Explain the following terms/concepts.

1) Business environment.
(I) Business environment refers to the external environment which includes factor outside the business leading to opportunities or threats of the business. According to Bayard O. Wheeler
(II) “The total of all things external to firm and industries which affect their organization and operations is called as “Business Environment”.

2) Liberalization.
(I) Liberalization refers to the process of eliminating unnecessary controls and restrictions for smooth functioning of business.
(II) Liberalization helps 1n achieving a high growth rate, easy availability of goods at competitive rates, high foreign exchange reserve, strong rupee and good industrial relation, etc.

3) Privatization.
(I) Privatization refers to reduce the involvement of state or public sectors by involving of private ‘sector in economic activities.
(II) It implies government sectors to be sold or given to private individuals to run them.

4) Globalization.
(I) Globalisation means integration of the national economy and societies through cross country flows of information, ideas, technologies, good services, capital, finance, and people.
(II) It also means “boundary less world”.

5) Social environment.
(I) Modern business is a social system in itself and forms a part of the larger social system represented by society in general.
(II) The class structure of a society affects the business. Such as occupation of the people, their education, income level, social status, attitude towards living, work, and social relationship.

6) Economic environment.
The economic environment comprises economic conditions, economic policies, and economic systems, basic economic philosophy, infrastructure, national income, money supply, saving stages in economic development and trade cycles.

7) Political environment.
(I) Government and its policies affect business firms.
(II) It includes stability and peace in the country, specifically attitudes of elected representatives. The ideology of the political parties influences the business organization and attitudes of government officials towards business has an impact on business.
3. It comprises .three vital institutions like Legislature, Government, and Judiciary.

8) Internal environment.
Internal environment compromises of policies decided by shareholders, managers, labour unions and employees which can be controlled which helps to make specific, proper understanding in strengthening the business.