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Business Environment (Features (Dynamic nature, Uncertainty, Inter…
Business Environment
Features
Dynamic nature
Uncertainty
Inter-relatedness
Complexity
Specific and general forces
Relativity
Totality of external forces
Impact of Government Policy Changes on Business and Industry
Necissity for change
Need for developing human resource
Rapidly changing technological environment
Market orientation
More demanding customers
Loss of budgetary support to the public sector
Increasing competition
Features of Liberalization
Freedom in fixing the prices of G&S
red. in tax rates and lifting of unnecessary controls
removal of restrictions on movement of G&S
simplifying procedures for imports & exports
no rest. on expansion
making it easier to attract foreign cap and tech
abolishing licensing req.
Importance
It helps in tapping useful resources
It helps in coping with rapid changes
It helps the firm to identify threats and early warning signals
It helps in assisting in planning and policy formulation
It enables the firm to identify opportunities and getting the 1st mover advantage
It helps in improving performance
Features of NEP
Disinvestment (P)
Foreign capital policy was liberalized. 100% FDI was permitted (L)
De-reservation. only 4 industries reserved (P)
Automatic permission granted for tech agreements with foreign companies (G)
Govt. reduced the no. of industries under compulsory licensing to 6 (L)
FIPB was setup to promote and channelize foreign investment (G)
Dimensions
Technological Environment
New ways of production
New methods and techniques of operating
Political Environment
Stability and Peace
Attitude of the elected govt.
Social Environment
Traditions
Values
Legal Environment
Legislation passed by the govt.
Administrative orders issued by govt authorities
Economic Environment
Inflation rates
∆ Disposable income
Interest rates
Stock market indices
Value of the ₹