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ISC Class XII Textbook 2024 : Commerce

59 pages, 97 questions, 0 questions with responses, 0 total responses,

Yay Ig
Stanes ICSE School, Coimbatore
XII Commerce

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CHAPTER-1 BUSINESS ENVIRONMENT Revision Notes l Meaning: Business environment can be defined as the sum total of all the forces, factors and institutions which are external to the business enterprise and beyond its control, but they exercise tremendous influence on the functioning and growth of the enterprise. l Features: The main features of business environment are as follows: 1. Totality of external forces: Business environment includes all the forces, institutions and factors which directly or indirectly affect the business organisation. 2. Specific and General forces: Business environment includes specific forces such as investors, customers, competitors and suppliers which affect the business directly and general forces like social, economic, legal and political factors that affect the business enterprises indirectly. 3. Interrelatedness: All the forces and factors of business environment are inter-related to each other. 4. Dynamic: Business environment is highly dynamic. It is not static or rigid. It keeps on changing due to frequent changes in government policy, demand, new technology, etc. 5. Relativity: The impact of business environment may differ from company to company or country to country. 6. Uncertainty: It is very difficult to predict the changes of business environment as environment is changing at a very fast pace like IT sector and fashion industry. l Importance of business environment: 1. It enables the firm to identify opportunities and get first mover advantage. 2. It helps the firm to identify the threats and early warning signals. 3. It helps to adjust and adapt to rapid changes. 4. It helps in tapping useful resources. 5. It helps in formulation of plans and policies. 6. It increases the efficiency and performance of the enterprise. l Dimensions of Business Environment: There are two main dimensions of business environment: 2. Macro Environment cial So O ENVIRONME CR NT A M rnal Factors e t n I Corporate culture, Top management, Vision and Mission, etc. Micro Environmennt Customer, Competition, Suppliers, etc. nomic Legal Eco Technologica l 1. Micro Environment External Factors Political Dimensions of Business Environment 1. Micro Environment: Micro Environment refers to those internal and external factors which exercise a direct influence on the working and performance of an individual business organisation. It has two broad categories as follows:

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