CONCEPT OF ENVIRONMENT

Environment literally means the surroundings, external objects, influences or circumstances

under which someone or something exists. The environment of any organisation is "the
aggregate of all conditions, events and influences that surround and affect it." Since the
environment influences an organisation in so many different ways, its understanding is of
crucial importance. The concept of environment can be understood by looking at some of its
characteristics.

Characteristics of Environment

Business environment (or simply, environment) exhibits many characteristics. Some of the
important, and obvious, characteristics are briefly described here.

1. Environment is complex: The environment consists of a number of factors, events,

conditions, and influences arising from different sources. All these do not exist in isolation but
interact with each other to create entirely new sets of influences. It is difficult to comprehend
at once what factors constitute a given environment. All in all, environment is a complex
phenomenon relatively easier to understand in parts but difficult to grasp in its totality.

2. Environment is dynamic: The environment is constantly changing in nature. Due to the

many and varied influence operating, there is dynamism in the environment causing it to
continuously change its shape and character

3. Environment is multi-faceted: What shape and character an environment assumes depends

on the perception of the observer. A particular change in the environment, or a new
development, may be viewed differently by different observers. This is frequently seen when
the same development is welcomed as an opportunity by one company while another company
perceives it as a threat.

4. Environment has a far-reaching impact: The environment has a far-reaching impact on

organisations. The growth and profitability of an organisation depend critically on the
environment in which it exists. Any environmental change has an impact on the organisation
in several different ways.

Since the environment is complex, dynamic, multi-faceted, and has a far-reaching impact,
dividing it into external and internal components enables us to understand it better. But before
we do that it is important to understand that strategic management is increasingly becoming
conscious of the nature of the environment and the ways that it that affects organisations.

The traditional approach to strategic management has led to an emphasis on control, order, and
predictability. But these are antithetical to the concept of organisations and environment as we
realise now. The organisation and the environment are, in reality, more unpredictable,
uncertain, and non-linear.
Let us get ahead to grapple with the complexity of the environment by its division into internal
and external environments.

Internal and External Environment

The internal environment refers to all factors within an organisation that impact strengths or
cause weaknesses of a strategic nature. The external environment includes all the factors
outside the organisation which yield opportunities or pose threats to the organisation.

The environment in which an organisation exists can, therefore, be described in terms of the
strengths and weakness existing in the internal environment and the opportunities and threats
operating in the external environment. The four environmental influences could be described
as below.

Internal environment

Strength is an inherent capacity which an organisation can use to gain strategic advantage.
Examples of strength are: good reputation among customers, resources, assets, people,
experience, knowledge, data, and capabilities.

Weakness is an inherent Imitation or constraint which creates strategic disadvantages.

Examples of weakness are: gaps in capabilities, financial limitations, low morale, and
overdependence on a single product line.

External environment

Opportunity is a favourable condition in the organisation's environment which enables it to

consolidate and strengthen its position. Examples of opportunity are: economic boom,
favourable demographic shifts, arrival of new technologies, loosening of regulations,
favourable global influences, and unfulfilled customer needs.

Threat is an unfavourable condition in the organisation's environment which creates a risk for,
or causes damage to, the organisation. Examples of threat are: economic downturn,
unfavourable demographic shifts, new competitors, unexpected shifts in consumer tastes,
demanding new regulations, stringent legislation, new technology, and loss of key staff.

An understanding of the external environment, in terms of the opportunities and threats, and
the internal environment, in terms of the strengths and weakness, is crucial for the existence,
growth, and profitability of any organisation. A systematic approach to understanding the
environment is the SWOT analysis that we shall learn about in detail in a later chapter. Let's
focus here on the external environment further.
 Chapter 3: Business and Its Environment | 37 |

