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INTRODUCTION TO BUSINESS POLICY AND ENVIRONMENT
Queries can be addressed to [email protected]
Poonam Khurana (Course Facilitator)
• Involves production, distribution or exchange of goods or
rendering of services.
• To earn profit or to earn a living.
• Led to creation of utility.
WHAT DO YOU UNDERSTAND BY BUSINESS??
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Survival
GrowthSocial
ResponsibilityProfit
OBJECTIVES OF BUSINESS
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BUSINESS CHALLENGES
Meeting stakeholders expectations
Developing and retaining top talent
Creating a customer responsive organization
Diminishing time to market
Market agility
Pricing and quality
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BUSINESS POLICY
Plans or rule of action
General statements of principles
Which guide thinking, decision making and actions of
organizations.
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WHAT DO YOU MEAN BY BUSINESS ENVIRONMENT???
The environment of any organization is:
the aggregate of
all conditions, events and influences
that surround and affect it.
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Complex
Dynamic
Multi-faceted
Far- reaching impact
CHARACTERISTICS OF BUSINESS
ENVIRONMENT:
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WHY STUDY BUSINESS ENVIRONMENT
• Development of broad strategies to ensure sustainability
• To foresee the impact of various factor changes at the national
and international levels on firm’s ability.
• Analysis of competitor’s strategies and formulation of effective
counter measures.
• To keep oneself dynamic
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TYPES OF ENVIRONMENT
• Internal Environment
• External Environment
– Micro environment
– Macro environment
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Queries can be addressed to [email protected]
INTERNAL ENVIRONMENT
Refers to all the factors that are within an organization which
impart strengths or cause weaknesses of strategic nature.
Controllable factors.
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These include:
Value system
Vision, Mission and Objectives
Management Structure and Nature
Internal power relationship
Human Resources
Company Image and Brand Equity
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EXTERNAL ENVIRONMENT
• Includes all factors outside the organization which provide opportunities or pose threats to the organization
• Uncontrollable factors
• Consists of Micro and Macro environment
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Micro Environment
“It consists of the factors in the company’s immediate
environment that affect the performance of the company”.
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Micro Environment Factors
Suppliers
Customers
Marketing Intermediaries
Competitors
Publics
Financiers
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Macro Environment
It comprises general trends and forces that may not
immediately affect the organization but sooner or later will
alter the way organization operates.
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Macro Environment Factors
Political Factors
Economic Factors
Social or Socio-cultural Factors
Technological Factors
Legal Factors
Environmental Factors
Demographic Factors
Natural Factors
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Political parties in power
Political Philosophy
Political Factors
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Economic Factors
– Economic stages that exists at a given time in a country
– Economic system that is adopted by a country: Capitalistic,
Socialistic or Mixed Economy
– Economic planning: Five Year Plans, Budgets, etc.
– Economic policies: Monetary, Industrial and Fiscal Policies
– Economic Indices: National Income, Per Capital Income,
Balance of Payments etc.
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Social Customs & Rituals and practices
Lifestyle patterns
Family structure
Role & position of men, women, children and aged
in family & society
Socio-Cultural Factors
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Sources of technology
Technological development
Impact of technology
Technological Factors
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Constitutional framework
Policies relating to pricing and foreign investment
Policies related to the public sector, SSIs, development of
backward areas.
Legal Factors
Queries can be addressed to [email protected]
Growth of population
Age Composition
Life Expectancy
Gender Ratio
Fertility and Mortality rates
Inter-state migration
Demographic Factors
Queries can be addressed to [email protected]
Queries can be addressed to [email protected]
