The document discusses various elements of business environment including macroeconomic factors like growth and distribution environment, economic stability, and policies. It also discusses the competitive environment, demographic factors, political and legal frameworks, and technological changes that impact businesses. Companies need thorough knowledge and interpretation of the dynamic business environment to devise appropriate strategies and adjust to changes.

10. NATURE,COMPONENTS AND DETERMINANTS OF BUSINESS ENVIRONMENT COMPLEX SO BUSINESS ENVIRONMENT COMPLEX UNSTABLE

16. INPUT PROVIDER CUSTOMER CHANNEL MEMBERS BUSINESS GOVERNEMENT EMPLOYEE RIVALS DOMESTIC MACRO ECONOMIC ENVIRONMENT GROWTH AND DISTRIBUTION ENVIRONMENT ECONOMIC SYSTEM ECONOMIC STABILITY ECONOMIC POLICY SOCIAL CULTURE ENVIRONMENT NON MACRO ENVIRONMENT COMPETITIVE ENVIRONMENT DEMOGRAPHIC ENVIRONMENT INTERNATIONAL ENVIRONMENT INTERNATIONAL ENVIRONMENT COMPONENTS OF B.E DIFFERENT LAYERS OF B.E OF FIRM

17. GLOBAL B.E MAY CAUSE CHANGES IN DOMESTIC ENVIRONMENT BUT EFFECT OF LATTER ON POLICY ENVIRONMENT MAY BE SLOW AND LAGGARD

23. HOW GDP IS THEN ALLOCATED.

35. SO FIRM RESEARCH  DEEPLY AND UNDERSTAND– TO GO INTERNATIONAL MARKET.

48. CONSUMER PROTECTION: CONSUMER RIGHTS,DISPUTES,COMPLAINTS AND GRIEVANCE REDRESSAL SYSTEM. ESSENTIAL COMMODITIES– COVERING THEIR SUPPLY, PRICES, QUALITY WEIGHT, MEASURE AND PACKAGING- COVERING STANDARD UNITS, PACKAGING NORMS AND DECLARATION INSPECTION. PATENTS  APPLICATION PROCEDURE, LIFE OF A PATENT, RIGHT OF PATENTEE, EXCLUSIVE MARKETING RIGHTS INFRINGMENT OF PATENTS, CLAIM PROCEDURE And SETTLEMENT.

49. LABOUR  EMPLOYESS INSURANCE,PAYMENT OF GRATUITY,DISPUTES,BONUS,EMPLOYEES PROVIDENT FUND, COMPENSATION,DISCIPLINARY CORPORATE MANAGEMENT  FORMATION OF COMPANIES, MANAGEMENT OF COMPANIES, GOVERANCE OF COMPANIES, RAISING OF CAPITAL AND LIQUIDATION OF COMPANIES.

50. CHANGE SLOW TO OCCUR – CAN ACCELERATE—WITH-SOCIAL MOVEMENTS—CAMPAIGN—ALSO BY EXTERNAL INFLUECE EX- MAGGIE, ETC

51. ALSO HAS AN IMPACT ON BUSINESS ENVIRONMENT POPULATION DENSITY, SEX RATIO, FERTILITY AND MORTALITY RATIO, AGE COMPOSITION, LIFE EXPECTANCY, GEOGRAPHICAL DISTRIBUTION OF POPULATIO. ABOVE FORMS THE BASES OF MARKET SEGMENTATION, PRODUCT POSITIONING FOR MARKETERS . IT AFFECT THE SIZE OF MARKET AND DISCOURAGE/INCOURAGE PRIVATE INVESTMENT PARTICULARLY IN REGIONS OF LOW PER CAPITA INCOME.

54. TO FULLFILL MISSION, A FIRM AHS A VISION– LAYS DOWN ITS BASIC PHILOSOPHY AND APPROACH. STRATEGY  BASED ON THOROUGH—CLEARLY OBJECTIVES TO BE ACHIEVED OVER A PERIOD OF TIME. IS BASED ON ITS MISSION: WHY AND FOR WHOME DOES IT EXITS. SO BASIS FOR FIRM`S EXISTENCE AND OPERATIONS A FIRM EXECUTE THE MISSION THROUGH A STRATEGY.