and promotion of common welfare programmes; (ii) donating Business managers as decision makers are concerned with the
generously to social causes; (iii) rendering social services; constraints and opportunities that a business environment offers.
(iv) sponsoring social and charitable activities; (v) supplementing For instance, if a new legislation has been enacted, business
State efforts in education and public health and in fighting diseases managers should try to know how that act could affect their firm
such as HIV and cancer; and (vi) ensuring ecological balances by and how they should protect it if any adverse consequence arises
fighting environmental degradation. as a result; if there is any change in the economic environment.
For example, when a new economic policy replaces an old and
settled one, they must adjust their firms’ functioning to it as well as
BUSINESS ENVIRONMENT they can; if there is a change in the overall technology being used
Environment refers to the conditions “concerning the people and due to economic realities, they must be prepared to change with it.
things around you in your life, for example, the buildings you use, For instance, the problem of global warming has necessitated the
the people you live or work with, and the general situation you are substitution of the existing bulbs with compact fluorescent lamps
in.”15 To put it precisely, environment could mean something exter- (CFLs); if there is a shift in public attitude towards business, say
nal to an individual or an organization. In the context of business, its the public expects more environment-friendly products, they must
environment may refer to all the external factors which have bearing readjust their production system to reflect the changed attitudes of
on its activities. A business environment could be split into inter- the public; if there is a substantial change in the educational pattern,
nal and external environment which in turn comprises micro- and they must be prepared to utilize newly trained people appropriately.
macro-environment. Apart from these, a business also is influenced Thus, it is the responsibility of business managers to adapt their
by both the economic and the non-economic environment. In the firm to the changing business environment if they want their firms
following pages, we will analyse business and its environment and to stay afloat successfully.
how these are influenced by economic and non-economic environ-
ments. In the context of business, the term environment may refer The Internal Environment
to the totality of factors that are external and beyond the control The term internal environment refers to the framework, the situation
of individual enterprises and their managements. The operations and the factors within the business organization and their impacts
of a business are influenced by the environment, the value system on its working. The management structure of an organization, the
prevalent in the society, the laws enacted by the government, the relationship that exists internally between the stakeholders such as
rules and regulations that govern the economy, the monetary poli- shareholders, employees, managers and the board of directors, the
cies of the central bank, the fiscal policies of the central and state physical assets, technological capabilities, its human, financial and
governments, the institutional set up of the economy, the import marketing resources along with the organizational goals and objec-
and exports policy, the government’s attitude and policies towards tives and the value system that influences its functioning would all
foreign capital and enterprise, and so on. The business environment, constitute the internal environment of business.
thus, provides the macroeconomic context within which the firm It is important for a firm to realize its objective of making a
operates. Figure 3.2 illustrates the various factors that act and inter- sumptuous profit and for that its management structure should be
act with one another in a business environment. conducive to carry out its activities in a smooth and efficient manner.

Business environment

Internal
External environment
environment

Microeconomic Macroeconomic
Management structure Input suppliers Demand-price
Stakeholders Workers and unions Savings/Investment
Relationships Customers Monctary/Fiscal
Physical assets Marketing intermediaries Balance of payments situations
Technology resources Competitors and public Overall growth activity
Human resources
Economic Non-economic
Financial resources
Economic system Political-legal
Firm’s goals objectives
Macroeconomic scenario Socio-cultural
Value system
Financial system Natural
Economic policies Demographic
Economic legislations Macroeconomic
Economic planning variables

