cbse-class-12-business-studies-notes-chapter-3

Business Environment

Refers to all the factors that are outside the control of the business enterprise but may affect its performance.

Totality of External Forces

Includes every external or outside force that could impact a business organisation such as government and competitors.

Specific Forces

Particular factors that have a direct impact on a single corporate organisation.

General Forces

Factors that have a direct impact on the broader industry but an indirect impact on a firm.

Inter-Relatedness

Changes in general forces can impact specific forces.

Dynamic Nature

The external forces keep changing due to constant changes in technology, consumer preferences, and availability of resources.

Uncertainty

Constant changes in the environment make it difficult to predict changes.

Complexity

The interrelated and dynamic nature of external forces makes strategic planning challenging.

Relativity

The impact of changes depends on specific business circumstances and regional contexts.

Identification of Opportunities

Enables firms to find opportunities and gain first mover advantage.

Identifying Threats

Helps businesses to recognize potential threats in the external environment.

Tapping Useful Resources

Utilizing resources from the external environment for production and operations.

Coping with Rapid Changes

Developing strategies to handle and leverage changes in the business environment.

Economic Environment

Comprises all factors and forces with economic impact on business activities.

Social Environment

Consists of the societal conventions, traditions, and values affecting business operations.

Political Environment

Includes aspects like political stability and government policies impacting businesses.

Legal Environment

Encompasses all legislation, administrative orders, and court judgments affecting businesses.

Technological Environment

Relates to scientific advancements and innovations that influence production methods.

Liberalisation

Reform aimed at removing unnecessary controls and restrictions in the economy.

Privatisation

Transfer of responsibilities from the state to the private sector.

Globalisation

Facilitating the trade and exchange between diverse global economies.

Demonetisation

The process of invalidating currency notes of certain denominations by the government.

Impact of Demonetisation

Includes changes in cash transactions, increase in bank deposits, and tax collection.

LPG Reforms

Liberalisation, Privatisation, and Globalisation reforms that impacted Indian business and industry.

Market Orientation

Shift from product-oriented operations to market-oriented operations in businesses.