56. B.E IS DYNAMIC. SO THOROUGH KNOWLEDGE IS REQUIRED TO INTERPRET THE B.E. . SO REQUIRE PROFESSIONAL BUSINESS ECONOMISTS AND MANAGERS

59. YOUNG GROUP,TASTE CHANGES: FACTOR THAT BRING CHANGE .. EDUCATION,GEOGRAPHICAL MOBILITY,FASHION TREND. AS CONSUMER INDUCE CHANGES IN PRODUCT CONTENT AND PRESENTATION  PACKAGING,DELIVERY ETC SO MORE COMPETITIVE ENVIRONMENT

61. 2. EXTERNAL ECONOMIC SHOCKS

62. ALL ABOVE CAN CAUSE TREMENDOUS DAMAGE TO ECONOMY.

63. AREAS OF ENVIRONMENTAL CHANGE AREAS OF CORPORATE RESPONSE TECHNOLOGICAL ENVIRONMENT R&D, FOREIGN TECHNICAL COLLABORATION,CHOICE OF TECHNOLOGY,LABOUR-CAPITAL RATIO. LABOUR ENVIR.. EMPLOYEE MOTIVATION, PRODUCTIVITY,COMPENSATION,TURNOVER RATE,WORKING CONDITIONS, LABOUR RELATIONS,NATURE OF EMPLOYMENT, JOB DESCRIPTION AND SPECIFICATION

64. COMPETITIVE ENVIRONMENT PRICING,MERGER,ACQUISITION OR AMALGAMATION,SUB-CONTROLLING, HORIZONTAL, VERTICAL, BACKWARD OR FORWARD INTEGRATION, MARKETING STRATEGY, NPD, ECONOMIES OF SCALE AND SCOPE. MONETARY ENVIRONMENT WORKING-CAPITAL FINANCING, LIQUIDITY RESTRUCTURING FISCAL ENVIRONMENT DIVIDEND POLICY, SUB-CONTRATING, TRANSFER PRICING,PRODUCT MIX,INDUSTRIAL LOCATION,SOURING. TRADING ENVIRONMENT FOREIGN COLLABORATION, INPUT MIX,EXPORT ORIENTATION, IMPORT INTENSITY, PRODUCT MIX

65. SO IMPORTANT TO FIND OUT FIRST BEFORE A PARTICULAR RESPONSE: WHIH CAUSATIVE FACTOR WILL AFFECT WHICH COMPONENT OF BUSINESS ENVIRONMENT. FINANCIAL ENVIRONMENT PRODUCT DEVELOPMENT, OVERHEAD FINANCING, FINANCING MIX, CAPITAL STRUCTURE, RATE OF RETURN, EXTERNAL FINANCING. LEGAL ENVIRONMENT PROCEDURE AND DOCUMENTATION, CREDIBILITY, CONFORMITY AND ETHICAL PRACTISES, INTELLECTUAL PROPERTY PROTECTION. SOCIAL ENVIRONMENT SOCIAL RESPONSIBILTY, LOCAL AND REGIONAL RELATIONSHIPS, WELFARE EXPENDITURE.

66. POSSIBILITY OF LOSS OR DAMAGE TO A BUSINESS FIRM. NO. OF POSSIBLE FUTURE EVENTS OR OUTCOMES IS LARGER THAN THE NUMBER OF EVENTS OR OUTCOMES WHICH WILL ACTUALLY TAKE PLACE.