Figure 3.2 The Factors that Affect a Business Environment

| 38 | Part I: Fundamental Concepts

In modern business organizations, most of which are based on the to be eminently successful. Of course, it also depends on how
joint stock company format, the management structure is headed by well they are treated by the management, the conditions of
a board of directors involved in giving directions, strategic decision- employment, compensations paid and the like. In this context, it
making, forward planning and evaluation of the firms’ activities with is necessary to stress that the importance of the human resource is
a view to taking corrective measures, if needed. Salaried managers being increasingly understood even in developing countries like
who carry out the instructions of the board of directors on a day- ours. Every industry, be it software services or manufacturing,
to-day basis and respond with alacrity to the issues and problems attaches the highest importance to the training and retention of
that arise in business by making appropriate decisions and executing its employees. Companies make working conditions of employees
these within the framework of company policy and strategy should conducive enough to avoid attrition. Infosys, for instance,
inspire the confidence of the top management and enjoy the trust considers the experience and expertise of its employees such
of the employees to whom they delegate their works. Employees an invaluable asset that it includes it along with the company’s
who carry out routine company activities under the guidance tangible and physical assets in its balance sheet.
of the management must do their jobs with utmost sincerity and A business is driven by its goals and objectives. Business is
devotion to work. The strength and viability of the management organized to ensure profit for its promoters and shareholders. Adam
would largely depend on the relationship amongst the company’s Smith and Milton Freidman were emphatic in their assertion that
shareholders, board of directors and top executives. Any conflict business firms have no other objective except to make profit for
that arises between these groups might jeopardize the company’s their stockholders. In their view, a corporation does not exist for
smooth internal functioning, apart from sullying its reputation. The any other purpose; it definitely does not exist for the purpose of
entire management structure should be well-oiled and seamlessly being engaged in social welfare activities. However, gone are the
organized so as to ensure smooth and frictionless functioning of the days when profit maximization was the only goal of firms. Most
organization. modern businesses aim not only to make profit, but also to be of
For the success of an organization and the realization of its service to society. Corporate social responsibility has become the
goals, the relationship that exists between the internal stakeholders buzzword of business in recent times. Ethical business conduct
is of utmost importance. Shareholders contribute to the capital and best corporate governance practices have become important in
of the company with a view to earning handsome dividends and the globalized business world. To sell their products and to access
capital appreciation of their stocks; employees want adequate large and cheaper capital abroad, following internationally accepted
compensation and appropriate perquisites; managers want job corporate governance practices and environment-friendly business
satisfaction and chances of timely promotion. Thus, there are clear- practices have become extremely important.
cut objectives which guide different internal stakeholders in an Finally, it is the value system that prevails in the organization
organization and during its functioning there could arise frictions that will decide its success in the long term. These values
and conflicts of interests between them, either group wise or emanate from the top management and percolate down to the
individually, as for instance, between a worker and the manager. lowest workforce. In organizations wherein the top echelons of
The success or otherwise of an organization depends very much the organization are motivated by personal greed and single-
on how well a cordial and conducive relationship between various minded pursuit of profit whatever be the cost, they will not be
stakeholders is maintained. able to win the trust and confidence of the work force; besides,
The physical assets of the organization are very important for their lack of ethics would ultimately bring down the edifice of the
its success and competitiveness. The quality of physical assets that organization. WorldCom, Enron, Arthur Andersen, Dynegy, Waste
include a firm’s plant and machinery, production technology, R&D Management, Rite Aid, Adelphia Communications and Imclone
work and distribution, logistics, etc. in the case of a manufacturing Systems of USA were some of America’s mega corporations that
company would help it achieve its efficiency and competitive collapsed in 2002 like a pack of cards because of the misdeeds and
strength vis-à-vis its peers. More importantly, innovation-spurred frauds perpetrated by their top managements on the organizations
technology is assuming greater importance in recent times, reducing they led. Of course, there are other examples to the contrary both
the worth of other tangible physical assets and financial resources. in India and elsewhere.16
This can be demonstrated by Millward Brown 2008 brand Report
which showed that out of the top ten brands of the world, seven
are technology based brands that included Google, GE, Microsoft, The External Environment
IBM, China Mobile, Apple and Nokia. Only three non-technology A business organization is also influenced by certain forces, insti-
brands, Coca-Cola, McDonald’s and Marlboro found their place in tutions and organizations operating from outside. These constitute
the report. the external environment of business. A business is influenced
The most important of all the factors constituting internal both collectively and individually by these factors. The external
environment is the human assets the organization has acquired environment of business can be divided into micro- and macro-
over time. The attitudes, skill sets and expertise, commitment and environment. The micro-environment includes the general public,
morale of a firm’s workforce count enormously for the success customers, suppliers of input, workers along with trade unions,
or otherwise of a firm. If a country like Japan which devoid of market intermediaries, competitors and the public whose decisions
natural resources and was shattered by the Second World War and actions have a direct impact on the functioning of a company.
has risen like a phoenix from defeat and destruction, it is because While the first three components influence the production of goods
of the commitment, sense of responsibility and sincerity of its and services, the latter three affect the marketing and sales opera-
workers. If workers are imbued with value-based work culture tions of the firm, though the public also has a definite say in the
and practice it in their day-to-day work, it will enable the firm sales of goods and services.
 Chapter 3: Business and Its Environment | 39 |

