“Consists of all factors that have a bearing on the
Types of Business Environment
include gross domestic product, markets for goods and services ,
foreign exchange reserve, growth of foreign trade, etc.
(i) Industrial policy
(ii) Fiscal policy
(iii) Monetary policy
(iv) Foreign investment policy
(v) Export –Import policy (Exim policy)
The Industrial policy of the government covers
all those principles, policies, rules and procedures,
which direct and control the industrial enterprises of
It includes government policy in respect of public
It includes all those activities and interventions
that aim at smooth supply of credit to the business
and a boost to trade and industry.
Bank reserves. Etc…
Foreign investment policy
This policy aims at regulating the inflow of foreign
investment in various sectors for a firm.
Export–Import policy (Exim policy)
It aims at decreasing the gap between export and
The focus now-a-days lies on removing barriers and
controls and lowering the custom duties.
The social environment of business includes social
factors like customs, traditions, values, beliefs, poverty,
For example: During festive seasons there is an increase in the
demand for new clothes, sweets, fruits, flower, etc.
This includes the political system, the government
policies and attitude towards the business community
and the unionism.
Eg: Labour Union.
This refers to set of laws, regulations, which influence
the business organisations and their operations.
Every business organisation has to obey, and work
within the framework of the law.
Eg: Factory act 1948.
Domestic Business Environment
The domestic factors that affects the firm situated in a
Features D.Business environment
Business are carried out in home country only.
It depends on domestic culture of the people.
In case of monopoly, the firm can achieve large profit.
The legal factor do not affect more on domestic
Global Business Environment
•The Global Business Environment is that the business carried on globaly.It is
influenced by the World Trade Organisation, principles and agreements.
Features G.Business Environment
Doing or planning to expend, Business Globally
Each country or market was assumed to be difficult to
Global business mainly focused to get the Domestic
market of a country.
Domestic Environment is the first and foremost step
that is taken to establish a successful Global
environment.Once the domestic Business is successful
that will lead to a higher chances of being very
successful at the Global Level.The environment should
be properly utilized to get Positive results because over
Globalisation might lead to the destruction of the