unit 2 business enviornment

1. UNIT 2
Overview of political environment
S R TRIPATHI (mba)

2. POLITICAL ENVIRONMENT
 Governments actions which affects the operations
of a company or business.
 Actions may be on local, regional, national or
international levels.
 To see how it affects their company
 It constitute external constraints upon a business
and its activity
 Factors includes laws and regulations that either
force a business to pursue certain actions

3. MULTIPLICITY OF POLITICAL ENVIRONMENT
 Foreign politics
 Domestics politics
 International politics

4. FACTORS CONTRIBUTING TO POLITICAL
INSTABILITY
 Social unrest
 Attitude of nationals
 Policies of the host government

5. INTERFACE OF POLITICS WITH BUSINESS
 Political intervention
 Expropriation
 Domestication
 Others means of intervention
 Exchange control
 Import restriction
 Market control
 Tax control
 Price control
 Labor restrictions

6. SOCIO- CULTURAL ENVIRONMENT
Social class is defined as the hierarchical division of
society into relatively homogenous groups on the
basis of value , attitudes and lifestyles.
Social class membership provides the frame of
references for the development of consumer
behavior and attitudes.

7. FACTORS THAT AFFECT BUSINESS
 Social concerns such as the role of business in
society
 Social attitudes and values such as the society’s
expectation from business
 Family structures and changes in them
 Role of women in society and their status in it
 Educational levels and gender inequality in the
levels
 Awareness and work ethics

8. CULTURAL ENVIRONMENT
 Cultural norms largely drive consumer needs and
buyer behavior. Knowledge of the cultural
environment is important to understand the
business environment in its totality.

9. TECHNOLOGICAL AND GLOBAL ENVIRONMENT
 The technological environment comprises those
factors related to applied knowledge and materials
and machines used in the production of goods and
services .
 Factors and influences operating in technological
environment:
 Sources of technology
 Technology development
 Impact of technology
 Communication and infrastructural technology in
management.

10. LEGAL ENVIRONMENT
 Organization being corporate entities, have to abide
by the law of the hand
 In order to control foreign business in their
economics, host country enact laws which take
several forms such as tariffs, antidumping laws,
export/import licensing investment regulations, legal
incentives and restrictive trading laws

11. MULTIPLICITY OF LEGAL ENVIRONMENT
 As with political environment
 Domestic legal environment
 Foreign legal environment
 International legal environment

12. MRTP
 Monopolies and Restrictive Trade Practices Act
enacted in 1969, aims to prevent concentration of
economic power to common detriment, provide for
control of monopolies and probation of monopolistic
restrictive trade practice and protect consumer
interest

13. OBJECTIVES
 Regulating monopolies and preventing
 Prohibit of restrictive and unfair trade practices
 Controlling monopolistic trade practices
 Regulating restrictive and unfair trade

14. SEBI
 Securities and exchange board of India
Is the regulator for the securities market in India. It
was established in year 1988 and given statutory
powers on 12 April 1992 through the SEBI act,
1992.
 To protect the interests of investors in securities
and to promote the developments of and to regulate
the securities market and for matters connected
therewith or incidental thereto.

15. FEMA
 Foreign Exchange Management Act, 1999
 Act to consolidate and amend the law relating to
foreign exchange
 Objective facilitating external trade and payments
and promoting the orderly development and
maintenance of foreign exchange in India

16. OBJECTIVE OF FEMA
 To facilitate external trade and payments
 Maintenance of foreign exchange market
 The buying and selling of foreign currency and
other debt instruments by businesses, individuals
and governments happens in the foreign exchange
market
 To impose restrictions

17. CONSUMER PROTECTION ACT
 The consumer protection act, 1986
 Aims at better protection of the interests of the
consumers
 Applies to all goods and services unless specifically
exempted by central govt

18. ENSHRINES THE FOLLOWING RIGHTS OF A
CONSUMER
 The right to protection against the marketing of
goods that are harmful
 The right to information
 The right to be heard and to be assured that
consumer’s interest
 The right to seek redressal against unfair trade
practices
 The right to consumer education

19. THE CHANGING DIMENSIONS OF THESE LAWS
AND THEIR IMPACT
 Policy
 Union budget
 Growth
 Strengthen
 Control
 Marketing decision
 Affect organisation