Section I E Module Outline plan Maharaja Surajmal Institute Affiliated to GGSIPU Delhi Course Bachelor of Business Administration Subject Module On Business Environment BBA 17112 Semester II Credit 4 Module Contributor s Dr Jasbir Singh Dr Suhasini Parashar July 2021 1 2 TABLE CONTENTS CONTENTS Unit 1 An overview of Business Environment Chapter 1 Type of Environment Internal External Micro Macro 5 11 Chapter 2 Socio cultural Environment Chapter 3 Competitive structure of Industry Chapter 4 Environment Analysis and strategic management Chapter 5 Managing Diversity Chapter 6 Scope of Business Characteristics of Business Chapter 7 Economic Growth Development Sustainable development 57 70 Chapter 8 Basic Characteristics of Indian Economy Unit 2 Planning and Economic Development and Problems of Indian 75 136 Economy Chapter 1 Industrial Policy 1991 Chapter 2 Disinvestment of Public Enterprise Chapter 3 Poverty Nature Causes and Measure to Control Chapter 4 Inequality Nature Causes and Measure Chapter 5 Unemployment Nature Causes and Measure to Control Chapter 6 Concentration of Economic Power Page No 12 17 18 20 21 41 42 45 46 56 71 74 75 82 83 87 88 97 98 106 107 110 111 114 127 136 Chapter 7 Low Capital Formation Nature Causes and Measure to Control 115 126 Chapter 8 NITI AYOG and Economic Planning Unit 3 Concepts of National Income and National Income Determination 137 217 Macro Economic Framework Limitation Chapter 1 Macro economics Definition importance Variable 137 145 Chapter 2 Circular flow of income in 2 3 4 sector 145 148 Chapter 3 Multiplier in Two Sector Three Sector in Four Sector Model 149 164 Chapter 4 National Income concept Definition Methods of Measurement 165 182 National Income in India problem in measurement of NI Precaution Chapter 5 Theory of Full Employment Income Classical Modern 183 193 Approach Chapter 6 Consumption function Saving Function 194 206 3 Chapter 7 Investment function and Type of investment MEC MEI 207 217 Unit 4 Economic Environment 218 266 Chapter 1 Nature of Economic Environment Economic Economic 218 224 System Chapter 2 Monetary Policy Objective Instrument Functions 225 227 Recent credit policy of RBI Chapter 3 Fiscal policies Objective Instrument Functions Chapter 4 FDI Chapter 5 FEMA Chapter 6 WTO GATT MCQ Multiple Choice Question Glossory and Key Words References and Further Readings 1 Paul J Business Environment 2017 McGraw Hill Education 2 Cherulin Francis 2014 Business Environment Text and Cases Himalaya Publishing House 3 Dhingra I C 2016 Indian Economy Sultan Chand Sons 4 Ashwathapa 2012 Essentials of Business Environment Himalaya Publishing House 5 Gupta C B 2014 Business Environment Sultan Chand Sons 6 Dwivedi D N 2015 Macro Economics McGraw Hill Education 228 244 245 253 254 255 256 266 267 304 4 Unit I CHAPTER 1 TYPES OF ENVIRONMENT INTERNAL EXTERNAL Business Environment i Business Environment means a collection of all individuals entities and other factors which may or may not be under the control of the organisation but can affect its performance profitability growth and even survival Every business organisation operates in a distinctive environment as it cannot exist in isolation Such an environment influence business and also gets affected by its activities ii All business enterprises functions within an environment called as the business environment An individual business firm survives and grows within the periphery of its environment A firm is only a part of a big environment and so there are only a few factors which are under the control of the firm So the firm has no other option but to respond and adapt accordingly If business persons possess a good understanding of the business environment they can easily recognise analyse and react to the forces that affect the firm Features of Business Environment i Dynamic The environment in which the business operates changes continuously because there is a wide variety of factors that exist in the environment causing it to change its shape and character ii Complex There are many forces events and conditions that constitute business environment arising from various sources So it is a bit difficult to understand the relative influence of a particular iii Uncertain Uncertainty is an inherent characteristic of business environment because no one can factor on the operation of the organisation predict what is going to happen in future iv Multi faceted A single change in the business environment can be viewed differently by different observers because their perceptions vary v Far reaching Impact The survival growth and profitability of a business enterprise depends largely on the environment in which it exists A small change in the environment has a far reaching impact on the organisation in different ways vi Relative The notion of business environment is relative since it varies from one location to another 5 Internal Environment External Environment Internal Environment Components of Business Environment The Business Environment is broadly classified into two categories Internal Environment refers to all the factors existing within a business firm The internal factors are considered controllable because the entreprise has control over these factors However an entreprise may not sometimes have complete control over all the internal factors The main internal factors which influence business decisions are as follows Culture The values beliefs and attitudes of the founders and top management of the company exercise a strong influence on what the company stands for how it does things and what it considers important When the value system is shared by all the members the organisation is likely to be more successful The business philosophy and purpose of the company guide its priorities business strategies and Missions and Objectives product market scope and development process Top Management Structure The composition of the board of directors the degree of professionalization of management and the organisational structure of a company has important bearings on its business decisions The board of directors sets the direction and monitors the performance of the company Companies having highly qualified and responsible boards outperform those lacking such boards of directors Sound management structures and styles facilitate timely decision making Power Structure The internal power relationship between the board of directors and the chief executive is an important factor The extent to which top
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