- Business environment means all external factors that affect a business but are outside its control.
- It includes economic, social, political and technological forces operating outside the business.
- Consumers, competitors, government, courts and media are also part of the business environment.
- Changes in government policies, taxes and political conditions directly affect business performance.
- Technological changes, changing customer tastes and increasing competition influence demand, costs and profits.
Topics
Principles and Functions of Management
Nature and Significance of Management
- Concept of Management
- Objectives of Management
- Importance of Management
- Management as an Art, Science and Profession
- Levels of Management
- Functions of Management
- Coordination as an Essence of Management
- Management as an Art
- Management as a Science
- Management as a Profession
- Overview of Nature and Significance of Management
Principles of Management
- Concept of Management Principles
- Significance of Management Principles
- Henry Fayol's Administrative Theory of Management
- Frederick Winslow Taylor's Scientific Management Theory
- Standardisation and Simplification of Work
- Overview of Principles of Management
Business Environment
- Concept of Business Environment
- Importance of Business Environment
- External Factors> Natural Environment
- Impact of Government Policy Changes on Business with Special Reference to Liberalization, Privatization and Globalization in India
- External Factors> Economic Environment
- Overview of Business Environment
Planning
- Planning
- Limitation of Planning
- Planning Process
- Objective of Single Use and Standing Plans
- Strategy of Single Use and Standing Plans
- Policy of Single Use and Standing Plans
- Single Use and Standing Plans - Method Rule
- Budget and Programme
- Types of Plans
- Overview of Planning
Organising
- Organising
- Structure of Organisation
- Concept of Delegation of Authority
- Elements of Delegation
- Importance of Delegation of Authority
- Concept of Decentralization
- Importance of Decentralization
- Steps in the Process of Organising
- Overview of Organising
Staffing
- Staffing
- Staffing as a Part of Human Resource Management
- Evolution of Human Resource Management
- Staffing Process
- Staffing - Recruitment Process
- Steps in Employee Selection Process
- Concept of Training and Development
- Importance of Training and Development
- Methods of Training
- Overview of Staffing
Directing
- Directing
- Principles of Directing
- Elements of Directing
- Concept of Supervision
- Importance of Supervision
- Function of a Supervisor
- Concept of Motivation
- Importance of Motivation
- Maslow’s Hierarchy of Needs
- Motivation - Financial and Non Financial Incentives
- Concept of Leadership
- Importance of Leadership
- Leadership Styles
- Communication
- Elements of the Communication Process
- Importance of Communication in Business
- Formal and Informal Communication
- Barriers to Communication
- How to Overcome the Barriers
- Overview of Directing
Controlling
- Controlling
- Features of Controlling
- Relationship Between Planning and Controlling
- Techniques of Managerial Control
- Responsibility Accounting
- Management Audit
- Overview of Controlling
Business Finance and Marketing
Financial Management
- Concept of Financial Management
- Role and Objectives of Financial Management
- Financial decisions - investment
- Financial Decisions - Financing and Dividend
- Concept of Financial Planning
- Importance of Financial Planning
- Concept of Capital Structure
- Concept of Fixed and Working Capital
- Factors Affecting Fixed and Working Capital Requirements
- Overview of Financial Management
Marketing
- Concept of Financial Market
- Types of Financial Markets
- Money Market in India
- Capital Market in India
- Kinds of Capital Market
- Methods of Floatation in the Primary Market
- Stock Exchange
- Securities and Exchange Board of India (SEBI)
- Distinction Between Capital Market and Money Market
- National Stock Exchange of India (NSE)
- Overview of Marketing
Consumer Protection
- Concept of Consumer Protection
- Consumer Protection Act 1986 (COPRA)
- Concept of Consumer
- Responsibilities of Consumers
- Legal Redressal Machinery Under Consumer Protection Act 1986
- Remedies Available to the Consumer Under Consumer Protection Act 1986
- Consumer Awareness
- Role of Consumer Organisations and NGO's
- Legal Protection to Consumers
- Overview of Consumer Protection
Estimated time: 36 minutes
CBSE: Class 12
Key Points: Concept of Business Environment
CBSE: Class 12
Key Points: Features of Business Environment
- Totality of External Forces – It includes all outside factors affecting business.
- Specific and General Forces – Some forces affect directly; others affect indirectly.
- Interrelatedness – All environmental factors are connected.
- Dynamic Nature – It keeps changing over time.
- Uncertainty – Future changes are hard to predict.
- Complexity – It has many interrelated factors.
- Relativity – It differs from country to country.
CBSE: Class 12
Key Points: Importance of Business Environment
- Identifies Opportunities – Helps firms find and use new opportunities early.
- Identifies Threats – Warns about dangers like competition or new substitutes.
- Provides Resources – Environment supplies finance, labour, raw materials, etc.
