1. BUSINESS ENVIRONMENT
ENVIRONMENT REFERS TO ALL
FACTORS WHICH HAS A
BEARING ON THE FUNCTIONING
OF A BUSINESS UNIT.
IT MAY BE INTERNAL AND
EXTERNAL

2. INTERNAL ENVIRONMENT
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Promoters & shareholders value
Mission /Objectives
Mgnt. Structure
Internal power relationship
Co. Image/Brand Image
R&D , Technology
Human Resources
Marketing Capabilities

3. EXTERNAL ENVIRONMENT
• 1.Micro/Task/Operating environment
• 2.Macro/General/Remote/Uncontrollable

4. EXTERNAL ENVIRONMENT
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Economic factors
Political environment
Social/Cultural factors
Demographic factors
Natural factors
Technological
Global factors

5. ECONOMIC ENVIRONMENT
• Recently it is complex. Determined
by govt, capital market, household
sector, global market etc. It consists
of economic conditions, economic
systems, economic policies,
economic growth, interest rates,
currency exchange rates

6. ECONOMIC CONDITIONS
• Determined by national income,
percapita income, economic resources,
distrn of income and assets, economic
development etc. business cycles and
economic growth are also important in
the eco.conditions and in turn
environment

7. ECONOMIC SYSTEM
• CAPITALIST (FREE MARKET ECONOMY)
• SOCIALIST/COMMUNIST(CENTRALLY
PLANNED)
• MIXED ECONOMIC SYSTEM – INDIA’s

8. ECONOMIC POLICIES
• The policies throuth:– Budgets
– Industrial regulations
– Economic Planning
– Business laws
– Industrial policy
– Demand and supply of goods
– Monetary policy
– Fiscal policy, Balance of payments, LPG

9. GOVTS REGULATE BUSI. THROUGH
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Factories Act 1948
Industrial dispute act 1947
FERA1947 --FEMA
Companies act 1956
Export import control act
Interest rate/borrowing rate Currency
exchange rate –Rupee value

10. MONETARY POLICY
• RBI’s steps to regulate & control the cost
and supply of money and credit , Credit
control, bank rate, open market
operation, CRR, SLR, qualitative
techniques of credit control etc.

11. FISCAL POLICY
• Policy regarding
– Taxation
– Public expenditure
– Public debt

12. POLITICAL ENVIRONMENT
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Legislature
Executive
Judiciary
Impact of defence and military policy, Political
stability, President’s rule, emergency,
philosophy of political parties, Foreign policy,
like allignment of non allignment policy, loan
from IMF, ADB, ASSEAN agreement etc.