BUSINESS ENVIRONMENT Nature And Importance Of Business Ethics

BUSINESS ENVIRONMENT

Nature And Importance Of Business Ethics: Environment literally means the surrounding objects influences or circumstances that encompass someone or something within which a person exists. “The suar toatal of all the aggregate conditions, events and influences that affect it”. Business environment exhibits and displays many features since it is complex, dynamic and multi-facilitated. The effects of the environment are also very far reading. Acoording to Arthur M. Weimer, “Business environment encompasses the ‘climte’ or set of conditions in which business operations are conducted”. B. O. Wheeler defines it as “The total of all things external to firms and industries which affect their organ and operation”. It follows that Business Environment refers to all factors that have an effect on business decisions, performance and organisation.

Just as an environment surrounds anything, business environment is that which surrounds ab business. It is dynamic, in the sense it keeps changing. Since it is composed of many factors, it is important for a co. To study and monitor its environment carefully. The changers in the environment may be good or bad for a particular business. They can effect the business in a positive or a negative way. It becomes essential to monitor the environment, especially the external, uncontrollable part of the environment. The surrounding environment can be split into two: 1. Internal Environment 2. External Environment

INTERNAL EXTERNAL Health Parents Education Wealth Values Family oppourtunities Place of Residence Facilities Available Culture of the place Societal norms Encouragement from outside parties Appearence Hobbies Interests

BUSINESS ENVIRONMENT Internal Factors External Factors Micro Environment Macro Environment INTERNAL FACTORS: § The objectives of the business: These are divided by the business itself. They plan about what they want to achieve. § The people employed in the business: Th eemployees both white and blue coloured are a very important asset of any company.

§ The co. Image: Each human being occupies a certain image in the middle of others. § The management: The management is the driving force which decides the pace and direction of growth. § The value systems of the organ: The values refers to the ethics of business as followed by an organ. External Factors: These are not part of the internal system of the company and are really the actual environment. It can be divided into micro and macro environment we can suggest the term ‘general environment’ to denote the external environment. The various systems of the external environment are characterised by the different degrees of complexity arising out of diversity, and uncertainity in their texture and behaviour.

Micro Environment: These factors are present in the immediate environment of a company. They are more controllable than the larger macro factors. The micro factors influence a firm closely, regularly, and directl. They affect the performance of a company as they are ‘close’ to the organ. The micro environment factors are, Ø Customers: The prime factor for any business is to attract and retain customers. This is to ensure their own long-term profitability and existence in the nkt-changing tastes and preferences of the customer should not only be observed as they happen but forecasted before and necessary correctionsshould be made. Ø Suppliers: An important factor in the micro environmentis the supplier. Ø MKA Structure: These are the middlemen who form part of the dtn. Channel those who help reach the pdt/service to the ultimate consumer.

Macro Environment: The macro environment is the larger, uncontrollable environment consisting of societal forces that affect at the other environments. This environment becomes crucially important to understand study for the purpose strategic planning and decision-making. It has broader dimensions than the micro environment. Macro environment factors are, Ø Econic Environment: This consists of macro level parameters related to the areas of pdn and dtn of wealth that have an impact on the business of an organ. Ø The central planning mechanism eg. 5 year planning in INDIA. Ø Economic policies of the government eg. industrial policy, monetary policy, etc. . , Ø The demand dynamics of the pdts of the firm. Ø Conditions in the related industries. Ø The general economic condition in the region.

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