Explain with example the various dimensions of business environment.
Answers
Explanation:
Dimensions of business environment that influences the performance of many firms are: 1. Economic Environment 2. Social Environment 3. Technological Environment 4. Political Environment 5. Legal Environment!
The Dimensions or the factors constituting the business environment include political, social, technological, legal and economic factors which are considered important for taking decisions and for improving the operations of a firm.
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These are a part of general environment which influences the performance of many firms at the same time.
1. Economic Environment:
Economic Environment consists of factors like inflation rates, interest rates, consumers’ incomes, economic policies, market conditions etc. which affect the performance of a business firm.
(a) Interest Rates:
Changes in the interest rates greatly affect the demand for goods and services. For example, low long term rates on home loans are beneficial for banks and consumers both.
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(b) Consumer Income:
Increase in the incomes of the consumers leads to increase in their purchasing power. Hence, demand for goods and services rises.
(c) Inflation Rate:
High inflation rate increases the cost of production and hence puts constraints on firms.
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Economic Environment is fully regulated by RBI (Reserve Bank of India). RBI influences the interest rate in the country, has full control on the flow of money in the economy. It also regulates the working of all banks in India.
Following are the main aspects of Economic Environment:
(i) The role of public and private sectors in the existing structure of the economy.
(ii) The rate of increase in GNP and per capita income both at current and constant prices.
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(iii) Amount of exports and imports of different products.
(iv) Increase in transportation and communication facilities.
(v) Trends in agricultural and industrial production.
(vi) Amount of savings and investments.
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(vii) Internal as well as external public debts.
(viii) Nature of money supply in the economy.
(ix) Planned outlay in private and public sector.
(x) Balance of payments and changes in foreign exchange reserves.
2. Social Environment:
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Social environment implies traditions, literacy rates, educational levels, values, customs, lifestyle, demographic distribution and other characteristics of the society in which the organization exists.
Traditions mean customs or social practices that have passed on from one generation to another e.g. celebration of festivals (Diwali, X’ mas, Gurpurab, Id etc.) gives significant financial opportunity to many businesses like sweets’ manufacturers, card campaigns, companies dealing in Gift products etc. Values mean standards that a society holds in high esteem e.g., freedom, social justice, equal opportunities etc. which are cherished by us all.
Changes in social environment affect the demand for a product, supply of labour and capital. If a business fails to adapt to such changes, its survival becomes difficult. Cooperation between business and society can make business boom (WIN-WIN) whereas confrontation between them may lead to disaster (LOSS-LOSS).
Any business is a part of the society in which it operates. The buying and consumption habits of the people, their languages, customers’ preferences/tastes etc. are the factors that influence the business. Businessmen should be alert enough to visualize the factors that directly or indirectly affect their organization.
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Cooperation between business and society will see business boom and will help in the growth of professional managers as well as the country whereas failure of any business organization in adapting itself to changes in the social environment will lead to dissatisfaction amongst its customers and rejection)of its products. This shift of demand can ever endanger the very survival of that business.
For example, equal pay for male and female workers, demand for reservation in jobs for minorities and women etc. are examples of social need that organisation have to take care of.
Main Aspects of Social Environment:
(i) People’s attitudes towards new products or improvements in old products, lifestyles, occupational distribution etc.
(ii) Consumption habits of the people.
(iii) Composition of family.
(iv) Life expectancies.
(v) Quality of life.
(vi) System of education and rate of literacy.
(vii) Presence of women workers.
(viii) Shifts in populations
(ix) Birth and Death rates.
(x) Expectations from the workers.
MARK AS BRAINIEST
Business Environment - This refers to the internal and external factors of the running business which impact it on either way.
Explanation-
A business organization including different parties like suppliers, customers, employees, government, and society's culture.
Types of business environment -
•Political and legal environment refers to the mindset of the ruling parties and the legal ideas about the business can impact the business at a scale.
•The social and cultural environment - The business exists in society is also affected by the customer and their mindset, how they perceive the available products and it's working.
•Technology Environment - This refers to the awareness of the technology of the business while being in society is tells how advance firms working and mindset are.
•Demographics Environment - The physical composition of the area and it's climatic conditions bring a large scale of the variation in the demand and the needs of the business.
Conclusion-
Hence, these are the main aspects a business works under a collective market.
Learn more about the business environment- https://brainly.in/question/11755568