Learn CBSE Business Studies Index Terms for Class 12, Chapter 3 Including Definitions and Meanings
1. Business Environment – The business environment is concerned with those parts of the environmental elements of a business enterprise that influence or impact its activities and decide its viability. It alludes to variables and powers that influence a company’s capacity to build and keep up with effective client connections.
The business environment involves economic, social, legal, technological, and political circumstances which are contemplated properly for decision-making and enhancing the achievement of the trading concern. In distinction to the precise environment, these aspects manifest the prevailing environment, which often affects many companies at the same time. However, the administration of every business can profit from being informed of these dimensions rather than being unbiased in them.
2. Opportunities – Opportunities are the chances that could appear for an organisation. This could either help or hinder the company at a time of rising. Opportunities are usually in the form of lateral growth or in the form of acquisitions. For example, when a company grows laterally or assumes and takes over another company within the industry.
3. Threats – In business analysis, threats are whatever might harm your association, products, or organisation. This could incorporate anything from different organisations (who may barge in on their market share) to supply deficiencies, which may keep a company from producing an item.
4. Economic Environment – The economic environment consists of an economic system, economic policies, and economic conditions prevailing in a country. Interest rates, taxes, inflation, stock market indices, the value of the rupee, personal disposable income, unemployment rate, etc., are the factors that affect the economic environment. For example, a rise in the disposable income of people due to a decrease in tax rates in a country creates more demand for products.
5. Political Environment – Political environment means that the actions taken by the government, potentially affect the routine activities of any business or company on a domestic or global level. The success of business and industry depends upon the government’s attitude towards business and industry, stability of government, and peace in the country. For example, political stability and the Central Government’s attitudes towards business, industry, and employment, have attracted many national and international business entrepreneurs to invest in India.
6. Social Environment – The social environment of business incorporates the qualities, mentalities, convictions, needs, and wants of the consuming public. The demography studies that depict the populace by sex, age, nationality, area, occupation, training, and pay are continually advancing.
In other words, the social environment consists of social forces like traditions, values, social trends, level of education, the standard of living, etc. All these forces have a vast impact on business.
Tradition: It refers to the transmission of customs, beliefs, and also social festivals that have lasted for decades, such as Ugadi, Deepavali, Eid, Christmas, etc.
Impact: More demand during festivals provides opportunities for various businesses.
Values: These refer to moral principles prevailing in society, such as freedom of choice in the market, social justice, equality of opportunity, non-discriminatory practices, etc.
Impact: Organisations that believe in values maintain a good reputation in society and find ease in selling their products.
Social Trends: It refers to a general change or development in society, such as health and fitness trends among urban dwellers.
Impact: Health and fitness trends have created a demand for gyms, mineral water, etc.
7. Technological Environment – Technological environment consists of scientific improvements and innovations which provide new ways of producing goods, rendering services, and new methods and techniques to operate a business. A firm needs to understand the level of scientific achievements of a particular economy before introducing its products.
Technological compatibility of products also drives the demand for manufactured products by a company. For example, E-commerce has changed the scenario of doing business, buying goods, and availing services at the click of a mouse or through mobile; the Digital India initiative by the Government moved towards a paperless society.
8. Legal Environment – Legal environment includes various laws passed by the government, administrative orders issued by government authorities, court judgments as well as decisions rendered by the Central, State, or Local Governments. Understanding legal knowledge is a prerequisite for the smooth functioning of business and industry. Understanding the legal environment of business houses helps them not to fall into a legal tangle.
The legal environment includes various laws like the Companies Act 2013, Consumer Protection Act 1986, policies relating to licensing and approvals, policies related to foreign trade, etc. For example, labour laws followed by companies help them to keep away from penalties.
9. Liberalisation – Liberalisation is concerned with the reduction of limitations, trade restrictions, and government laws in an economy in return for more prominent interest by private businesses. In politics, regulation is related to old-style radicalism and neoliberalism.
In other words, liberalisation is the process or means of the elimination of control of the state over economic activities. It provides greater autonomy to business enterprises in decision-making and eliminates government interference.
10. Privatisation – Privatisation can suggest several things, including the migration of something from the public sector to the private sector. It is also used as a metonym for deregulation when a massively regulated private firm or industry becomes less organised.
Government services and operations may also be privatised (denationalised). In these circumstances, private entities are tasked with the application of government plans or the execution of government assistance that had earlier been the vision of state-run companies. Some instances involve law enforcement, revenue collection, and prison management.
In other words, it means the transfer of ownership, management, and control of the public sector enterprises to the private sector.
11. Globalisation – The term globalisation refers to the integration of the economy of the nation with the world economy. It is a multifaceted aspect. It is a result of the collection of multiple strategies that are directed at transforming the world towards greater interdependence and integration.
It includes the creation of networks and pursuits transforming social, economical and geographical barriers. Globalisation tries to build links in such a way that the events in India can be determined by the events happening distances away.
To put it in other words, globalisation is the method of interaction and union among people, corporations, and governments universally. Globalisation is a process by which the world is turning out to be progressively interconnected because of enormously expanded exchange and social trade. Globalisation has expanded the production of products and services.
We hope that the offered Business Studies Index Terms for Class 12 with respect to Chapter 3: Business Environment will help you.
Related Links:
Class 12 Business Studies Index Terms – Chapter 1: Nature and Significance of Management
Class 12 Business Studies Index Terms – Chapter 2: Principles of Management
Class 12 Business Studies Index Terms – Chapter 4: Planning
Class 12 Business Studies Index Terms – Chapter 5: Organising
Class 12 Business Studies Index Terms – Chapter 6: Staffing
Class 12 Business Studies Index Terms – Chapter 7: Directing
Class 12 Business Studies Index Terms – Chapter 8: Controlling
Class 12 Business Studies Index Terms Part II Chapter 1: Financial Management
Class 12 Business Studies Index Terms Part II Chapter 2: Consumer Protection
