Presentation on Chapter 3 of class 12 business studies i.e. Business Environment.

1. BUSINESS
ENVIRONMENT
BY—{ADITYA RAJ}
CLASS—{12TH C}
ASSIGNED BY – PREKSHA
MEHTA

2. SUMMARY OF CHAPTER
◦ CONCEPT [MEANING AND FEATURES BUSINESS OF BUSINESS
ENVIRONMENT]
◦ IMPORTANCE OF UNDERSTANDING BUSINESS ENVIRONMENT
◦ DIMENSIONS OF BUSINESS ENVIRONMENT

3. MEANING OF BUSINESS ENVIRONMENT
THE term business environment is the sum total all
the individuals,institutions and other forces that are
outside the control of busines enterprises but may
affect its performance.

4. FEATURES OF BUSINESS ENVIRONMENT
1. Sum total of all forces: Business environment is a sum total of all the
forces external to business firms.
2. Specific and general forces: Business environment consists of both specific
forces such as investors, customers, competitors and suppliers which affect
individual firm directly and general forces such as social, political, legal and
technological conditions which have impact on all business enterprises and
thus may affect an individual firm only indirectly.
3. Interrelated: All the elements of business environment are closely interrelated
to each other.
4. Dynamic: Business environment is dynamic because it keeps on changing.
For e.g. customers' tastes, government policies, competitors' moves and
technology keep on changing.

5. 5. Uncertain: Business environment is uncertain
because it is difficult to predict
changes taking place in it.
6. Complex: It is complex in nature as it is relatively
easier to understand in
parts but difficult to comprehend in its totality
because it consists of numerous
interrelated and dynamic forces.
7. Relative: Business environment is a relative
concept because it differs from
region to region and country to country. For e.g. in
India there will be more
demand for dosa and in US there will be more demand for
pizza.

6. Importance of Business Environment
1. It enables the firm to identify opportunities and getting the first mover
advantage instead of losing them to its competitors. For e.g. Maruti Udyog in
small car market, Volvo in luxury buses etc.
2. It helps the firm to identify threats and early warning signals which are
likely to hinder a firm’s performance and take timely actions. For e.g. if an
Indian firm finds that a foreign multinational is entering India, it should act as a
warning signal and the Indian firm should prepare itself.
3. It helps in tapping useful resources: Understanding of business
environment helps in obtaining and assembling resources as per the demand
in the market. For e.g. with demand for flat screen coloured televisions,
producers are collecting resources needed to produce flat screen coloured
televisions and not the resources needed for black and white televisions.
4. It helps in coping with rapid changes: Business environment is dynamic
and it keeps on changing. Understanding of business environment helps in
adapting to the changes taking place.

7. 5. It helps in assisting in planning and policy formulation: Business
environment is a source of both opportunities and threats. Therefore,
proper
understanding of business environment helps in making plans and
deciding
future courses of action.
6. It helps in improving performance of an enterprise: Continuous
monitoring
of the environment and adopting suitable business practices helps in
improving the performance of an organisation.
DIMENSIONS OF BUSINESS ENVIRONMENT
1. Economic Environment: It includes interest rates, inflation rates,
changes in
disposable income of people, stock market indices, value of rupee etc.

8. 2. Social Environment: It includes the social forces like customs and
traditions,
values, social trends, society’s expectations from business, etc.
3. Technological Environment: It includes forces relating to scientific
improvements and innovations which provide new ways of producing goods
and services and new methods and techniques of operating business.
4. Political Environment: It includes political conditions such as general
stability and peace in the country and specific attitudes that elected
government representatives hold towards business.
5. Legal Environment: It includes various legislations passed by the
Government administrative orders issued by government authorities, court
judgments as well as the decisions rendered by various commissions and
government agencies.

9. Thank you everyone
BY-ADITYA RAJ
CLASS-12TH C