Global Business Environment Notes

Global Business Environment Notes

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CHAPTER WISE

Meaning and definition of business environment

The life and existence of any business depends on it

How that business adjusts its physical resources, financial resources and other capabilities to suit the enterprise. An environment that directly or indirectly affects any business organization is known as a business environment. The business environment has a wide impact on the efficiency of the institution. This business environment can be manifested in the following two ways

(i) external environment,

(ii) Internal environment.

Although the internal environment can be controlled by appropriate factors, it is not possible to change the external environment, so it is possible to perform business functions while remaining within its sphere of influence.

Major scholars have defined the business environment as.

(1) In the words of William Gluck and Jock , “The business environment is the sum of all things outside of commercial firms and industries that affect their organization and operations.”

(2) According to Urvik and Hunt , “Business is an enterprise, which manufactures, distributes or provides to other members of society who need it and who pay for its value.” Is capable and willing. .

(3) According to Davis, “Business is the concerted effort of the people producing goods and services, selling them in the market and benefiting from this effort.”

On the basis of the above definitions, we can say that the specific conditions in which the business organization has to implement its activities, all the conditions fall under the business environment.

The business environment has a partial or wide impact on business. It is often not possible to adapt to external factors, so their

Following this, we have to give direction to our actions and adjust them accordingly. In case of not doing so, there is a definite decline in business.

Nature of business environment

Clean and efficient environment is very important for the success and development of business. When the administrative system is smooth and strong, it is possible to determine the professional policies and their execution with ease. Due to inefficient and corrupt administrative services, there is more possibility of loss than profit. It is well known that a distinct relationship is found between business and environment. This relationship can be explained through the following points

1. Continuous contact with environment or environment-

It is necessary to keep every business organization constantly in touch with the environment. This requires two-way communication to each institution. With this, the organization gets instant information about the changes happening in the environment and the organization also becomes successful in providing information about its new products and services to the environment. If these connections are meaningful, then the future of the organization is bright.

2. To meet the requirement of environment by the institution-

Of the environment. It is necessary to make every effort by the institution to fulfill the requirements. If the institution is not able to do this, then it gradually ends automatically.

3. Implication of multiple moving elements

– Many dynamic elements are contained in the environment of a professional institution. These elements are always changing.

4. Environments-wide market-

The environment of the organization is its wide market. it happens. The goods produced by each business firm have to provide their external environment. When the environment accepts those goods or services, then the market becomes available to the organization and the credibility of the organization increases significantly.

5. Obstacles and uncertainties –

Every business organization has to face many uncertainties and obstacles in working in a business environment and satisfying the expectations of the environment. An organization that overcomes these uncertainties and obstacles and finds suitable opportunities becomes successful; But on the contrary, if she is unable to do so, then her existence ends.

6. Influencing the organization by internal and external environment—

Each type of organization affects the environment, both internal and external. The organization can also control its internal environment, but there is no control of the organization on the external environment or landscape, so any organization has to make its decisions keeping the external environment in mind.

7. Mutual dependence among elements.

One of the elements of a dynamic environment is that all these elements are not self-sufficient and that each other water, for example, the economic component and the social component, the political component and the religious component and the social component affect each other. Depend on each other.

8. Exchange of resources-

All business establishments derive from the environment and they use these resources to produce goods. Without acquiring these resources, any organization can perform its functions. Under some circumstances, institutions have to face difficulty in obtaining these resources and face competition.

9. Responsibility towards all classes-

A business establishment is responsible for the names / components of the environment. These classes, towards which a business establishment rises, are: consumers, employees, common citizens, government machinery, national international economy, employers, competitive establishments etc. Therefore, every business establishment should take care of all these classes while taking any decision.

10. Generating utility through conversion-

Whatever resources the business receives from its environment, they return them to the environment. In this process he transforms various means and also creates utility.

11. To withstand the risk of accidental changes –

The business world also has to face the risk of accidental changes in the environment, whether they are favorable or unfavorable to the competence of the practitioner. These sudden changes can be of many types; For example, the problem of electricity, slowdown, increase in interest rates, sudden rise in prices of raw materials, cutting-edge goods in the market, etc.

Global Business Environment Notes

12. Medium of change in society

It is not that only the environment affects the institutions, but it has been seen that some institutions have also been pioneers in changing the environment. It is, therefore, fair to say that “Business is the creator of the environment as well as its creator.” Changes in education, conduct, lifestyle and physical and moral standards have been brought about in the society from time to time and changes will also be made in the future.

