Explain how does the understanding of business environment help the management in the following:
(a) Tapping useful resources; and
(b) Coping with rapid changes
(A) Tapping useful resources: Environment is the source of all resources a business needs for its operation. It takes natural resources, human resource and financial resource and convert them to goods and services to customers, make payment of taxes to government, return on financial investment to investors and so on. As an organisation is completely dependent on the resources from environment, a manager should have a good understanding about business environment.
(B) Coping with rapid changes: Business environment is increasingly dynamic where changes are taking place in a fast pace. Business, Social, political, economic and technological environment is changing in such a pace that managers must understand and examine the environment thoroughly and develop suitable course of action.
An environmental conscious multinational company “AXN Ltd.” follows certain well-defined business principles that result to minimize the employee turnover. Following are some of the important environmental factors followed by ‘AXN Ltd.’
(1) Honour the law of every country in which it operates.
(2) Respect the culture and customs of all nations.
(3) Provide clean and safe products to enhance the quality of life throughout the world.
(4) Develop a culture in the company that enhances individual creativity and team work while honouring mutual trust and respect between management and labour.
From the above:
(i) identify and state any one general principle of management and any one dimension of business environment.
(ii) also identify any two values which the above guiding principles and environmental factors are conveying to the society.
What is included in ‘Political Environment of business? State.
Why is the understanding of business environment important for managers? Explain with the help of any four points.
State any five impacts of government policy changes on business and industry.
