1.

) Definition

The combination of internal and external factors that influence a company's operating situation. The business environment can include factors such as: clients and suppliers; its competition and owners; improvements in technology; laws and government activities; and market, social and economic trends. Business as we know is an economic activity of generation income through buying and selling, manufacturing and rendering auxiliary services to trade. Thus, business in a system made up of all environmental which require the business to adopt new strategy. Business environment refers to these surroundings of business enterprise which affect its operation and determines its effectiveness. Now-a-days modern business is not independent. t cannot work in isolation. t is the economic and social organ of the society. !o it must achieve its economic goal. t cannot ignore the interest of the society. The government of the country has also the interest in business affairs. t enacts legislation, formulates business policies and controls business in the best interest of people.

In the words of Keith Davis, 'Business environment is the aggregate of all conditions, events and influences that surround and affect it." Importance of Business Environment he competent and successful management must !e capa!le of adapting to the environment. he "nowledge of the environment helps in# $apitali%ing emerging opportunities &ctivating management Image !uilding Basis of strateg' Intellectual stimulation $ontinuous learning Capitalizing early opportunities: Environment friendly enterprise are the first movers to avail of the existing opportunities of resources to grab the market. These enterprises do not loose emerging opportunities to their competitors. For example: Asian pains have been loosing their market to ood lass !erolac because of their failure to match their technology "ith Cathodic Electro #eposition $CE#% technology& "hich helped the competitor to grab the opportunity of meeting '() paint re*uirement of +aruti ,dyog.

&ctivating management to changing needs# he "nowledge of environmental changes sensiti%es the management to ma"e strateg' to cope with the emerging pro!lems. (or e)ample# he turmoil in the *++, resulted in the loss of mar"et to man' companies li"e -oechst. In order to meet the situation -oechst divested its manufacturing facilit' in favors of I.$& /a!oratories /td. -mage building: Environmental understanding by the management builds image of the company in the minds of the people. They feel that the company is sensitive and responsive to their needs and problems. For example: . E is said to be image conscious. -t divested its computer and air.conditioning business because they could not attain /st or 0nd position in the business as per their policy. !o" they are snickering to out sourcing in -ndia& aircraft engineering& plastic etc. Basis of strateg'# +trategists can gather 0ualitative information regarding !usiness environment and utili%ing them in formulating effective plants. (or e)ample# I $ -otels foresaw !right opportunities in the travel and tourism industr' and started !uilding hotels in India and a!road. -ntellectual stimulation: 1no"ledge of environment changes provides intellectual stimulation to planners and decision.making authorities. They can do it by paying more attention to people by listening to their problems and suggestion. They can also eliminate procedure complexities in a visible "ay. The drastic and dynamic steps "ill definitely keep the company better placed. $ontinuous learning# Environmental scanning provides continuing !road !ased learning to is e)ecutives. ,eliance adopted the polic' of decentrali%ation and empowered their managers to close the deal themselves even regarding price. In 1112 managers were re0uire to chat with the proprietress on alternate da's for 13 minutes. he process made them so competent that now the managers are re0uired to chat onl' three times in a month. It shows that continuous learning made the managers competent to ta"e independent decision.

4.)definition +imilarities and differences among emplo'ees in terms of age, cultural !ac"ground, ph'sical a!ilities and disa!ilities, race, religion, se), and se)ual orientation. 5or"force Diversit'
"ne of our greatest strengths is the diversity of our workforce, with men and women of many nationalities and backgrounds working together and sharing common ob#ectives. !chlumberger does not have a $nationality$ which describes its culture, but operates in a truly global fashion throughout the world. %s a company, we encourage fair employment practices worldwide and offer equal opportunities to all our employees. &e also try to take family considerations into account in any decisions about personnel matters or assignments.

'ultiple (erspectives &orkers from various cultural and social backgrounds allow for multiple perspectives on internal and external issues. &hen a new policy is presented, for example, a more diverse pool of employees can advise management if something appears as insensitive. % broader array of perspectives also can break up group think. n their )**+ article for the (ersonality and !ocial (sychology Bulletin, , s the (ain &orth the -ain. The %dvantages and /iabilities of %greeing &ith !ocially 0istinct Newcomers,, psychologists 1atherine &. (hillips, 1atie %. /il#enquist and 'argaret %. Neale say that more diverse groups are more likely to bring new ideas to the table. % Better Talent (ool By broadening its reach, a company looking to hire new talent stands a better chance of finding top-quality employees when it recruits from a more diverse set of candidates. % company staffed with workers from various cultural backgrounds is better able to communicate with companies and clients from different countries and areas. (hillips and her collaborators even found that companies comprised of employees who grew up in different states can increase a group$s output and raise the competitive bar. 2conomic -rowth The 3enter for %merican (rogress states that the 4nited !tates$ economy -- particularly at the entrepreneurial level -- moves in lock

step with the number of women, minorities and gay and transgender workers entering the workforce. The National %ssociation of &omen Business "wners reported, for example, that minority women owned 5.+ million firms, employed 5.) million people and generated 6578 billion in revenue annually, as of )**7. /atina-owned businesses alone have generated 688.9 billion between )**) and )*5), according to the National &omen$s Business 3ouncil. ncreased 3reativity and (roductivity ,0iversity in the &orkplace: Benefits, 3hallenges, and the ;equired 'anagerial Tools,, a report published in )**< by the 4niversity of =lorida, reveals that while staffs tend to act as a unit for the company, simply respecting individual differences can increase productivity. !imilarly, the study by (hillips and company finds that diverse groups tend to devise better solutions, even when individuals believe they do not work well together. !he suggests that a degree of discomfort can improve results compared to ideas devised by a more familiar, comfortable and homogeneous group.