Unit 1 Economic Environment of Business
UNIT 1 ECONOMIC ENVIRONMENT OF BUSINESS
Objectives
After studying this unit, you should be able to :
• Define what you mean by “environment”
• Classify the complex environmental variable on the basis of objective criteria
• Identify the critical elements of economic environment of business
• Analyse the interactions between economic and non-economic environment
• Explain the impact of economic environment on business management; and
• Illustrate your understanding of economic environment with reference to the Indian business situation.
Structure
1.1 Introduction
1.2 Environment of Business
1.3 Some Basic Propositions
1.4 Economic Environment
1.5 Critical Elements
1.6 Indian Economic Environment
1.7 Economic Environment and Business Management 1.8 Economic and Non-Economic Environment : The Interaction Matrix
1.9 Summary
1.10 Key Words
1.11 Further Reading
1.12 Self-assessment Questions
1.1 INTRODUCTION
You may have a variety of reasons for studying this course, but the main reason, we presume, is to become a successful manager. Your success or failure as a manager depends on a number of factors and these factors may not always be within your control; very often such factors constitute your work environment. These include your job, your department, your organisation, your nation and the world around you. After all, as a manager you do not function in a vacuum. You exist and operate within and not without, an environment. Therefore as a manger when you think, or take decisions, you cannot neglect the limitations of your environment. Just think for a while and then answer.
Don’t you arrive at decisions after examining the possible reactions from the environment in which you are placed ? Say, as a marketing manager, would you not study your market environment before launching a new product ? Or, as a finance manager, wouldn’t you study how the capital and money markets of the country are structured and organised before
Objectives
After studying this unit, you should be able to :
• Define what you mean by “environment”
• Classify the complex environmental variable on the basis of objective criteria
• Identify the critical elements of economic environment of business
• Analyse the interactions between economic and non-economic environment
• Explain the impact of economic environment on business management; and
• Illustrate your understanding of economic environment with reference to the Indian business situation.
Structure
1.1 Introduction
1.2 Environment of Business
1.3 Some Basic Propositions
1.4 Economic Environment
1.5 Critical Elements
1.6 Indian Economic Environment
1.7 Economic Environment and Business Management 1.8 Economic and Non-Economic Environment : The Interaction Matrix
1.9 Summary
1.10 Key Words
1.11 Further Reading
1.12 Self-assessment Questions
1.1 INTRODUCTION
You may have a variety of reasons for studying this course, but the main reason, we presume, is to become a successful manager. Your success or failure as a manager depends on a number of factors and these factors may not always be within your control; very often such factors constitute your work environment. These include your job, your department, your organisation, your nation and the world around you. After all, as a manager you do not function in a vacuum. You exist and operate within and not without, an environment. Therefore as a manger when you think, or take decisions, you cannot neglect the limitations of your environment. Just think for a while and then answer.
Don’t you arrive at decisions after examining the possible reactions from the environment in which you are placed ? Say, as a marketing manager, would you not study your market environment before launching a new product ? Or, as a finance manager, wouldn’t you study how the capital and money markets of the country are structured and organised before