I-5 CHAPTER 1 1.1 CHAPTER 2 2.1 CHAPTER 3 3.1 CHAPTER 4 4.1 CHAPTER 5 5.1 CHAPTER 6 6.1 SOLVED PAPER: DEC. 2021 (MEMORY BASED) P.1 SOLVED PAPER: JUNE 2022 (MEMORY BASED) P.6 Contents
2.1 The success of every organization is determined by its responsiveness to the environ ment. To be able to retain competitive advantage, organizations need to examine their environment both external and internal and respond accordingly. -Kazmi SYNOPSIS TEST YOUR KNOWLEDGE It is not the strongest of the species that survive, not the most intelligent, but it is the one that is most responsive to change. Charles Darwin CHAPTER 2 BUSINESS ENVIRONMENT
Business environment is the aggregate of all conditions, events and influences that surround and affect business. Keith Davis
The environment includes factors outside the firm which can lead to opportunities for or threats to the firm. Although there are many factors, the most important of the sectors are socio-economic, technological, supplier, competitors, and government.
Barry M. Richman and Melvgn Copen
Business environment refers to “the total of all things external to firms and industries which affect their organisation and operation. Bayord O. Wheeler
Business environment encompasses the climate or set of conditions, economic, social, political, or institutional in which business operations are conducted.
Arthtur M. Weimer
Glueck and Jauch
2.12.2 INTRODUCTION ba 2.2 MEANING OF BUSINESS ENVIRONMENT
Environment consists of factors that are largely if not totally, external and beyond the control of individual industrial enterprise and their managements. These are essentially the ‘givers’ within which firms and their management must operate in a specific country and they vary, often greatly, from country to country.
Definitions of Business Environment
2.3 2.3 CHARACTERISTICS OF BUSINESS ENVIRONMENT 1 Complex closely inter-relatedcomplexchangeinone element affects the other elements For example 2 Dynamic For example
2.4 DID YOU KNOW‘Over the Top’ 3 Relativity For example 4 Uncertainty For example 5 Multi-Faceted For example
2.5 6 Far ImpactReaching For CHECKexampleYOUR PROGRESS 1. In order to survive over the long term, a company must have the: a b c a b d 2. Organic objective of business a b c d [Nov. 2019]
2.63.Which of the following capability a company require to survive in long term? dbac [July 2021] 4. Which of the following is not an important characteristic of business environment? a b c d [Nov. 2020] 5. What is not a characteristic of business environment? a b c d [CA CPT May 2019] 6. Which of the following are not characteristics of business environment: a b c d [CA CPT May 2018] 7. Which is not a feature of business environment? a b c d [CA CPT Nov. 2018] [Ans.: 1 c 2 d 3 b 4 b 5 a 6 c and 7 a ] 2.4 IMPORTANCE OF BUSINESS ENVIRONMENT inherent capabilities are ready to adapt would be successful fail to adapt to their environment unlikely to survive
2.7 1 First AdvantageMover determining the opportunitiesinsteadoflosing them to Forcompetitorsexample 2 Early SignalWarning aware of the impending threat or Forcrisisexample 3 FocusCustomer makes the management sensitive to the changing needs For example 4 FormulationStrategy provides relevant information basis for strategy making For example enables an organisation to analyse its competitors’ strategies 5 Change Agent agents of change create a drive for change
2.8 For example 6 Public Image firm can improve its image Reliance Industries, ICICI Bank enables business to be responsive 7 LearningContinuous broad based and ongoing education in touch with the changing scenariomanagers can react in an appropriate manner can keep the organisation dynamic 2.5 RELATIONSHIP BETWEEN ORGANIZATION AND ITS ENVIRONMENT1Exchangeofinformation
2.9 2 Exchange of resources 5 M’s DID YOU KNOW: This process of perceiving the needs of the external environment and catering to them is called as interaction process 3 Exchange of influence and power There are two aspects in this regard: (a) Organization is conditioned and constrained (b) Organization may be well-positioned
2.62.10ENVIRONMENTAL INFLUENCES ON BUSINESS Barry M. Richman and Melvyn Copen Environment factors or constraint are largely if not totally, external and beyond the control of individual industrial enterprises and their managements. These are es sentially the ‘givers’ within which firms and their managements must operate in a specific country and they vary, often greatly, from country to country depends on the manner interacts with its environment recognize all the various elements of the environmentidentify, appraise, and respond Business functions as a part of broader environment CHECK YOUR PROGRESS 1. The interaction between Business and its Environment, helps the business in: dbac
