What are the three components of business environment? Discuss.

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The three components of business environment:--

(i) Economical Environment:

Economic Environment consists of Gross Domestic Product, Income level at national level and per capita level, Profit earning rate, Productivity and Employment rate, Industrial, monetary and fiscal policy of the government etc.

 

The economic environment factors have immediate and direct impact on the businessman so businessmen must scan the economic environment and take timely actions to deal with these environments. Economic environment may put constraints and may offer opportunities to the businessman. After the new economic policy of 1991, lots of opportunities are offered to businessmen. The common factors which have influenced the Indian economic environment are

(a) Banking sector reform has led to many attractive schemes of deposits and lending money. The Banks are offering loans at very nominal rate of interest and with minimum formalities to be completed.

(b) Recent changes in economic and fiscal policy of country have encouraged NRIs and foreign investors to invest in Indian companies.

(c) Lots of economic reforms are taking place in leasing and financing institutions. The private sector is allowed to enter in financial institutions; as a result customers are gaining.

 

Some Aspects of Economic Environment:

1. Role of Private and Public sector

2. Rate of growth of GDP, GNP, and Per Capita Income

3. Rate of Saving and Investment

4. Balance of Trade

5. Balance of Payment

6. Transport and Communication System

7. Money Supply in the Economy

8. International Debt

(ii) Social Environment:

Social Environment consists of the customs and traditions of the society in which business is existing. It includes the standard of living, taste, preferences and education level of the people living in the society where business exists.

The businessman cannot overlook the components of social environment as these components may not have immediate impact on __________ _________ ____ _____________ _________ __ ____________ ____________ _________ ______ _____________ ___ ____.
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Degree : BACHELOR DEGREE PROGRAMMES
Course Name : Bachelor in Commerce
Course Code : BCOM
Subject Name : Business Environment
Subject Code : ECO 13
Year : 2022 2023