Page 44 - DMGT401Business Environment

Unit 1: Indian Business Environment

The face of the Indian economy has changed drastically since 1991. Earlier, pricing in India Notes
was governed by administered price mechanisms, but market forces today govern pricing.
India's external position is also significantly stronger. Exports, specifically of services,
have grown substantially in 2004-05. Growth in services has largely been fueled by the
information technology boom in which India has emerged as a world leader.
The thrust of reforms in the financial sector relates to privatization and restructuring.
Public sector banks have been permitted diversified ownership by law subject to 51 per
cent holding of Government/RBI/SBI. IFCI and IRBI were converted into public limited
companies.
The process by which organization monitors their relevant environment to identify
opportunities and threats affecting their business is known as environmental scanning.

Analysis is done by means of a search of verbal and written information, spying, forecasting
and formal studies and information system.
Various changes take place in the environment and it is difficult, cumbersome and a costly
affair to keep a regular eye on every aspect of these changes. So it is essential for a
strategist to rate the environmental factors on the basis of criticality and then invest time
and resources in environmental analysis.
Changes in the microenvironment may be systematic or discontinuous. Gradual changes,
changes in a phased manner, or those that are predictable are systematic changes.
ETOP is designed to present programs that foster development of new cost-effective
environmental technologies. It is an education-based organization. It concentrates on
workplace skills and job competencies.
It is important to 'scan' the external environment before creating business plans or when
evaluating existing ones. Doing this takes the form of a SLEPT analysis and thus there is a
scanning or an investigation of the Social, Legal, Economic, Political, and Technological
influences that can be or likely to be on a business.
Some management gurus believe that in today's turbulent business environment the best
scanning method available is continuous scanning. This allows the firm to act quickly,
take advantage of opportunities before competitors do, and respond to environmental
threats before significant damage is done.
When we refer to environmental scanning, we usually refer just to the macro environment,
but it can also include industry and competitor analysis, consumer analysis, product
innovations, and the company's internal environment.
Planning in India dates back to the 1930s. Even before independence, the colonial
government had established a planning board that lasted from 1944 to 1946. Private
industrialists and economists published three development plans in 1944.
India's centralized planning process is governed by seven cardinal policy objectives:
growth; social justice & equity; modernization; self-reliance; food; productivity and
employment. These would continue to be the guiding principles for the Eleventh Plan
(2007-12) which commences from 1st April, 2007.

1.7 Keywords

Ad-Hoc Scanning: Short term, infrequent examinations usually initiated by a crisis

Business Environment: Aggregate of all conditions, events and influences that surround and
affect a business

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