Definition of Business :

Modern business covers complex field of industry and

commerce which involve activities related to both
production and distribution. These activities on one hand
satisfy society's needs and desires and on the other hand
having profit to business firm.

Scope of business is very vast.

Activities are undertaken for profit then only it is called as
business.
Nature of Modern Business :
1 Large in size :
This is the era of large size business.
Fortune 500 companies.
1 Wal mart stores U.K.
2 Exxon Mobil U.K.
3 Royal Dutch shell U.K.
4 B.P. U.K.
5 Toyota Japan
Seven Indian Companies in Fortune five hundred
Reliance Industries Position no 206
Tata Steel Position no 315
Indian Oil Corporation Position no 116
BPCL Position no 287
HPCL Position no 290
ONGC Position no 335
SBI Position no 380
Majority companies are from USA,Japan and Europe.
Oligopolistic Nature of Business :
Firms are few in number and selling homogeneous or
differentiated products.
Action taken by one firm in respect of price, product,
advertisement is likely to evoke retaliation from other
firm in the same line of business.
If one firm reduce price other firms follow the same path,
it leads to price war and hence every body is loosing.
Most of the firm likely observe non price competition
in the form of non price and variation in quality and design
of the products.
Diversification :
Modern business in its attempt to grow overtime has taken
recourse to diversification.
However diversification may not always contribute to growth of a
business enterprise. In recessionary phase it is quite risky to
aspire for growth by going for unplanned diversification.
Global Reach :
Earlier companies were doing business domestically .
Due to globalisation companies have expanded their
revenue and asset base across countries and engage
in cross border flow of capital, goods and knowledge.
Technology oriented :
In the competitive environment without technological
advancement companies cannot produce a quality product
at a competitive rate.
Companies are spending more on R&D. More research is
made is the country from where company originates from.
Change :
Modern business through systematic innovations bring some
change in their product and create synthetic demand for
products. Otherwise people will not purchase durable
consumer goods by discarding existing goods with them
which are in good condation.
Examples : Colour T.V. -- Black and white T.V. Nylon cloth --
Terrycot cloth – cotton cloth.
Government control :
Government creates an environment which will promote
business. As market economy faces the problem of business
cycles may a times government intervention is required.
In the present recession government of every country gave
bailout package to Industry.
Environment of business :

Environment by definition is something external to an individual

or organization. Therefore in strict sense business environment

refers to all external factors which have a direct or indirect

impact or bearing on activities of business.

Some expert have used the term business in a broad sense.

They have defined business environment as internal and

external factors that have direct or indirect impact on business

or business activities.
Internal environment :

Value System :

No business firm is established for philanthropic purpose.

But persons holding top positions in certain modern

corporate enterprises have some values which influence

their policies, practices and overall internal environment.

These values can be positive or negative.

Examples : Positive Value - J.R.D, Tata, Reliance,

Vijay Merchant.

Negative value : Pharmacy Companies selling duplicate Drug.

Goals and objective :

Apart from traditional goals every organization or a

company has got vision and mission.

Mission – Role that organization plays in a society or

purpose behind existence of organization.

Mission of companies :

Ranbaxy : To become research based pharmaceutical

industry.

U T I : To keep a common man is sharp in sharp focus

to encourage saving and investment habits among

them.

Canara Bank : Our mission is to be most competitive

and progressive institution in our banking industry.

Arvind Mill : To achive global dominance.

I T M : To provide industry relevant management

education,training and consultancy in various

discipline of management and add value inter ail to

provide educational opportunities to economically

disadvantaged by providing financial assistance to

mold them in to contributing citizen of the world.

Management structure :

How is the Board of Directors !

1 Made up of Family members

2 Professionals

3 How quick decisions are taken?

Inter power relationship :

Relationship between

Board --- Sr. Management (Executive) -- Share holders

Technology : It makes labor obsolete,

Research and development of company and the

speed at which technological changes occur in it

determine company's internal environment which in

tern influence business decisions in decisive manner

Human Resources :

The quality of human resources of a company depends

largely on skill, commitments, attitude and morale of the

employee. Whether these employees work i company or for

company makes all differences in the work culture of the

company.

Company concern for employee and employee concern for

Company both grow.

Problems of today's employees – Nuclear family, Travelling.

Macro Environment : It refers to all those economic and non
Economic factors which exercise their influence on the business
activity in general and thus determine opportunities that a
company may have to promote its business.
Macro environment

Economic Non Economic.