business Business is an economic activity, which is related with continuous and regular production and distribution of goods and services for satisfying human wants under uncertain market conditions Nature of business Earning profit Link between buyer & seller Exchange of goods & Services(consumer&producer) Creation of jobs Better quality of life Economic growth Marketing & distribution of goods Social obligations Risks & uncertaninties significance of business Improve standard of living Efficient utilisation of resources Better quality and large variety of goods Creates utilities (wants) Employment opportunities Workers welfare Business environment It aggregate of all conditions, events and influence that surrounds and affect it
Important factors- socio-economic,
technological, supplier, competitons, government Nature of business environment 1. Environment is inseparable part of business 2. Environment is dynamic 3. Business lacks control over Environment 4. Internal & external Environment factors 5. Environment is complex 6. Opportunities and obstacles 7. Long lasting impact 8. uncertainty Basic of business Environment Internal Environment External Environment Internal Environment Financial resources Physical & human resources Objectives of business Management policies Morale & commitment of human resource Work Environment Brand & corporate image Labour management relationship Technological and R&D Promoters' vision Marketing resource External Environment A) Micro / Operating Environment 1. Suppliers 2. Customers 3. Market intermediaries 4. Competitors 5. public
b) Macro / general Environment
1. Economic 2. Political 3. Socio- cultural 4. Technological 5. Demographic 6. global Political Environment It related to the management of public affairs that impact the business of the organisation
It primary factor economic development for
stable, honest, efficient and dynamic Political forces affecting business Government laws National defense posture Foreign policy Political stability Political organisation Political institutions 1. Legislature : parliament president ; lok Sabha, Rajya sabha- law i) Delegated legislature: RBI,SEBI,Election ii) Ordinances: (limited time) 2. Executive :council of ministers(dept) board : railway board 3. judiciary: supreme court-high court-district courts Political system It is a system of political and government Types 1. Libertarian political system open system 2. Authoritarian political system mixed system 3. Totalitarian political system closed system Most political system is mixture of types Anarchy no law Dictatorship Autocracy tribal leader Theocracy religion leader Monarchy king Democracy Influence of political system in business Political ideology of government Political stability in the country Relation of government with other countries Defense and military policy Thinking of opposition parties Policies towards MNC Government control and restrictions Treatments of foreign investors Business & society Factors affecting business society relationship Changing societal expectations Ethical reasoning and actions Globalization Government regulation of business natural environment New technology Social objective of business Supply of quality goods & services Adoption of fair trade practices Economic well being of the employees Social & psychological satisfaction of employees Development of human resources Well being of economically backward people Creation of employment Promotion of social justice Contribute to revenue of the country Self sufficiency and export promotion Social responsibility of business The personal obligation of every one as he acts for his own interest to assure that the rights and legitimate interests of all others are not impinged Social responsibility of business 1. Responsibility towards shareholders/owners 2. Responsibility towards employees/workers 3. Responsibility towards customer 4. Responsibility suppliers 5. Responsibility towards creditors 6. Responsibility towards competitors 7. Responsibility towards government 8. Responsibility towards society 1. Responsibility towards shareholders /owners Run the business efficiently Utilisation of capital and other resources Growth Fair return of capital invested 2. Responsibility towards employees or workers Provide wages Safety standards Workers compensation insurance Positive working climate 3. Responsibility towards customers Quality Fair prices Honest advertising After sales services R&D Consumer safety Regular supply Attend complaints 4. Responsibility towards suppliers Regular orders Fair terms and conditions Reasonable credit period Payment of dues Future development plans 5. Responsibility towards creditors Financial health Reasonable interest Health atmosphere 6. Responsibility towards competitors Not to offer high sales commission to distributors, agents Not to offer to customer heavy discount/ free products Not to defame competitors withadvertisements 7. Responsibility towards government Pay taxes Environmental regulations Labor laws Avoid restrictive trade practices Financial disclosure Avoid corruption 8. Responsibility towards society Protection of environment Reasonable use of resources Reservation for weaker section No participation in anti-social activities Development of backward region Financial assistance Employment generation Advantage of social Responsibility of business Changed public expectations Better environment of business Public image Balance of responsibility with power Business has resources Moral responsibility Disadvantage of social Responsibility of business Profit max Society cost Lack of social skills Social overhead cost Lack of accountability Lack of broad support Social Responsibility initiatives in india Tata group Infosys Mahindra & Mahindra ITC ONGC Pepsico Cognizant Bharat Petroleum Maruti Udyog Hero group Reliance Group SAIL Environmental pollution and control Environment pollution means any solid, liquid or gaseous substances present in such concentration as may be or tend to be injurious to environment and human. Causes of environmental pollution 1. Nature sources of pollution a) Volcanic eruptions b) Forest fires c) Dust storms d) Bacteria, spores, pollens e) Decay organic 2. Man made sources a) Industries b) Automobiles c) Over population d) Deforestation e) Nuclear explosions f) Construction of roads, dams g) Wars h) Fertilizers i) mining Types of pollution & controls Air pollution how Soil pollution Water pollution Noise pollution Marine pollution Nuclear pollution Thermal pollution Business & culture Culture consist of patterns, explicit and implicit of and for behaviour acquired and transmitted by symbols, constituting the distinctive achievement of human groups, traditional ideas, values, & cultural system. culture Language Norms Values Religions & beliefs Social collectives Status & roles Impact of culture on business Religion & custom Change in preferences- socio-culture Change in demographics Marketing Advertising techniques Internal environment Business & government Responsibilities of business towards government 1. Obey laws 2. Taxes 3. Social responsibilities 4. Providing inputs to the government 5. Government contracts 6. Government services 7. Active participation in politics Responsibilities of government towards business 1. Proper laws 2. Maintenance of law & order 3. Providing money & credit 4. Building infrastructure 5. Research basic, commercial 6. Providing information 7. Preserving competition 8. Awarding patent and copy rights 9. Protections Role of government in business Regulatory role of government Promotional role of government Entrepreneurial role of government Planning role of government End of unit 1