Justify the following statements.
1) External factors of business environment are beyond control.
1. Factors that influence the business policy of an organization can be divided into internal and external factors.
2. The business has no control over external forces.
3. These are those factors that provide opportunities or pose threats to the organization.
4. Factor such as social customs, values, economic policies, technological development, political ups and downs, legislation together constitute political, social, economic, legal, and technological diversions of business. Hence, they are not in the hands of business organizations.
5. Internal factors are controllable and the business unit can modify their plans, policies, etc.
2) Business firm should be aware of the changes in society.
1. The success of every business depends on adapting itself to the environment in Which it functions.
2. Modern business is rightly termed as a socio-economic activity.
3. There is a reciprocal relationship between business and society.
4. Business is affected by the class structure of the society which ‘depends upon factors such as occupation its own culture, income, etc.
5. Every society depends on its own culture, customs, tradition, values, ethics, etc. social trends are also changing fast. For e.g. a large number of people are eating fast food and go to gyms. So many fast food outlets and gyms are coming up in town and cities.
6. Social values and traditions such as the celebration of Diwali, Eid, Christmas also affect business.
3) Political stability builds up confidence among business people.
1. Business firms are affected by the government and its policies.
2. Political force decides the nature of the business, device performance, and projects for development.
3. The political environment includes stability and peace in the country. Political stability builds confidence among different interest groups and investors because long term policies and projects will be started by the government and if the government keeps on changing every six months or in a year.
4. This will impact long term decisions of development for the country. Because political parties identify forms their decision making. Hence if a government gets its full tenure of 5 years, it can complete its projects and plans and win the confidence of the people.
4) Economic environment has direct influence on business.
1. Economic environment consists of economic conditions, economic policies, and economic systems along with basic economic philosophy, infrastructure, national income, money supply, etc.
2. Economic condition is based on GDP, per capital income, availability of capital, growth of foreign trade, and capital market.
3. Whereas economic policies framed by the government from time to time changes with changes in the government.
4. Every business has to function within the policy framework and responds to changes accordingly.
5. This relates to Industrial Policy, monetary policy, foreign investment, EXIM policy education policy, etc.
6. Also, the scope of private business and government regulation depends on the economic system such as; capitalist economy, Socialist or mixed economy which impacts business decisions.
5) Social trends provide business opportunities.
1. Society and business are inter-dependent.
2. Class structure such as occupation, education, income level social status, attributes, etc. impact business decisions.
3. Social trends are any type of activity that is practiced in society as a whole.
4. Trends can be for a short period or long-lasting. As technology progresses the changes in social trends do change.
5. Companies use their ability to anticipate social change as part of their business marketing policy, to grab business opportunities.
6) An adequate knowledge of rules and regulations is essential for better business
1. Any business in a country can be started, regulated, and controlled within the legal framework of a country.
2. A separate set of laws are framed by all countries to control and direct the business affairs.
3. Knowledge of law, rules, and relegations helps the business managers to take a prompt decision in making business policies.
4. Various laws are implemented for influencing the business, protect and safeguard the business, as well as the consumers.