67. TO IDENTIFY AND ASSESS THE RISKS  KNOW THE CURRENT STATE OF THE ENVIRONMENT AND ITS LEADING DETERMINANTS.

68. BUT ALL ABOVE INCREASE COST: SMALL AND MEDIUM LACK THIS SYSTEM.

69. SOME METHODS OF RISK ASSESSMENT 1. CHECKLISTS NO. OF SOCIAL,ECONOMICAL & POLITICAL VARIABLES—EFFECT BUSINESS

70. THROUGH CHECKLIST: YOU CAN: COMPARE RISK LEVEL OF SAME COUNTRY.. 2 DIFFERENT POINTS, 2 OR MORE COUNTRIES AT SAME POINT ETC.

71. 2. EXPERT BASED SCORING SYSTEM

72. ITS LIKE THIS 

73. 3.ECONOMIC METHODS YOU: LINEAR NON LINEAR: QUANTIFY  STRENGTH OF EACH VARIABLE--: THAT EFFECT B . E. YOU TRY TO QUANTIFY ECONOMIC RISK

74. 4. RATING AND RANKING SYSTEMS MANY BANKS : OFFER SERVICE: B O A: MAINTAINS WORLD INFORMATION SYSTEM NATIONAL AND INTERNATIONAL ECONOMIC ANALYSIS AND FORECASTS TO ITS CUSTOMERS: JUST LIKE SCORING SYSTEM

75. WHY I NEED TO KNOW TO KNOW WHERE A PARTICULAR COUNTRY STANDS DOLLAR AND RUPEE

78. ANOTHER: RISK BENCH MARKING YOU BENCHMARK RISK: NORMAL  FUNCTIONING  ACCEPTABLE RANGE– ENVIRONMENTAL FACTOR ASERTAIN: YOU COMPARE THE ACTUAL RISK(ABSOLUT) WITH BENCHMARK. R = R a -- R b R b 1 0 0 1 r R1r= RELATIVE RISK OF THE COUNTRY R1a= ACTUAL(ABSOLUTE) LEVEL OF BUSINESS ENVIRONMENT RISK OF COUNTRY. R0b= ACTUAL(ABSOLUTE) LEVEL OF BUSINESS ENVIRONMENT RISK OF REFERENCE COUNTRY. BENCHMARK = 0 MORALE OFF THE STORY: THE REFERENCE OR THE BENCHMARK COUNTRY MAY LOSE ITS STATUS AS SUCH IF THE LEVEL OF BUSINESS ENVIRONMENT RISK RISES SUBSTANTIALLT IN SUBSEQUENT YEAR.

81. FOR INDIVIDUAL FIRMS IT MEANS:

82. BECAUSE/MAY BE : VULNERABILITY OF ECONOMY TO CHANGING: :ECONOMIC CIRCUMSTANCES :POOR ECONOMIC POLICIES :ADVERSE MOVEMENTS IN SOCIAL AND POLITICAL CIRCUMSTANCES

89. EASY MONEY POLICY: SUPPLY OF MONEY AND COST AND AVAILABILITY OF CREDIT. IF MONEY CREDIT IF INCREASES – THAN– LIQUIDITY INCREASES  DEMAND INCREASES– LOW RATE OF INTEREST. SO GOOD AT TIME OF INFLATION RESTRICTIVE MONETARY POLICY: CREDIT & MONEY RESTRICTED & RATE OF INTEREST HIGH  GOOD TO CONTROL THE SURGING DEMAND.

90. 2. FISCAL POLICY VARIATIONS: CHANGES EFFECT: TAX & NON TAX REVENUES, SUBSIDIES, PUBLIC SECTOR & INFRA INVESTMENT, SOCIAL EXPENDITURE & EVENTUALLY GOVERNMENT BORROWING PROGRAMMES. FISCAL POLICY IS DETERMINED BY: BY EXPENDITURE REQUIREMENT AS PER MACRO ECO OBJECTIVE: LIKE AND BY REVENUE MOBILIZATION FISCAL DEFICIT: DIFFERENCE BETWEEN REVENUE RECEIPT AND TOTAL EXPENDITURE: GOVT  ADOPT  MIX OF EXPENDITURE REDUCTION, ADDITIONAL TAXATION, INCRESED NON-TAX CHARGES & ADDITIONAL BORROWING FROM MARKET.

