OCM 2 Marks Each

• Globalization plays a major role in development of a country.
• Economy of an undeveloped country or an underdeveloped country can be boosted through globalization. On the other hand, such countries can get the benefit of innovative and technologically advanced products of developed countries. This way economy of developed countries, also grow.
• Globalization enables large scale production
• Consumers get improvised, technically upgraded product at an economical price.
• Opportunities of employment generation
• Consumers get quality products and service at a low price
• Infrastructure facilities rise rapidly
• Education level increases, industries grow, unemployment reduces

The transfer of control and management of public sector enterprise to private sector or say, the process of passing on the ownership and management of public sector unit to private firms is called privatization.

The movement of business and trade from a controlled to an open and free system is called liberalization.

Factors related to government and financial ideologies of the ruling party.

Social factors include religion, caste, sect, social norms, ideologies, etc. that exists in a particular society.

Continuous study of business environment is necessary to understand the condition of capital market and to know the future demand of the product.

Meaning:

• Business environment includes economic, social, cultural, technological, political and legal factors. Beside some group such as customers, employees, competitors, material suppliers etc are included.
• Internal factors :
• Objectives of business.
• Employees
• Managerial structure
• External factors :

• Economic factors
• Rate of economic development
• Sectoral development and inter – sectoral connections
• National income and per capita income
• Distribution of national income
• Finance policy
• Political policy
• Other factors.
• Social factors
• Cultural factors
• Technological factors
• Political factors
• Legal factors

Government took several steps to make structure under liberalization the tax structure simpler and transparent. Procedure for sales tax and excise duty were simplified.

Factors related to government and financial reference to business ideologies of the ruling party are known as political factors.

There is a continuous change and updation in technology so as to provide better, faster and modern products and services to consumers. To meet these changes the manufacturer have to change their production patterns, machines, etc. This gives rise to new and dynamic business environment.

Factors like, traditions, practices, life style, habits etc. are part of cultural factors.

Groups of people, social institutions, social traditions, etc.

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence national economy.

If the national income rises but the population does not rise proportionately, the rate of rise in per capita income will be more than the rate of rise in national income.

As the country develops, the business environment rises and shifts from agriculture to industries and finally to service.

In agrarian economy, development of agriculture leads to the overall development of the economy. Majority of the resources are used in primary sector and hence the industrial growth is quite slow.

In a developing country, the national income and per capita income show positive growth. Moreover, there is also a rising trend in the use of available resources and the standard of living.

In a developed country, the level of gross national income and per capita income is high and all the available resources are fully developed.

Mixed economy is a combination of socialist and capitalist economy. Under this system, the country allows businesses of certain sectors to do business freely whereas certain sectors are controlled by the government itself.

In capitalist system the country adopts a policy of free trade. In this system, the government does not interfere much. It allows the producer to take all the major decisions with respect to production and distribution.

The organized way in which a country allocates resources and distributes goods and services is known as the economic system of that nation.

Economic factors are the fundamental data about the market and economy taken into consideration when an investment or business value is calculated.

The factors which cannot be controlled by the managerial personnel of the organization are called external factors of business environment.

The factors which can mostly be controlled by the managerial personnel of the organization are called internal factors of business environment.

The business environment has become quite dynamic. Every now and then there are new changes that come up in the market. Hence,….

Producing vehicles that run on alternate energy such as electrical or solar.

Sensitivity of management means that in today’s time the management has become quite sensitive towards the changes that take place in the business environment. This helps them to retain profits.

By entering the market early, the producer may update products well before his competitors, and earn high profit.

The environment created by the group of factors such as economic, social, legal, political, etc. that directly or indirectly affect the business is called business environment.

In the initial stage, the companies of developed countries started their business in other countries. There after development countries invited other companies to do business in their countries. Companies make their services reach for and wide in the world.

World has become a global village as service sector has developed very fast due to globalization. Baking insurance, education, communication, transport sector has crossed geographical and political boundaries of the country and removed all the limitations.

Causes for the inefficiency of public sector are :

• Bureaucracy.
• Old technology.
• Corruption and bribe.
• Luck of accountability.
• Increasing influence of employees union.
• Political interference.

To attract foreign business men and investors as part of liberalization, government has extended the limit to invest maximum in india industries. Moreover various types of economic and non-economic incentives and economic relaxations are permitted.

Digging of mineral wealth is used in industrial sector. For production of many things industrial sector performs some process and make usable products. Human force id associated with the production of many things. As a result process of innovation becomes speedy which increases opportunities of business.

When majority of the people are employed in agro sector with the development of agro sector, there is considerable increase in gross development and most of the energy of the nation is spent in primary things then only it is said that agriculture sector is important in the country.

It is an under development country where income is very low and its growth rate is ‘very low’, which weakens the opportunities of development and as a result of which available resources are not fully utilized.

Developing country is such country in which national income can per capita income are continuously increasing and use in maximum capacity and all these things motivate speedy development of trade and commerce.

It is a development country where the rate of national income and per capita income is continuously increasing ans resources available are use in maximum capacity and all these things motivate speedy development of trade and commerce.

After independence government started manufacturing required material and services for creating infrastructure facilities and as per the requirement in our economy.

For tourism purpose, education, to purchase property in foreign countries foreign exchange is made easy to avail, under certain conditions.

To simplify the tax structure and to make it transparent the government has already started the process of simplification of sales tax and excise. Along with it’s regulations of tax structure are relaxed. Procedure of the enforcement of goods and service tax is under process.

Political factors influencing business environment are government’s attitude towards industries, canvassing by the interested parties, framing of laws and their enforcement and government’s interest in doing so, ruling party’s ideology etc.

Government is aware of the development of society, development of business and social welfare are into related. Government is aware of just and fair distribution of good result of business and it does not let society suffer adverse result of business.