Business Environment and its Components
- 1. By: Upama Rai 25th April, 2016
- 2. • Consist of all components of surroundings of a business organization which affect or influence its operations and determine its effectiveness
- 4. TYPES OF BUSINESS ENVIRONMENT INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT SPECIFIC OR TASK ENVIRONMENT GENERAL ENVIRONMENT
- 5. • Refers to all conditions and forces within the organization affecting a business operation • Can be controlled by the management
- 6. Components of Internal Environment Owners Employees Structure Corporate Result Unions Organizational Goals and policies
- 7. • Refers to that forces and institutions outside the organization that potentially can affect the organization’s performance.
- 8. EXTERNAL ENVIRONMENT SPECIFIC OR TASK ENVIRONMENT GENERAL ENVIRONMENT POLITICAL-LEGAL ENVIRONMENT ECONOMIC ENVIRONMENT SOCIO-CULTURAL ENVIRONMENT TECHNOLOGICAL ENVIRONMENT
- 9. Consists of specific organization or groups that influence an organization’s performance. Have a direct and immediate impact on the managerial decision and actions and are directly relevant to the achievement of organizational goals.
- 11. Refers to the broad external conditions that may effect business activities of an organization. Uncontrollable and requires proper monitoring of the components to adapt on the basis of emerging changes.
- 12. Political Environment Economic Environment Socio- Cultural Environment Technological Environment
- 13. Refers to government regulations and the legal system for business. Constitution Political philosophy Political Parties Political institutions Legal institutions Components :
- 14. Refers to all factors, which give shape and form to the development of economic activities. Consists of interest rates, inflation, stock market fluctuation, etc. Economic system Economic policies Economic conditions Capital market Globalization Components:
- 15. Includes the total social forces within which the organization operates. Involves traditions, social values, beliefs, norms, attitudes custom and demographic composition. Demography Lifestyle Social Values Social Institutions Religion Language Components :
- 16. Refers to the systematic application of knowledge essential to do things Focuses on machines and equipment, transmission of information, new techniques and processes, etc. Components: Nature of Technology Pace of technological change Technology Transfer Research and development Budget