The general environment is the most important dimension of the business environment because the businessman cannot influence or change the components of the general environment, as he must change his plans and policies according to the changes in the general environment. We want every user of our business to share information related to the business.
Today we will provide you the basic information about the legal component of the business. Because a lot of user queries are always being created, But friends, you will find information about it in Google. But we thought that all the users of our website should also get information through this website. 06 Major Components of the Business Environment.
1. Economic Environment:
Today we know that interest rate, inflation rate, change in disposable income of people, stock market index, and the value of rupees are some economic factors. Which can affect management practices in a business enterprise? Which short and long-term interest rates greatly affect the demand for products and services. For example, in the case of construction companies and Automobile Manufacturers, lower long-term rates are beneficial,
As they increase spending on money borrowed by consumers to buy homes and cars. Similarly, due to the increase in the disposable income of the people due to an increase in the GDP of a country, increasing demand for products., a High inflation rate is usually a constraint on business enterprises. Because they raise various costs of the trade such as the purchase of raw materials or machinery and payment of salaries and salaries to employees.
Activity: You must be aware that at any time, read the newspapers of the last fifteen days and pay attention to the changes in any of the five economic policies made by the government. Analyze their impact on the work of commercial enterprises. Like we based on the headings mentioned below. 🙂
- RBI is a major regulator of the economic environment of the country because, it affects the interest rates.
- Controls the flow of money in the economy.
- Regulates the work of banks.
2. Social Environment:
You know, the social environment of business includes customs and traditions, values, social trends, society’s expectations from business, etc. Traditions define those social practices. How would you and we know that have been going on for decades or centuries? For example, the celebration of Diwali, Eid, Christmas, and Guru Parva in India provide significant financial opportunities for greeting card companies, sweets or confectionery manufacturers, sewing shops, and many other related businesses.
These values refer to those concepts. Which a society holds in high esteem. In India, personal freedom, social justice, equality of opportunity, and national integration are examples of the core values cherished by all of us. In business terms, these values translate into the freedom of choice in the marketplace, business responsibility towards society, and non-discriminatory employment practices.
Social trends are said to present various opportunities and threats to business ventures. For example, health and fitness trends are said to have become popular among a large number of urban dwellers. This has created a demand for products such as organic food, diet soft drinks, gyms, bottled (mineral) water, and food supplements. This trend, however, has hurt business in other industries such as dairy processing, tobacco, and alcohol.
3. Technological Environment:
As we all know, the technological environment consists of forces related to scientific reforms and innovations. Which provides new ways of producing goods and services and new ways and techniques of operating a business. For example, recent technological, computer, and electronics advances have modified the methods.
4. Social Environment:
Contact our ten known families as we talk about social inclusion. Find out the change in their consumption habits in the last seven years from today. Analyzes the impact of these changes on the functioning of commercial enterprises.
Which companies advertise their products? It is now common to highlight the properties of products on CD-ROMs, computerized information kiosks, and Internet / World Wide Web multimedia pages. Similarly, retailers are asked to have direct relationships with those suppliers. Those who replenish stock when needed. The manufacturers have a flexible manufacturing system.
Airline companies have internet and world wide web pages. Where customers can search for flight times, destinations, and fares. And can book your tickets online. In addition, continuous innovations in various scientific and engineering fields such as lasers, robotics, biotechnology, food preservatives, medicine, telecommunications, and synthetic fuels have provided many opportunities and threats to many different enterprises.
From vacuum tubes to transistors, steam locomotives to Nederland’s electric locomotives, fountain pens to ball points, propellers to airplanes, and from typewriters to computer-based word processors are all responsible.
5. Political Environment:
Now let us tell you about the political environment that it includes political stability and peace and peace and peace with political conditions. The importance of political conditions in commercial success lies in the prediction of business activities under stable political conditions. On the other hand, political unrest and threats to law and order may result in uncertainty of business activities. political stability,
Thus, investing in long-term projects for the development of the economy creates trust among business people. Political instability can shake that confidence. Similarly, the behavior of government officials towards business can have a positive or negative impact on business.
For example: even after the opening of our economy in session 1991, foreign companies found it extremely difficult to cut through bureaucratic red tape to obtain permits to do business in India. Sometimes, it also takes months to process their application for the purpose. As a result, these companies were discouraged from investing in our country. The situation has improved over time.
6. Legal Environment:
We will talk about the legal environment, it includes government administrative orders issued by government authorities, court rulings as well as decisions by various commissions and agencies at every level of government-centre, state or local.
Complying with the law of the land is mandatory for the management of every enterprise. Therefore, adequate knowledge of the rules and regulations set by the government is a per-requisite for better business performance.
Non-adherence to the laws can lead to business ventures into legal problems. If we talk during the year 1950, in India, working knowledge of Companies Act (A), 1956; Industries, (Development and Regulation) (B), Act 1951; Foreign Exchange Management Act and Import and Export (Control) (C), Act 1947; (D), Factories Act, (1948; Trade Unions Act; (E), 1926, Workmen Compensation Act, (F), 1923; Industrial Disputes Act, 1989, Consumer Protection Act, 19, 9, Competition Act, 2002 and Hosting such other legal enactments, as amended from time to time by Parliament, is important for conducting business.
As it is said, the effect of the legal environment can be illustrated with the help of government regulations to protect the interests of the consumer.
For example, advertising of alcoholic beverages is prohibited. Advertisements, including cigarette packets, provide legal warnings that cigarette smoking is harmful to health ‘. Similarly, advertisements for baby food should inform potential buyers that mothers’ milk is the best. All these rules are required to be followed by advertisers.
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Business management expert and Leadership Consultant and Business Coach, who writes her blog, Jay’s Trends, focused on helping small business owners understand trends in Business management. Other posts by Jayprakash Prajapati»