2.11 2. Which one of the following is not an advantage of Business Environment to the business? dbac 3. Which one of the following is the major areas as regards interaction of organisation and its environment? a b c d 4. In relation to resources, “5M” represents: dbac 5. What are the three classes of organization’s internal responses that busi ness can opt? dbac [July 2021] 6. ABC company is aiming towards Joint venture and partnership with other firms to manage uncertainly. This is an example of following type of Orga nizational response to the environment? a b c d [Nov. 2020] 7. Which one of the following statement is incorrect? bacd
2.128.Which of the following is/are included in man-made structures within an environment? a b c d [Ans.: 1 d 2 d 3 d 4 a 5 c 6 b 7 d and 8 d ] 2.7 ENVIRONMENTAL ANALYSIS Environmental Analysis2 UtilitySteps of Environment Analysis: Goals of Environment Analysis: bac
2.13 2.8 ENVIRONMENTAL SCANNING success of the organisation depends upon these factors Environmental scanning3 process by which organizations monitor their relevantprocessenvironmentofgathering information 1 Events happening in the internal or external 2 Trends general tendencies or the courses of action 3 Issues Issues current concerns that arise in response to events and trends 4 Expectations demands made by interested groups Importance: to identify opportunities and threats
2.14 impact of different events, trends, issues and expectations more effective than those which do not 2.9 COMPONENTS OF BUSINESS ENVIRONMENT 1 EnvironmentInternal4 component of the business presentenvironmentinside the organization encompasses within an organizationThefactorswhich are under the control of the organization a Value System b Vision, Mission and Objectives c Organizational Structure
2.15 d Corporate Culture e Human Resources f Physical Resources and Technological Capabilities 2 EnvironmentExternal does not operate in a complexvacuumbusiness environment outside the businesscreate pressure two major types It has been discussed separately under Para 2.11 of the chapter. 2.10 SWOT ANALYSIS5 internal and external factors designed to facilitate
2.16Strengths skill, resource, or other advantage Weaknesses lack of skills, resources Opportunities feature of the external environment which creates conditions that a business can exploit to its advantage Threats external environment which cause problemsCHECK YOUR PROGRESS 1. Business Environment analysis help in: dbac [CA CPT Nov. 2018] 2. Environmental Scanning must identify. dbac 3. ____________ is important and specific occurrence taking place in different environmental sectors. a b c d [CA CPT Nov. 2018] 4. __________ are the general tendencies or the causes of action along which events take place. a b c d 5. While scanning environment, events are which of the following? ba
2.17 dc [July 2021] 6. Internal Environment includes a b c d [CA CPT May 2019] 7. Opportunity is a b c d [CA CPT May 2019] 8. SWOT stands for: dbac [CA CPT May 2018] 9. The business should continuously ………….. and ………….. to the environ ment if it is to survive and prosper. a b c d [July 2021] 10. A ___________ is inherent capacity which an organisation can use to gain strategic advantage over it’s competitors. a b c d [CA CPT Nov. 2018] [Ans.: 1 d 2 c 3 a 4 c 5 d 6 d 7 c 8 a 9 b and 10 a ] 2.11 ELEMENTS OF EXTERNAL ENVIRONMENT ba
Rs. : 325 | USD : 33 AUTHOR : C.B Gupta , Ritu Gupta PUBLISHER : TAXMANN DATE OF PUBLICATION : July 2022 EDITION : 3rd Edition ISBN NO : 9789356223257 NO. OF PAGES : 254 BINDING TYPE : PAPERBACK Business & Commercial Knowledge (BCK) | Study MaterialDescription ORDER NOW This book is prepared exclusively for the Foundation Level of Chartered Accountancy Examination requirement. It covers the entire revised, new syllabus as per ICAI. The Present Publication is the 3rd Edition & updated till 30th April 2022 for CA-Founda tion | New Syllabus | Dec. 2022/June 2023 Exams, authored by Dr. C.B. Gupta & Dr. Ritu Gupta, with the following noteworthy features: · [Simple & Lucid Language] has been used throughout the book to present the subject matter [Topic-wise Coverage] and presentation of concepts · Coverage of this book includes: Practice Questions from the ICAI Past Exam Questions till June 2022 Exam | Memory Based · [Most Amended & Updated] Questions of Business and Commercial Knowledge have been updated as per the current scenario · Student-Oriented Book] The authors have developed this book, keeping in mind the following factors: Interaction of the authors with their students, with specific emphasis on difficulties faced by students in the examina Shapedtions by the authors' experience of teaching the subject matter at different levels Reactions and responses of students have also been incorpo rated at different places in the book