Many industries, except only a few industries of strategic importance, which were earlier reserved for the public sector have been thrown open for the private sector. Each of the 12 keys will be identified and discussed throughout this paper. Legal Political environment includes factors like the nature of government policies particularly … those related to taxation, industrial relations, regulation of internal business and industry, and foreign trad regulations. Economic environment has stronger influence over organisation's policies and actions. All these goods compete for attracting disposable incomes of the final consumers.
You can also take the lead by coming up with innovative products and services which entice customers to want what you offer. It may be noted that social responsibility or social responsiveness is related to ethics. However, for various reasons such as rigid labour laws and low productivity of labour, various tax concessions on investment in capital equipment and machinery, business firms in India are generally seem to be using capital-intensive technologies imported from abroad. In some areas, however, such applications of technology start infringing on the rights of individuals and may be unethical. Walmart was started by a man named Sam Walton and his brother. These factors of the economy always affect the demand for products.
They get it from doing an analysis of the external environment. Some Aspects of Economic Environment: 1. Word Limit: Word Limit varies by task component 3000 maximum Written assignments must not exceed the specified maximum number of words. In the present day of intense competition a firm has to spend a lot on advertisements to promote the sales of its product by creating new customers and retaining the old ones. Some Aspects of Legal Environment: 1. It will include factors like demographic profile of the people, culture, and life style.
For example, the health-and fitness trend has become popular among large number of urban dwellers. A successful man or women are those that have a purpose or a meaning in life. The businessman must closely monitor the technological changes taking place in his industry because he will have to implement these changes to remain in the competitive market. Some Aspects of Technological Environment: 1. Economic Environment: It comprises of the economic variables such as interest rates, income, stock market indices that affect the functioning of the enterprises. But more frequently there is non-price competition under which firms engage in competition through competitive advertising, sponsoring some events such as cricket matches for sale of different varieties and models of their products, each claiming the superior nature of its products. The system of business is made up of all environemntal which requires the business to adopt new strategy.
One more way to classify environment is on the basis of systems approach, referred to as input-output approach. Similarly, environmentalists like Arundhi Roy have been campaigning against industries which pollute the environment and cause health hazards. It also regulates the working of all banks in India. The task environment covers the forces relevant to an individual organisation within an industry. Managers must be careful about the technological dimension. Every political party has a different attitude towards business community.
Technology consists of the type of machines and processes available for use by a firm and the way of doing things. Investment decision must be accurate in new technologies and they must be adaptable to them. Publics: Finally, publics are an important force in external micro environment. Economic Environment : Economic environment includes the type of economic system that exists in the economy, the nature and structure of the economy, the phase of the business cycle for example, the conditions of boom or recession , the fiscal, monetary and financial policies of the Government, foreign trade and foreign investment policies of the government. Understand the organisational purposes of businesses 2.
If a business fails to adapt to such changes, its survival becomes difficult. These factors include suppliers, customers, competitors, regulators and so on. The recent technological changes of Indian market are: 1. The political philosophy of the government wields a great influence over business policies. For example, in case of construction companies and automobile manufacturers, low longer-term rates are beneficial because they result in increased spending by consumers for buying homes and cars on borrowed money. Location and Facilities 3 B4: Management Structure 3 B5. In the wake of economic reforms initiated in the early nineties when foreign investors were allowed to make investment in India, they were prompted to invest in India by pointing out that the size of Indian market was quite large.
In fact, availability of natural resources in a region or country is a basic factor in determining business activity in it. They were told that 200 million Indian people could afford to buy the industrial products and this constituted quite a large market which could be profitably exploited. The more the environment complex, and dynamic, the more uncertain it is, more the information managers need about the environment to be able to make decisions. For instance, India through rich in natural resources remained poor and underdeveloped because available resources had not been put to use due to lack of adequate capabilities of Indian business class. Economic factors, as the name implies related to the general condition of the economy within which a business operates and conducts business.
Therefore, the companies should constantly watch the technological changes so that they are able to exploit the business opportunities. The following are the examples of the impact of the legal regulatory environment on business: i By removing control on the capital market, a huge amount of capital was collected by issuing various new issues in the primary market. In an organization, body is influenced by the environment. Technological Environment : The nature of technology used for production of goods and services is an important factor responsible for the success of a business firm. For example, a car manufacturing firm such as Maruti Udyog has individuals, companies, institutions, government as its customers. Some products and services may actually do better in an economic downturn.
Transport and Communication System 7. However, during economic downturns, input cost pressures may ease as businesses scale back manufacturing operations and lay off staff. The important economic factors for business are inflation, interest rates, and unemployment. It is crucial in identifying key features of a marketing plan. Consequently, the Coca-Cola entered the Indian market once again.