- Helps Handle Changes – Enables firms to adjust to fast market and technology changes.
- Supports Planning – Helps in making better plans and business policies.
- Improves Performance – Firms that understand the environment perform better and survive longer.
CBSE: Class 12
Key Points: Dimensions of Business Environment
- Economic Environment – Interest rates, inflation, income, etc., affect demand and costs.
- Social Environment – Customs, values, and trends influence business activities.
- Technological Environment – New technology changes production and competition.
- Political Environment – Political stability and government policies affect business growth.
- Legal Environment – Laws and regulations must be followed to avoid problems.
CBSE: Class 12
Key Points: Components of Economic Environment
- Structure of Economy – Role of private and public sectors in the economy.
- Growth Rates – Growth of GNP and per capita income shows economic progress.
- Savings and Investment – Higher savings and investment support business growth.
- Trade and Balance of Payments – Imports, exports, and foreign exchange reserves affect business opportunities.
- Production and Infrastructure – Agricultural and industrial output, transport, communication, money supply, and public debt influence economic activities.
CBSE: Class 12
Key Points: Major Elements of the Political Environment
- Lifestyle and Consumer Preferences – Changes in attitudes, lifestyles, and buying habits affect business demand.
- Quality of Life and Life Expectancy – Increasing concern for better living standards creates new market opportunities.
- Workforce Changes – Expectations from jobs and increasing participation of women influence business policies.
- Population Changes – Birth rate, death rate, and population shifts affect market size and labour supply.
- Education and Family Structure – Literacy rates, education level, and family composition influence consumption patterns.
CBSE: Class 12
Key Points: Major Elements of the Political Environment
- Political System – Type and stability of government affect business.
- Government Ideology – Ruling party’s ideas influence economic policies.
- Political Leadership – Leaders’ thinking and honesty impact business environment.
- Government Intervention – Level of control or support affects operations.
- Foreign Relations – Relations with other countries affect trade and business.
CBSE: Class 12
Key Points: Economic Environment in India
- Economic Environment – Includes development stage, policies, planning, and infrastructure affecting business.
- Post-Independence Situation – India was mainly agricultural with low productivity and high poverty.
- Planning Objectives – Growth, self-reliance, reduce poverty and inequality.
- Public vs Private Role – Public sector led key industries; private sector worked under government control.
- 1991 Reforms (LPG) – Liberalisation, Privatisation, and Globalisation to boost industrial growth.
CBSE: Class 12
Key Points: Liberalisation
- End of Licence Raj – Removed unnecessary licences and government controls on industries.
- Freedom of Business Expansion – Firms can expand or reduce their operations freely.
- Free Movement of Goods – Removed restrictions on the movement of goods and services.
- Price and Tax Freedom – Businesses can fix prices freely and tax rates were reduced.
- Encouragement to Foreign Investment – Simplified imports/exports and promoted foreign capital and technology.
CBSE: Class 12
Key Points: Privatisation
- Meaning – Giving a greater role to the private sector and reducing the role of the public sector.
- New Industrial Policy 1991 – Redefined the role of the public sector in the economy.
- Disinvestment – Government sold part of its share in public sector enterprises to private sector.
- Transfer of Ownership – If the government share falls below 51%, control shifts to the private sector.
- Handling Sick Units – Loss-making public enterprises were referred to BIFR for revival or closure.
CBSE: Class 12
Key Points: Globalisation
- Meaning – Integration of Indian economy with the world economy.
- Import Liberalisation – Removed licensing, tariff, and quantitative restrictions on imports.
- Export Promotion – Encouraged exports by reducing tariffs and reforming foreign exchange policies.
- Global Interaction – Increased interaction and interdependence among countries.
- 1991 Reforms – India adopted globalisation through liberal trade policies and technological advancement.
CBSE: Class 12
Key Points: Demonetisation
- Demonetisation (2016) – ₹500 and ₹1000 notes were made invalid.
- Main Aim – To control black money, corruption, and fake currency.
- Bank Deposits Increased – More money was deposited in banks.
- Digital Payments Promoted – Encouraged a cash-less economy.
- Economic Impact – Tax collection increased; cash use and real estate prices declined.
CBSE: Class 12
Key Points: Impact of Demonetisation
| S. No. | Area | Impact |
|---|---|---|
| 1. | Money/Interest Rates | (i) Decline in cash transactions (ii) Bank deposits increased (iii) Increase in financial savings |
| 2. | Private Wealth | Declined as some demonetised notes were not returned and real estate prices fell |
| 3. | Public Sector Wealth | No effect |
| 4. | Digitisation | Digital transactions among new users (RuPay/AEPS) increased |
| 5. | Real Estate | Prices declined |
| 6. | Tax Collection | Increase in income tax collection due to higher disclosure |
