class 12 business studies Management and Business Environment notes

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Management and Business Environment..... Short & Easy Notes for Board Exam

#1. What is business environment? Importance?Characteristics?

> It refers to all forces which are external to a business and beyond its control. These forces affect the working of the business and are uncontrollable to a large extent.

Importance;
  • It enables the form to identify opportunities and getting the first mover advantage
  • It helps the firm to identify threats and early warning signals
  • It helps in tapping useful resources
  • It helps in coping with Rapid change
  • It helps in assisting in planning and policy formulation
  • It helps in improving performance

Characteristics;
  • Totality of external forces.
  • Specific and general forces.
  • Inter-relatedness.
  • Create uncertainty.
  • It is dynamic.
  • It is complex.
  • It affect different unit differently.
#2. Component or classification of business environment.
> There are two types of business environment.
(A) Internal environment - It include those factors which is affecting the business and which are inside the business and which is controlled by business.
  • Financial resources
  • Physical resources
  • Technological resources
  • Human resources

(B) External environment - It includes those factors which is outside of the business.
  • Customers
  • Competitors
  • Government
  • Society
#3. What is New Economic Policy?
> The process of economic reforms was started in 1991 for taking the country out of economic difficulties. 
The major changes of economic policies are;
  • Liberalisation.
  • Privatisation.
  • Globalisation
#4.What is Liberlisation? Features?
> It is the process of eliminating the unnecessary restrictions on the business.
Features;

  • simplifying import export procedure.
  • simplify the process of attracting foriegn capital and technology.
  • Removing restriction for the movement of goods and service.
  • Freedom to fix the price of goods and service.
  • Reduction in the rate of taxes.
  • Freedom from unnecessary control over economy.

#5. What do you mean by globalisation?

> It means integrating the economy of the country with the world economy.

following are its features;

  • opening the economy to foriegn capital and foriegn technology.
  • Expension of multi national company.
  • Integration of demostic economy with global economy.
  • Free world trade.
  • Elimination of teriffs and quota.
  • Free flow of international capital.

#6. What do you mean by privatisation?

> It means economic process completely open for private ownership.

 Following are its features:

  • Reducing the role of public sector.
  • Reduycing the size of government machinary.
  • Improving management of enterprises.
  • Increase the government treasury.
  • Reducing fiscal burden of government.
  • Speeding up economic development.


POINTS
1.New economic policies was declared in july 1991.

2.Main componenet of new economic policies are Liberalisation,globalisation,privatisation.

3.Business economic environment is influenced by economic policies,economic system,economic development.

4.Liberalisation policies has been sucessfull.

5.New industrial policies was framed in 1991.

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