The micro-environment Customers. Economists consider the consumer as the king who
It is the micro-environment that impacts a company’s business decides through the market forces the quality and quantity of goods
operations to somewhat greater extent than macro-environment. produced. The fact that the customer is at the heart of any successful
The players in micro-environment impact different companies dif- business model cannot be disputed. Mahatma Gandhi considered
ferently. The size, the capability and strategies of each company are them the sole purpose for which an enterprise existed and there-
different and in accordance with such differences, the players in fore, they should be treated with due respect. However, in reality,
micro-environment respond to the given situation. the consumer is given a raw deal—substandard products, increased
prices through market manipulation, failed warranties, poor after
Suppliers of input. It is expected that input suppliers should be
sales services, and a host of other unfair trade practices befalls his
more accommodating towards large companies, concentrating on
lot. If business is to flourish and earn long-term goodwill of the
the supply of raw materials, spares and components to them, even
people, the customer should be placed on a pedestal and should be
in times of general scarcity, rather than to the smaller ones. A bigger
given his due regard.
company can impose its conditions on suppliers to a much greater
The consumer in India, far from being alive to his rights (as
extent than smaller companies. Suppliers may not like to offend a
is the case in USA and Britain), is generally at the mercy of the
larger company—the mainstay of their business. It is said that the
manufacturer of goods, the wholesaler and the retailer, all of whom
influence of Standard Oil Trust, the predecessor of the American oil
exploit him. Most of the Indian consumers are unaware of the fact
giant, Exxon, on transporters and shippers was so great that it was
that they have some rights, established over the years through
able to exhort a commission not only on the transportation of its
the continued struggles of consumer organizations led by such
own oil but also of its competitors.
stalwarts as Ralph Nader of the US. The six rights of the consumer
Workers and trade unions. Labour as a factor of production is as enunciated under Section 6 of the Consumer Protection Act 1986
unique in being human. Labour is characterized inter alia by the (COPRA) are as follows:
following features: (i) The right to safety: The right to be protected against the mar-
(i) Labour, the commodity is indistinguishable from labour, the keting of goods and services which are hazardous to life and
person. property;
(ii) Labour is a perishable commodity that cannot be stored. (ii) The right to be informed: The consumer has the right to be
(iii) Labour that is lost today is lost forever. informed about the quality, quantity, potency, purity, standard
and price of goods or services, as the case may be, so as to
(iv) Labour has to be delivered in person. protect the consumer against unfair trade practices;
(v) Labour has a weak bargaining power, vis-à-vis the employer. (iii) The right to choose: The right to be assured, wherever pos-
Since labour as a human factor of production possesses a sible, access to a variety of goods and services at competitive
commodity that is perishable with a weak bargaining capacity, prices;
governments come to its rescue to protect its interest during wage- (iv) The right to be heard: The right to be assured that consumer’s
bargaining or during other conflicts when it may be at the receiving interests will receive due consideration at appropriate forums;
end. If they are not organized, workers cannot get their legitimate (v) The right to seek redressal: The right against unfair trade
dues from their employers. Therefore in every economic system, practices or restrictive trade practices or unscrupulous exploi-
be it capitalism or mixed economy, they have earned the rights tation of consumers; and
through a lot of struggle to form trade unions. Of course, under
socialism where the dictatorship of the Proletariat is said to have (vi) The right to consumer education: If a consumer wants to know
been established and where there is no opportunity of capitalistic on what basis the bus fare is fixed or whether a product contains
exploitations and the state is the only employer, the interests of the ingredients that are vegetarian or not and on what basis a builder
workers are zealously guarded. Trade unions fight for the rights of determines the area of the flat including the ratio between the
their members. A trade union represents the collective voice and super built up area and the carpet area, then this information can
strength of workers. If trade unions become disruptive, that could be had through the consumer protection councils.
cause a lot of industrial unrest causing loss of production, peace In recent times, there has been a shift to move beyond traditional
and harmony and even livelihoods. On the contrary, if they market segmentation to concentrate on individual customers needs,
understand and appreciate their roles vis-à-vis that of the capitalist- in a move from transaction based marketing to relationship market-
employer and get their grievances redressed and rights established ing. This, according to Pradeep A. Rao of Infosys, “would entail a
through peaceful negotiations, it will create a conducive atmosphere shift in focus from customer attraction to customer retention, from
for the industry. Sometimes, the right of workers to strike and mere pre-sale activity to extensive post-sale activity, from measur-
agitate is given such significant role in the industrial economy ing sales and profits to customer satisfaction, from offering not
that there is a great possibility of it being misused. In India, for price but value. Marketing communication would thus have to be
instance, prior to the adoption of the New Economic Policy in 1991, not just mass media based, but carefully tailored to individual cus-
government has been giving so much importance to the rights of tomer needs.”17
workers to strike and take to agitational measures—and there were Every management should ensure that its consumers have good
so many legislations in support of labour without stressing their experiences with a view to promoting their loyalty to the company.
responsibilities—that India lost millions of man-days in strikes People want only good experiences. That is the reason why the
and lock-outs. The country’s industrial scenario had deteriorated so Japanese give so much importance to consumer delight. “Success
much that the peace and prosperity of the nation was at stake. in the delivery of goods and services is largely determined by the
| 40 | Part I: Fundamental Concepts

