International Business Environment Analysis

Success of a business depends on resources and the environment of the organisation where it is located. So business begins, multiplies, or flourishes and ends in its environment. It exchanges resources with the environment. A business organisation collects inputs like man, money, materials, and machines, and provides output like goods and services in the environment and society. Environment means surrounding. Business environment is defined as a force that affects the performance of the organisation. And includes internal and external factors of the organisation. It provides both opportunities and threats as well as strength and weaknesses. So understanding of the environment is required for policy formulation and strategy formulation and

Employees: Employees are the most important asset of any organisation. It is the major internal factor. It works inside the organisation. It is within the control of the organisation. They differ in competency, knowledge, morality, attitude, desire and intention. The mission of the top management is to create commitment and involve employees into the task at hand and conflict if there is a difference in goals and beliefs of managers and employees. ii. Organisation structure:Organisation structure is the relationship maintained inside the organization. It is the arrangement of various facilities, pattern of relationships among different departments, responsibility, authority and communication inside the organisation. It normally follows the strategy of the organisation. iii. Organisation culture:Organisation structure is the sets of norms and values that aid the members to understand what the organisation stands for, how it works, what it considers, cultural values of business and etc. Culture helps in people to work together as teams.

The above mentioned factors influence the decisions made, but are under the control as they are internal to the

The government’s Foreign policy

6. Values and ideology of political parties

Legal Environment:

Legal environment includes the laws and various legislations passed in the parliament. The businessmen cannot overlook the legislations as they have to conduct business transactions within the framework of legal environment.

The common legislation passed that has affected the business transactions are:

• Trade Mark Act

• Essential Commodity Act

• Weights and Measures Act, etc.

Legal environments put constraints on the businessmen most of the time, but sometimes they provide opportunities too. The common instances of Indian legal environment which have influenced business transactions recently are:

1. Deregulation of capital market has made it easy for businessman to collect capital from primary market.

2. Removal of control from the foreign exchange and liberalisation in investment is encouraging foreign investors and NRIs to invest in Indian capital market.

3. Advertisement of alcoholic product is prohibited.

4. Compulsory to give statutory warning in Tobacco production.

5. Delicensing policy of industries.

Some Aspects of Legal Environment are:

1. Various laws and legislative acts.

2. Legal policies related to