Environmental appraisal


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Environmental appraisal

  1. 1. Submitted To Prof. S.K. Srivastava Presentation on Environmental Appraisal Submitted By Sadhika Katiyar Rupesh Kumar Mishra Gaurav Katiyar Ashish Chandra Namam Tilak Diwedi Saurabh Singh Rajpoot Pranay Ranjan
  2. 2. What is environment  Environment means the surroundings, external objects, influences or circumstances under which someone or something exists.  The environment of any organization is the aggregate of all conditions, events and influences that surround and affect it
  3. 3. Characteristics of environment  Environment is complex: The environment consist of number of factors, events, conditions and influences arising from different sources. All these do not exist in isolation but interact with each other to create an entirely new set of influences.  Environment is dynamic: The environment is consistently changing in nature. Due to many and varied influence operating, there is dynamism in the environment causing it to continuously change its shape and character.
  4. 4.  Environment is multi faceted: What shape and character an environment assumes depends on perception of observer. A particular change in environment or a new development may be viewed differently by different observers.  Environment has a far reaching impact on organizations. The growth and profitability of an organization depends critically on environment in which it exists. Any environmental change has an impact on organization in several different ways.
  5. 5. Types of Business Environment Business Environment Internal Environment External Environment
  7. 7. 1. Structure 2. Operation procedure 3. Finance 4. Human resource 5. Marketing approach 6. R & D etc.
  9. 9. External Environment Micro Macro
  10. 10. Micro Environment  Shareholders  Employees  Suppliers  Banks  Customers  Distribution channels
  11. 11. Macro Environment  Socio cultural  Technological capitalist  Economic socialist  Political  International etc.
  12. 12. Role of government in Business Environment Regulatory Role government makes the rules and regulation regarding the licensing , manufacturing , labor welfare policies etc. “When government withdraws some strictness on regulatory function , it is called Liberalization.” Participative Role government be the part of various operational fields likes banks , railway , PSU etc.. “when government allows to private sector to be part of some specific operational areas , it is called privatization.”
  13. 13.  Protective Role government makes some specific rules in forms of various taxes and restrictions to protect the domestic industry. “when government withdraws some restrictions to attract the FDI , FII and providing best product , it is called Globalization.”
  14. 14. Environmental sectors 1. Economic environment 2. International Environment 3. Market Environment 4. Political Environment 5. Regulatory Environment 6. Socio Cultural Environment 7. Supplier Environment 8. Technological Environment
  15. 15. Economic Environment The economic environment consists of macro level factors related to means of production and distribution of wealth that have on business of organization. Some important factors are 1. Economic stage at which a country exists 2. Economic structure adopted 3. Economic policies 4. Economic planning 5. Infrastructural factors
  16. 16. International Environment The international environment consists of all those factors that operate at transnational, cross cultural and across border level, having impact on business of organization. 1. Globalization, its process, content and direction 2. Global economic forces, block and forum 3. Global trade and commerce, its process and trend 4. Global financial system, sources of financing 5. Geopolitical situation, equation, alliances and strategic interests of nations
  17. 17. Market Environment The market environment consist of factors related to group and other organization that compete with and have an impact on an organizations market. Some factors are as below : 1. Customer or client factors 2. Product factors such as demand , image 3. Marketing intermediary factors 4. Competitor-related factors
  18. 18. Political Environment The political environment consist of factors related to management of public affairs and impact on business organization. 1. The political system and its features like nature of political system 2. The political structure, its goals and stability 3. Political processes like operation of party system, elections 4. Political philosophy, govt role in business etc
  19. 19. Regulatory environment The regulatory environment consists of factors related to planning, promotion and regulation of economic activities. 1. The constitutional framework , directive principles 2. Policies related to licensing, monopolies and foreign investment 3. Policies related to distribution and pricing and control 4. Policies related to import and exports
  20. 20. Socio Cultural environment The socio cultural environment consists of factor related to human relationship within society, the development, forms and function of such relationship and learned and shared behavior of groups of human being having a bearing in business of organization
  21. 21. Some of important factors and influences operating in social environment 1. Demographic characteristics like population, density 2. Socio cultural attitudes and values such as expectation of society from business, social custom 3. Family structure and changes in it 4. Role and position of men, women, children and aged in family and society
  22. 22. Supplier environment The supplier environment consists of factors related to cost, reliability and availability of factors of production or services that have impact on business of an organization Some important factors are 1. Cost availability and continuity of supply of raw material 2. Cost availability of finance 3. Cost , reliability and availability of energy used in production 4. Cost ,availability and dependability of human resource
  23. 23. Technological Environment The technological environment consist of those factors related to knowledge applied and material and machines used in production of goods and services that have impact on business of an organization Some important factors are 1. Sources of technology like company source , external sources and foreign sources 2. Technological development, stages of development change and rate of change of technology 3. Communication and infrastructural technology in management
  24. 24. Environmental scanning Environmental scanning can be defined as process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business for purpose of taking strategic decisions
  25. 25. Factors to be considered for scanning The external environment in which an organization exists consists of a bewildering variety of factors. These are as below: 1. Events are important and specific occurrences taking place in different environmental sectors 2. Trends are general tendencies or the courses action along which events take place. 3. Issues are current concerns that arise in response to events and trends. 4. Expectations are demands made by interested groups in light of their concern for issues.
  26. 26. Approaches to environmental scanning Kubr has suggested three approaches which could be adopted for sorting out information for environmental scanning These three approaches are Systematic approaches Ad hoc approach Processed-form approach
  27. 27. Systematic Approach Under this approach, information for environmental scanning is collected systematically. Information related to markets and customers, changes in legislation and regulations that have a direct impact on organizations activities etc. It could be collected continuously to monitor changes and take the relevant factors into account. Continuously updating such information is necessary not only for strategic management but also for operational activities
  28. 28. Adhoc Approach Using this approach an organization may conduct special service and studies to deal with specific environmental issues from time to time. Such studies may be conducted for instance when an organization has to undertake special project, evaluate existing strategies or devise new strategies.
  29. 29. Processed-Form Approach For adopting this approach the organization uses information in processed form, available from different sources both inside and outside the organization. When an organization uses information supplied by Govt. agencies or private institutions, it uses secondary source of data and the information is available in processed form.
  32. 32.  Strength: It is an inherent capacity which an organization can use to gain strategic advantage. Eg good reputation among customers, resources, assets, people, experience.
  33. 33.  Weakness: It is an inherent limitation or constraint which creates strategic disadvantages. Eg gaps in capabilities, financial deadlines, low morale etc
  35. 35.  Opportunity: It is a favorable condition in organization’s environment which enables it to consolidate and strengthen its position. Eg economic boom, favorable demographic shifts, arrival of new technologies etc
  36. 36.  Threat: It is an unfavorable condition in organization’s environment which creates a risk for, or causes damage to organization. Eg economic downturn, demographic shift etc
  37. 37. Benefits of SWOT analysis  Simple to use  Low cost  Flexible and can be adapted to varying situations  Leads to clarification of issue  Development of goal alternatives  Useful as a starting point for strategic analysis