Meeting the Challenge Meeting the Challenge of Today’s Dynamic of Today’s Dynamic

BusinessBusiness EnvironmentEnvironment

By Prof. N. Jayaprada

Dhruva College of Management

Environment literally means “The surroundings, external objects,

influences or circumstances under which someone or some thing exists”.

Definition of Business Environment‘The aggregate of all conditions, events,

and influences that surround and affect Business’

– Keith Davis

There is symbiotic relationship between business and its environment

The environmental forces are dynamic.No single firm is in a position to change

environment In consortium the business firms will be

in a position to mould the environment in its favour (to some extent).

Study of B E - Importance1 It helps an organisation to develop its broad

strategies and long term policies.2. It enables an organisation to analyse its

competitors' strategies and thereby, formulate effective counter strategies.

3.Knowledge about the changing environment will keep the organisation dynamic in its approach.

4.Such a study enables the organisation to foresee the impact of socio-economic changes at the national and international level of on its stability.

5. Executives are able to adjust to the prevailing conditions and , thus, influence the environment in order to make it congenial for business.

Composition of Business Environment

Business Environment

Environments of Business

• Economic• Technological• Political • Social• Competitive• Global

A Business and Its Stakeholders

Business Firm

Factors of Production

LandLand

LaborLabor

CapitalCapital

EntrepreneurshipEntrepreneurship

KnowledgeKnowledge

Government Affects Business By Being:

A Customer

An Overseer and Regulator

A Tax Collector

Economic Environment

$ Freedom of ownership

$ Contract laws

$ Elimination of corruption

$ Tradable currency

$ Minimum taxes & regulation

Technological Environment

• Internet

• E-commerce

• Role of Intermediaries

• Responsiveness to Customer

• Information Management

Social Environment• Diversity/Multicultural

• Aging/Graying of America

• Two Income Families

• Nuclear Families

Competitive Environment• Customer Service

– Customer Demands– Speed

• Community/Stakeholder Needs

• Natural/Ecological Concern

Global Environment• Quality

• Productivity

• Changes

Dealing With A Multicultural Workforce

Show Respect for Culture/Value of Others

Avoid Stereotyping Include All Workers in Acculturalization Be Empathetic But Be Yourself Avoid Imposing Your Culture/Values on

Others

Show Respect for Culture/Value of Others

Avoid Stereotyping Include All Workers in Acculturalization Be Empathetic But Be Yourself Avoid Imposing Your Culture/Values on

Others

E-commerce Explosion• Transaction costs

• Size of purchase per transaction

• Integration

• Flexibility

• Catalog size

• Customer Interaction

Internet Impact• Communications

• Access

• No Borders

Changing Intermediaries