Book 1 Chapter 3: Business Environment Flashcards

1
Q

Business Environment

A

Sum total of all individuals, institutions and other forces that are outside the control of the business but may affect its performance

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2
Q

Features of Business Environment

A

CID RUST

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3
Q

The C in CID RUST

A

Complexity

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4
Q

The I in CID RUST

A

Inter-relatedness

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5
Q

The D in CID RUST

A

Dynamic Nature

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6
Q

The R in CID RUST

A

Relativity

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7
Q

The U in CID RUST

A

Uncertainty

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8
Q

The S in CID RUST

A

Specific & General Forces

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9
Q

The T in CID RUST

A

Totality of External Forces

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10
Q

Specific Forces

A

Specific Forces affect individual enterprises directly and immediately in their day to day working

For Example, Investors, Customers, Competitors, Suppliers etc.

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11
Q

General Forces

A

General Forces have impact on all business enterprises and thus may affect an individual firm only indirectly

For Example, Social, Legal, Political and Technological conditions

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12
Q

Business Environment differs from country to country and even region to region

A

Relativity

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13
Q

It is very difficult to predict future happenings in the Business Environment

A

Uncertainty

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14
Q

The Business environment is a complex phenomenon that is relatively easier to understand in parts but difficult to grasp in totality

A

Complexity

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15
Q

The Business Environment keeps on changing

A

Dynamic in Nature

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16
Q

Business Environment is aggregative in nature

A

Totality of External Forces

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17
Q

Different elements or parts of business environment are closely inter-related

A

Inter-relatedness

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18
Q

Importance of Business Environment

A

IIT CAP

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19
Q

The I in IIT CAP

A

Identify Opportunities and getting First mover Advantage

Identify Threats and early warning signals

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20
Q

The I in IIT CAP

A

Identify Threats and early warning signals

Identify Opportunities and getting First mover Advantage

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21
Q

The T in IIT CAP

A

Tapping Useful Resources

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22
Q

The C in IIT CAP

A

Coping with Rapid Changes

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23
Q

The A in IIT CAP

A

Assists in Planning and Policy formulation

24
Q

The P in IIT CAP

A

improves Performance

25
Q

Opportunities

A

They refer to the positive external trends or changes that will help a firm to improve its performance

26
Q

Environment provides numerous opportunities for Business Success

A

Identify Opportunities and getting first mover advantage

27
Q

Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing them competitors

A

First mover Advantage

28
Q

Threats

A

They refer to the external environment trends and changes that will hinder a firm’s performance

29
Q

Environment is a source of various resources for running a business

A

Tapping Useful Resources

30
Q

Inputs

A

They refer to the various resources required by a business enterprise to engage in any type of activity

For example, finance, raw materials, labour etc.

31
Q

Outputs

A

They refer to the end products that the business enterprise supplies (such as goods and services) after applying the necessary inputs

32
Q

The business enterprise depends on the environment as a source of inputs or resources and as an outlet for outpus

A

Tapping Useful Resources

33
Q

The future of an enterprise is closely bound up with what is happening in the environment

A

improves Performance

34
Q

Managers must understand and examine the environment and develop suitable courses of action

A

Coping with Rapid Changes

35
Q

Dimensions of Business Environment

A

SLEPT

36
Q

The S in SLEPT

A

Social

37
Q

The L in SLEPT

A

Legal

38
Q

The E in SLEPT

A

Economic

39
Q

The P in SLEPT

A

Political

40
Q

The T in SLEPT

A

Technological

41
Q

Examples of Economic Environment

A

Interest rates and Inflation Rates

Value of Currency

Changes in Disposable Income of the People

42
Q

Examples of Social Environment

A

Consumer Tastes and Preferences

Consumer Expectations

Literacy Rates

Life Expectancy

43
Q

Examples of Technological Environment

A

Scientific Improvements

New Inventions and Innovations

New ways of Production

44
Q

Examples of Political Environment

A

Constitution of the Country

Prevailing Political System

Political Unrests

Foreign Political Relationships

45
Q

Examples of Legal Environment

A

New Legislations passed by the Government

Court Judgements

Administrative Orders by Government Authorities

46
Q

NIP

A

New Industrial Policy, 1991

47
Q

FIPB

A

Foreign Investment Promotion Board

Was set up to promote and channelise Foreign Investment

48
Q

When was NIP announced?

A

July 1991

49
Q

Disinvestment

A

It refers to dilution of stake of the Government in the Public Sector Enterprises and giving greater control to the Private sectors

50
Q

FDI

A

Foreign Direct Investment

Enabled Foreign Companies to directly invest in the Country

51
Q

Liberalisation

A

Freeing industries from the shackles of the licensing system and removing unnecessary controls and restrictions

52
Q

End of Licence-Permit-Quota Raj

A

Liberalisation

53
Q

Privatisation

A

Giving greater role to the Private sector enterprises as opposed to the public sector enterprises

Diluting industries who were regularly incurring losses

54
Q

BIFR

A

Board of Industrial and Financial Reconstruction

Aimed at assisting viable industries and shutting down other industries who were regularly incurring losses

55
Q

Globalisation

A

Increasing the level of interaction and interdependence among various nations to remove physical geographical boundaries and gaps