13. Must change along with changes

Every business community has to change itself according to the environment to maintain its existence. Customer interests. lifestyle. Fashion, production and distribution competition are constantly changing in government regulation and policies and business cycles, so all organizations must change themselves according to these changes.

14. Information Exchange-

Each business organization also exchanges many information in its external environment. Generally, each institution studies the external environment and receives information regarding social, economic, political, cultural and technological environment. Based on these information, various components are studied and estimates are also made. It is only through these information that the businessman makes plans in relation to production, finance, purchase and sale etc. and makes decisions and controls. Along with understanding the complexities of the environment, he also finds a solution to the problem.

Information is also provided to the external environment by the businessman himself. These information can sometimes be sought by order of the court or by government departments. Also, from time to time, he provides information to his investors, employees and labor unions. Sometimes institutions voluntarily provide information to the external environment. These information can be given only through press releases or advertisements etc. 

Global Business Environment Notes

15. Business Responsibility to Know Very Specific Changes

As is known; The business environment is constantly moving. Also, it is expected from the business that the businessman must be aware of all the very specific changes in the environment. For this, no one will tell the businessman but he has to keep himself aware of these changes. If these changes are made known in advance, then the business is likely to benefit greatly.

16. Unlimited effects of some components.

There are also some components that have unlimited effects. Those components are – new statutory provisions, new laws, new government policies, scientific research, social conditions, political and power changes, foreign pressures, technological changes etc. These are the components on which it is usually not possible to control the environment.

Therefore, it can be said that a very deep relationship between business and environment

Global Business Environment Notes

Classification of Business Environment

Classify the business environment based on the following headings

(A) Internal Environment,.

(B) External Environment.

(A) Internal environment

Internal Environment

Each business organization has its own organization through which it carries out its business work. This organization is its environment. This internal environment or environment is of two types and (Formal) and Informal. Business internal ventilation is controllable, which can be controlled by the practitioner. Its important parts are as follows:

(i) Major goals and objectives of the business,

(ii) Business Ideology. Philosophy – approach,

(iii) Practical codes of conduct and ethical standards,

(iv) Factory environment

(v) business and managerial policies,

(vi) Production techniques and procedures

(vii) labor management relations,

(viii) Information systems and systems of management,

(ix) Organization structure and design,

(x) Availability, functionality and utility of resources.

All the above mentioned components are related to the internal environment of business, ie. The environment that is under the control of the businessman or the firm. If the firm wishes, it can achieve success by favoring these components. Changes also occur from time to time. But whatever changes happen. They have complete control of the organization.

(B) outdoor environment

External Environment

The external environment or environment refers to the entire external business world that comes in contact with the organization. The external environment can be divided into two classes.

(1) Micro Environment of Business,

(2) Macro Environment of the business. .. Global Business Environment Notes

1. Micro Environment of Business –

Individual family components are closely associated with the company. Micro powers necessarily. Not all firms in the industry are affected. It only affects a firm. In this type of environment, the following factors of the environment near business are done which may affect its ability to serve customers.

(i) Customer,

(ii) competition,

(iii) the defendant,

(iv) public,

(v) Maca

Such as advertisements, radio, TV, magazines and consultants etc.

2. Macro Environment of Business

It includes those components that are the two types of control components of a businessman.

(i) Public,

(ii) marketing channels;

vironment) – are not under the control of the practitioner of the macro environment. these

(A) Economic Factors,

(B) Non-economic Factors.

The following factors are included under the economic component

(i) population related environment,

(ii) economic environment,

(iii) technical environment,

(iv) International environment etc.

The following factors are included under the economic component.

(i) socio-cultural environment,

(ii) political environment,

(iii) Physical environment

(a) Natural resources – land, minerals, water etc.

(b) Climate, rainfall, cold, moisture etc.,

(c) Natural Structures-Electricity, Roads, Railways, Other Traffic etc.,

(iv) Educational environment. mom

World Trade Organization and India

India was a founding member of the GATT established in 1947 and the World Trade Organization established in 1995. India’s role in the World Trade Organization has been that of a highly active and effective member nation. After its establishment, the World Trade Organization first got a revision of India’s trade policy in April 1998, in which India was highly praised.

Potential benefits to India from WTO

Advantages to India from WTO

1. Settlement of Disputes

As a member of the World Trade Organization, India can lodge a complaint with the organization for the disposal of trade in goods and services and disputes related to them and put their side there effectively and get a suitable solution out of them.

2. Increase in Exports

Being a member of the World Trade Organization, India’s exports are expected to increase by 150 to 200 million dollars per year. Exports of textiles and garments to the US and European countries will increase the country’s export income rapidly.