extent to which they result in the consumer having the desired good productive efficiency. Competition also encourages the supply of
experience. While consumer mobilization is an ongoing task for a goods and services at lowest costs and prices.
manager, it is equally important to retain existing consumers for While the benefits of competition to consumers in the product
an enduring corporate success. Thus, managers are perennially in market can be directly linked to and may reflect good governance
pursuit of schemes that promote consumer loyalty.”18 practices, it may not be so direct in the case of capital market.
Often, competition may undermine the development of long-
Marketing intermediaries. Marketing intermediaries would gen-
term relations between companies and financial institutions. For
erally include agents, distributors, wholesalers and retailers. They
example, the willingness of banks to provide rescue finance to
constitute a very important link in a company’s micro-environment.
firms in financial distress, returns hinge on the expectation that
There are very few huge firms with a multi-product portfolio which
these investments will yield long-term benefits. Where there is
can afford to have their own branches and distribution networks to
competition in financial markets and firms are in financial distress,
do the job of supplying their products apart from promoting them to
the provision of rescue funding by banks may be discouraged. On
the consumers. Normally, the smaller firms rely on agents and dis-
the other hand, limitations on competition in financial markets may
tributing firms to do this service and also help them in popularizing
result in monopoly exploitation of borrowing firms. The desire
their products. It is very rare to find companies that have a network
to retain corporate control, i.e., for the ownership of companies
to market and distribute their products directly to the ultimate con-
drives performance. The threat of takeover acts as discipline on
sumers. In all cases, a firm that produces products and markets them
management. The inefficient use of assets and poor strategy or lack
through distribution channels owned by others should maintain the
of leadership are not rewarded in a competitive environment. Thus,
best of relations, both with the wholesalers and retailers. In recent
a firm that remains competitive will be able to get the required funds
times, companies that have enormous stake in maintaining good
through the capital market.
relations with their wholesalers and retailers have started wooing
them by giving them huge quantity discounts and freebies. There Public. One of the significant constituents of micro-environment
have been a few instances when big companies have organized all- of business is the public. It will be in the interest of any company
paid foreign tours to destinations such as Singapore, Hong Kong, to relate constructively to a large number of interested publics apart
Bangkok and even as far as the USA. from customers, suppliers and dealers. According to Philip Kotler,
“A public is any group that has an actual or potential interest in or
Competition. One of the hallmarks of a market-driven economy impact on a company’s ability to achieve its objectives.”19 To inter-
is the existence and encouragement given to competition. Competi- act meaningfully with different categories of public, most companies
tion, though it might cause obstruction to the success of an organi- today have a public relations department that follows and studies the
zation, still plays a very useful role in promoting the growth of the attitudes of their publics and issues information and communications
economy. Lack of competition in an economy accentuates owner- with a view to creating goodwill among them about their company.
ship concentration and promotes monopolistic practices. Besides, The head of the public relations department (PR) is carefully cho-
competition improves the conduct of managers as they understand sen as the entire department he/she heads and guides is strategically
that in such markets only the fittest can survive. This, in turn, positioned in an organization. A public relations officer (PRO), for
improves the quality of products and reduces prices for consum- instance, is compared to an ambassador whose job is to “lie abroad”,
ers and maintains or increases market share and return on share- i.e., to present his country’s image so positively that it may border on
holders’ investments. Consumers in economies having hitherto untruth to promote the interests of his/her country, so is the function
restricted competition as in India between 1951 and 1991 are reap- of a public relations executive who is supposed to adopt programmes
ing enormous benefits once the market is competition-driven. In a that would create a positive image of the organization he/she serves
much freer market today, they enjoy a wide variety of products and and would try to eliminate any practice that would show his/her
services to choose from—competitive prices, technically updated organization in poor light. Generally, the PR department interacts
products and other consumer friendly practices such as easy and with the public by performing the following functions:
instalment credit, longer warranties and the like.
Competition is positive sum game and not a zero sum game. (i) Carries out press relations wherein news and information relat-
Increased competition can increase shareholder and consumer ing to the organization are presented in the most favourable
welfare. Competition provides strong incentive for performance. light;
It aids in defending and expanding market share. It also helps in (ii) Communicates with internal and external stakeholders with
the provision of accurate information to measure performance, a view to promoting a proper understanding of the organiza-
i.e., it increases transparency in all operations. Competition to win tion;
market share drives greater efficiency and innovation. It passes on
(iii) Interacts with government officials and representatives of
lower prices to consumers and eliminates monopoly rents. All this
people either to promote (when it is favourable to the firm) or
ultimately benefits the consumer.
defeat (when it is unfavourable) certain legislations or regula-
Impact of competition on management is such that they are
tions that are likely to have an impact on the working of the
prompted to actively drive costs down. Unlike in a monopoly
organization;
market, in a competitive market structure, benchmark performance
measures are available. It encourages a customer driven market (iv) Gives inputs to management on various public issues and the
rather than product driven market. In such a market, the consumer is position the company would be advised to take to promote its
truly the king as it is he/she who determines the quantity and quality image and goodwill among the publics; and
of the product as reflected in the price mechanism. Competition (v) Carries out efforts to promote specific products of the organi-
in product markets is generally associated with allocative and zation.
 Chapter 3: Business and Its Environment | 41 |

