payments, rate of savings and investments etc. form an important part of economic environment. ) Development of financial market: The organisation and development of money market, capital market securities market and, the banking system has a greater impact. ) Economic structure: The Economic structure includes capital formation, investment pattern, composition of trade balance, occupational distribution of workforce, and the structure of national output.
12th Commerce Unit - - . . PM the funding of political parties by business houses and the clout wielded by them. ) The image of the leader and the country in the inter-national arena.
) Legal framework of business and their degree of flexibility. ) The constitution of the nation. ) The Foreign policy of the country with special reference to tariffs and free trade. IV.
Geo-physical environment – The natural, geographical and ecological factors have a bearing on the business. These are as follows; ) the availability of natural resources like minerals oil .etc, since setting up of industries requires availability of raw materials ) the weather and climatic conditions and availability of water and other natural resources is essential for the agricultural sector . ) topographical factors like the terrain impacts type of business since the demand and consumption pattern may vary in these regions. E.g in the the hilly region mode of transport will have to be modified to tackle the terrain.
) ecological factors are now gaining momentum, since the governments across the globe are framing stringent policies for ecological conservation and prevention of pollution. The ban on use of plastic bags imposed by the Ooty corporation is an example. ) location of certain industries is influenced by the geographical conditions For e.g In Tamilnadu the concentration of cotton textile industry in Coimbatore is due to conducive weather conditions. .
) availability of natural harbours and port facilities for transporting goods . V. Technological environment – The development in the IT and telecommunications has created a global market. Technology is widely II.
Socio-Cultural environment - Business is a part of the society .Social environment refers to the sum total