Meaning of Business
Environment
The term ‘business environment’
means the sum total of all
individuals, institutions and other
forces that are outside the control
of a business enterprise but that
may affect its performance. As one
writer has put it– “Just take the
universe, subtra...
BUSINESS ENVIRONMENT
How a Rickshaw Puller became an entrepreneur
3
CHAPTER
LEARNING
On what seemed like a regular day at work Dharamveer Kamboj,
a rickshaw puller, was riding through the streets of Delhi when OBJECTIVES
he met with a terrible accident. This was an event that would
change his life forever. Knowing that he wouldn’t be able to go
After studying this
back to his work, he made the decision of returning to his native chapter you will be
village in the Yamunanagar district of Haryana to begin life anew. able to:
Being a school dropout with no technical training of any kind
further restricted his scope in terms of employment. n Explain the
The desire to do something out of the ordinary kept stirring meaning
in his heart time and again. He was on the lookout for the right of business
inspiration and opportunity. Such an opportunity crossed his
path during one of his visits to the outskirts of Jaipur, Ajmer and environment;
Pushkar regions of Rajasthan, where he observed a number of n Discuss the
women self help groups at work. A common sight was women
in the process of making gooseberry laddoos. While this process importance
appeared to be rather simple, the grating of gooseberries of business
on slabs of stone manually with hands was an excruciatingly environment;
painful exercise. There were machines available that could
process the gooseberrys but none of them proved to be cost n Describe the
effective. The industry was so small in scale and the owners so various elements
modest in means that it was impossible for them to buy machines
and put them in use. Dharamveer Kamboj began to think of
of business
ways of making fruit and vegetable processing machines not only environment; and
affordable, but also free of accidental health hazards. Observing
that cutting, grating, juicing and pulverizing involved similar
n Examine the
techniques made him come up with the idea of a multipurpose economic
processing machine that could work equally well for all of these environment
tasks. There was however a big hurdle in the way of Dharamveer.
in India and
His limited education would prove his task to be an uphill battle.
He however was not deterred. He knew problems would come the impact of
his way, but to challenge and overcome them was his motto in Government
life. “Sangharsh hi sabse badi kaamyaabi hai. Agar badhna hai toh policies on
peeche mud kar nahin dekhna hai.”
business and
industry.
Rationalised 2023-24
Ch_03.indd 69 08-08-2022 09:37:32
, 70 Business Studies
This is the truism that Dharamveer Singh Kamboj has always
lived by and was able to somehow convince him and obtain a
funding of ` 25,000 for his project. He began work immediately.
The first prototype of his machine was ready in March 2005.
An unexpected problem of overheating however cropped up.
Even after Dharamveer’s constant trials for the elimination of
this problem, the issue still persisted in the second prototype.
But the thought of giving up never crossed Dharamveer’s mind.
In his third prototype, he had successfully solved the problem of
overheating at last. This prototype was bought by GIAN North
and sent to Kenya on a pilot basis. Based on the feedback, GIAN
asked him to modify it further incorporating provisions that
would make it portable, including the incorporation of foldable
legs. In the fourth machine he also incorporated a sieve to
manage the flow of juice from the machine during the extraction
process. The machine that Dharamveer developed is unique in a
way that it has the capacity to process a wide variety of products
without damaging the seed of the fruit or vegetable.
Source: The National Innovation Foundation
(NIF) – India (nif.org.in)
The above example shows how a universe, subtract from it the subset
machine invented by Dharamveer that represents the organisation,
Kamboj made life easier for women and the remainder is environment”.
workers in unorganised sector. This Thus, the economic, social, political,
innovation resulted in a positive technological and other forces which
impact on food processing business operate outside a business enterprise
i.e., social, economic and technological are part of its environment. So
in addition to enhancing quality also, the individual consumers
or competing enterprises as well
of life.
as the governments, consumer
groups, competitors, courts, media
Meaning of Business and other institutions working
Environment outside an enterprise constitute its
The term ‘business environment’ environment. The important point is
means the sum total of all that these individuals, institutions
individuals, institutions and other and forces are likely to influence the
forces that are outside the control performance of a business enterprise
of a business enterprise but that although they happen to exist
may affect its performance. As one outside its boundaries. For example,
writer has put it– “Just take the changes in government’s economic
Rationalised 2023-24
Ch_03.indd 70 08-08-2022 09:37:32
, Business Environment 71
policies, rapid technological (iii) Inter-relatedness: Different
developments, political uncertainty, elements or parts of business
changes in fashions and tastes environment are closely inter-
of consumers and increased related. For example, increased
competition in the market — all life expectancy of people and
influence the working of a business increased awareness for health
enterprise in important ways. care have increased the demand
Increase in taxes by government for many health products and
can make things expensive to buy. services like soft drinks, fat-free
Technological improvements may cooking oil, and health resorts.
render existing products obsolete. New health products and
Political uncertainty may create fear services have, in turn, changed
in the minds of investors. Changes people’s life styles.
in fashions and tastes of consumers (iv) Dynamic nature: Business
may shift demand in the market environment is dynamic in that
from existing products to new it keeps on changing whether
ones. Increased competition in the in terms of technological imp
market may reduce profit margins rovement, shifts in consumer
of firms. preferences or entry of new
On the basis of the foregoing competition in the market.
disc ussion, it can be said business (v) Uncertainty: Business envir
environment, has the following onment is largely uncertain as it
features:
is very difficult to predict future
(i) Totality of external forces:
happenings, especially when
Business environment is the
environment changes are taking
sum total of all things external
place too frequently as in the
to business firms and, as such,
is aggregative in nature. case of information tech nology
(ii) Specific and general forces: or fashion industries.
Business environment includes (v i ) Complexity: Since business
both specific and general forces. environment consists of
Specific forces (such as investors, numerous interrelated and
customers, competitors and supp dynamic conditions or forces
liers) affect individual enterprises which arise from different
directly and immediately in sources, it becomes difficult
their day-to-day working. to comprehend at once what
General forces (such as social, exactly constitutes a given
political, legal and technological environment. In other words,
conditions) have impact on all environment is a complex
business enterprises and thus phenomenon that is relatively
may affect an individual firm easier to understand in parts
only indirectly. but difficult to grasp in its
Rationalised 2023-24
Ch_03.indd 71 08-08-2022 09:37:32
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller THEEXCELLENCELIBRARY. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.89. You're not tied to anything after your purchase.