92. WHY WHEN TRADE AND BOP ADVERSE HOW THROUGH HIGHER IMPORT DUTIES, NON-TARIFF MEASURES  IMPORT QUOTOS. STATE TRADING, IMPORT LICENCING, VOLUNTRY EXPORT RESTRAINTS(VER), ORDERLY MARKETING ARRANGEMENTS(OMR) ITS ADVERSE EFFECTS: RESTRICT COMPETITION, LESS TECH-UPGRADATION-INNOVATION  LEAD TO BREED INEFFICIENCY THROUGH DOMESTIC INDUSTRY PROTECTION.

93. TO WHOME IT AFFECTS: MULTINATIONAL COMPANIES AND THEIR AFFILITIES. HOW IT EFFECTS: MAINLY 2 THINGS (LCRs AND DBRs). LCRs  MINIMUN LOCAL CONTENT REQUIREMENTS  MOSTLY FOR FIRMS WHICH ARE PREDOMINANTLY ENGAGED IN ASSEMBLY OPERATIONS USING IMPORTED COMPONENTS: DBRs  DIVIDEND BALANCING REQUIREMENT. DIVIDEND OUTFLOW OF AN MNC MUST BE MATCH BY AT LEAST AN EQUAL AMOUNT OF INFLOW OF F.E THROUGH EXPORTS, F.INVESTMENT  SO OPERATIONS OF MNC DOESNOT CAUSE A DRAIN ON HOST COUNTRY F.EXCHANGE RESERVES.

95. MORE STRONG LABOUR BACK BY GOVERNMENT MORE RELUCTANT TO INVEST IN THAT COUNTRY. SO RISK HIGH IN LABOUR INTENSIVE INDUSTRY: IN INDIA 150 MINOR MAJOR LEGISLATION.

97. GENERAL INSTABILITY RISK : POLITICAL SYSTEM MAY CHANGE AS GOVT CHANGES. POOR COUNTRIES ARE MORE PRONE: POOR GOVERNANCE, POVERTY, EXPLOITATION, WEAK AND INEFFICIENT GOVERNMENT SO MORE POLTICAL RISK.

98. 2.OWNER SHIP RISK ; RISK OF CONFISCATION(GOVERNEMENT TAKING OWNERSHIP OF PROPERTY WITHOUT COMPENSATION, EXPROPRIATION(GOVERNMENT TAKING OWNERSHIP WITH SOME COMPENSATION), NATURALIZATION, OR DOMESTICATION(SURRENDERING PART OR FULL CONTROL IN AN MNC TO NATIONAL OR DOMESTIC FIRM OR GOVERNMENT). EARLIER UNDER FOREIGN EXCHANGE REGULATION ACT(1973), FOREIGN FIRMS WERE REQUIRED TO DILUTE SHAREHOLDING TO 40%.

109. WHILE DETERMINING THE EFFECT OF COMP,… UNDER THIS ACT FOLLOWING SIX FACTORS ARE TAKEN INTO ACCOUNT.

127. WHILE DETERMINING THE EFFECT OF COMP,… UNDER THIS ACT FOLLOWING SIX FACTORS ARE TAKEN INTO ACCOUNT.

136. WORLD IS NOW SMALL PLACE TO WORK. MORE OF NECESSITY. NOW YOU SEE IT MORE AS A GROWTH FACTOR YOU DESIGN POLICIES TO LINK WITH VARIOUS/ REST OF THE WORLD. ITS UNDOUBTLY NOW A PILLAR OF ECONOMIC GROWTH

137. ITS NOT PURELY A ECONOMIC AND BUSINESS CONCEPT BUT MUCH MORE PROCESS OF INTERNATIONAL INTEGRATION OF PRODUCTS, TECH, HR,CAPITAL,INFOR AND CULTURES. AS GLOBALIZATION MOVES SO ECONOMIC, SOCIAL, POLITICAL MOVES AND INTERACTION FURTHER INCREASES.

146. CONTINUE..