Question

Explain various types of environment related decisions taken in business with examples.

Answer 1

Answer:

Explanation:The Environment in Business Decision Making

Federal agencies should substantially expand support for research to understand the influence of environmental considerations in business decisions. This research agenda would include studies particularly on (a) environmental performance and competitive advantage; (b) customer and investor demand for environmental performance by businesses, especially in an increasingly global economic system; (c) supply chains and production networks; (d) sectoral standard-setting; (e) decision factors in industrial ecology; (f) environmental accounting and disclosure practices; and (g) government policy influences on business decision making.

THE RESEARCH NEED

Both in the United States and worldwide, business decisions are among the dominant influences shaping environmental conditions: what materials, energy, and organisms will be extracted from the environment, in what quantities and where, how they will be transported and distributed, how landscapes and ecosystems will be transformed in doing so, and what will be done to minimize and mitigate the impacts. Business decisions also influence consumer choices, direct a large fraction of environmental research, and determine much of the development and diffusion of technological innovations.

The cumulative effect of businesses’ decisions creates many commitments that are difficult if not impossible to reverse in the short term. Consumer preferences influence these decisions in some cases, but only to the extent that they strongly affect the ability to generate profit. Government

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Suggested Citation:"4 The Environment in Business Decision Making." National Research Council. 2005. Decision Making for the Environment: Social and Behavioral Science Research Priorities. Washington, DC: The National Academies Press. doi: 10.17226/11186. ×

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policies also influence business decisions—through regulatory mandates, property rights and liability rules, disclosure mandates, taxes and subsidies, procurement criteria, and other policies—but the primary initiative lies with businesses themselves.

To date, however, the role of environmental considerations in business decision making has been seriously understudied. The dominant emphasis of environmental research in the past has been in the natural and health sciences and engineering, addressing such issues as the health risks of particular substances, the functioning of environmental processes and ecosystems and the impacts of changes in them, and technologies for pollution control.

Environmental research in the social sciences to date has concentrated primarily on economics, including the measurement of economic costs and benefits of pollution control to society and the relative efficiency of regulatory mandates versus market-oriented instruments of environmental policy (Stavins, 2003); on government decision making; and to a lesser extent on individual and household environmental decision making, such as energy conservation, recycling, and environmental considerations in consumer behavior (Gardner and Stern, 2002).

Over the past decade, a modest but growing body of research has begun to address environmental considerations in business decision-making (see Appendix C for a review). This research has consisted mainly of a group of literatures associated with established business research fields: environmental considerations in strategic management decisions, in operations, in organizational behavior, in marketing, in accounting, in finance, and in government policies affecting business. Two arguably new research areas also have emerged: one is the study of life-cycle analysis and industrial ecology (the study of flows of energy and materials through systems of industrial production, consumption, and waste disposal), although to date this area has been influenced more by engineers than by the social sciences. The other is the study of supply or commodity chains. Each of these areas, as well as several others, offers promising opportunities for further research.

Answer 2

Answer:this is the correct answer

Explanation:there are three types of environment in which decisions are made:

1.)certainity

In this type of decision making environment, there is only one type of event that can take place. It is very difficult to find complete certainty in most of the business decisions. However, in many routine type of decisions, almost complete certainty can be noticed. These decisions, generally, are of very little significance to the success of business.

2.)uncertainity

In the environment of uncertainty, more than one type of event can take place and the decision maker is completely in dark regarding the event that is likely to take place. The decision maker is not in a position, even to assign the probabilities of hap­pening of the events.

Such situations generally arise in cases where happening of the event is determined by external factors. For example, demand for the product, moves of competitors, etc. are the factors that involve uncertainty.

3.)risk

Under the condition of risk, there are more than one possi­ble events that can take place. However, the decision maker has adequate information to assign probability to the happening or non- happening of each possible event. Such information is generally based on the past experience.

Virtually, every decision in a modern business enterprise is based on interplay of a number of factors. New tools of analysis of such decision making situations are being developed. These tools include risk analysis, decision trees and preference theory.

Modern infor­mation systems help in using these techniques for decision making under conditions of uncertainty and risk.