ENVIRONMENT

1.     SOCIO-CULTURAL AND DEMOGRAPHICS

2.     TECHNOLOGY

3.     ECONOMIC CONDITIONS

4.     ECOLOGY AND PHYSICAL ENVIRONMENT

5.     POLITICAL AND LEGAL

·         MACRO( GENERAL ) ENVIRONMENT

·         ECONOMIC ENVIRONMENT :-COMBINATION OF ECONOMIC SYSTEMS,ECONOMIC POLICIES,AND ECONOMIC CONDITIONS OF A COUNTRY.

·         ECONOMIC SYSTEMS:-SOCIALISTIC,CAPITALISTIC AND MIXED ECONOMIC SYSTEM

·         ECONOMIC POLICIES:- MONETARY POLICY,FISCAL POLICY,INDUSTRIAL POLICY,IMPORT AND EXPORT POLICY .TAXATION POLICY.

·         ECONOMIC CONDITIONS:-NATIONAL INCOME,GENERAL PRICE LEVEL,RATE OF INTEREST

·         IMPACT OF ECONOMIC ENVIRONMENT

1.     INCREASE IN DISPOSABLE INCOME WILL TRIGGER MORE DEMAND

2.     DECREASE IN BANK INTEREST WILL ALSO BOOST THE DEMAND

3.     HIGH INFLATION RATE INCREASES THE COST OF BUSINESS

·         SOCIAL CULTURAL AND DEMOGRAPHIC ENVIRONMENT

·         CONSISTS OF SOCIAL FORCES LIKE TRADITIONS,VALUES,SOCIAL TRENDS,FASHIONS,WISHES,HOPES.LEVEL OF EDUCATION ,STANDARD OF LIVING. SOCIAL ENVIRONMENT  HAVE IMPACT ON BUSINESS.

·         ELEMENTS:-

·         TRADITIONS : SOCIAL PRACTICES

·         VALUES:-FREEDOM,SOCIAL JUSTICE,EQUALITY

·         SOCIAL TRENDS:- GENERAL CHANGE

·         IMPACT :_

·         OPPORTUNITIES FOR VARIOUS BUSINESS

·         SOCIAL RESPONSIBILITY

·         FREEDOM OF CHOICE

·         CREATION OF DEMAND

·         SOCIAL CULTURAL AND DEMOGRAPHIC ENVIRONMENT

·         DEMOGRAPHICS REFERS TO SIZE,DENSITY,DISTRIBUTION AND GROWTH RATE OF POPULATION

·         FOR EXAMPLE : COMPOSITION OF THE POPULATION DETERMINE THE NATURE OF DEMAND

·         HIGH RISE OF POPULATION:EASILY AVAILABILITY OF THE LABOUR,LABOUR INTENSIVE TECHNIQUES

·         TECHNOLOGICAL ENVIRONMENT

·         INNOVATION OF NEW TECHNIQUES TO PRODUCE GOODS AND SERVICES

·         DISCOVERING NEW WAYS OF PRODUCING GOODS AND SERVICES

·         DISCOVERING NEW METHODS OF OPERATING BUSINESS

·         IMPACT:-

·         DIGITAL WATCHES HAVE ALMOST ELIMINATED THE MARKET FOR TRADITIONAL WATCHES

·         MULTIPLEX CINEMAS HAVE FINISHED THE TRADITIONAL THEATERS

·         POLITICAL ENVIRONMENT

·         POLITICAL CONDITIONS IN THE COUNTRY

·         MAY HAVE POSITIVE OR NEGATIVE IMPACT

• POLITICAL STABILITY
• PEACE IN THE COUNTRY
• ATTITUDE OF THE GOVT
• TYPE OF GOVT
• IDEOLOGICAL OF VARIOUS POLITICAL PARTIES
• IMPACT OF POLITICAL ENVIRONMENT:-
• INTRODUCTION OF GST
• BANNING OF MULTINATIONAL COMPANIES BY JANATA GOVT IN 1977
• LEGAL ENVIRONMENT
• LEGAL ENVIRONMENT CONSISTS OF ALL THE ACTS PASSED BY THE GOVT,JUDGMENT OF COURTS AND DECISIONS TAKEN BY VARIOUS COMMISSIONS AND AGENCIES APPOINTED AT STATE,CENTER OR LOCAL LEVEL.
• THE ACTS OF LEGISLATION PASSED BY THE GOVT
• DECISIONS TAKEN BY VARIOUS COMMISSIONS AND GOVT
• THE JUDGMENT OF COURTS
• BY REMOVING CONTROL ON THE CAPITAL MARKET
• RELAX ION IN FDI