In democratic societies, the role of publics for and against but the conglomeration of all the production based units and other
organizations on specific issues which impacts society cannot be related organizations—could register only the so-called Hindu rate
underestimated. There had been several issues which have been of growth, hovering around 3.5 per cent. But once the economy
spearheaded by interested publics to ensure that the government was liberalized under the New Economic Policy of 1991 and the
initiates actions for or against a particular act of the company that constraints placed on the activities of organizations were gradually
impacts the general population. For instance, on environmental withdrawn, the economy could register a commendable growth of
issues, Greenpeace and other non-government organizations around 9 per cent in certain years.
(NGOs) have been fighting together to discipline firms creating When we talk about the economic environment of the country,
environmental pollution and other natural damages. Many of we refer to the prevalent economic system, economic policies of
them have been fighting for almost two decades to get adequate the government and their objectives, the growth and organization
compensation from Dow Chemicals for the thousands of victims of the financial system, the macroeconomic scenario and the phase
of the Bhopal gas tragedy. There are other public-spirited NGOs of business activity through which the economy is passing through
which have been fighting for the protection of consumers’ rights. and so on.
Likewise, in several instances, the media has played a significant By an economic system, we mean the socio-economic and
role in making companies comply with the law of the land to protect political organization within which the country’s economic activities
investors, consumers and the environment. take place. Presently we have, in the world, the free-enterprise
Therefore, the publics play a very important role in ensuring a economic system, also referred to as capitalism, socialism and mixed
conducive micro-environment which facilitates business to operate economic system of varying kinds. These economic systems have
in a manner of helping the civil society without causing any damages various features which impose their structures on the functioning of
to people and promoting directly or indirectly their welfare. the economy. The particular economic system the country inherits is
not something that is imposed from above but the one that evolves
The Macro-environment over time as a result of socio-economic compulsions, historic
We have seen earlier that a firm operates not in a vacuum but in an considerations, the collective wisdom and genius of the people, their
environment consisting of several forces and factors that influences aspirations, their trade and commercial relations with other nations
business activity and to a large extent determines opportunities that and such other factors. The characteristics of an economic system
are available for it to promote its business. There are both economic keep evolving over time. They are not cast in stone. The institution
and non-economic factors which affect business operations in dif- of economic system like any other economic institutions reflects the
ferent ways. It cannot be said that the macro-environment as cur- conditions of the time during which it is evolved. We have seen in
rently available will always help the business grow, as there can be India in the follow up of the euphoria of our Independence and the
certain forces such as a virulent policy of control and regulation dogged pursual of Nehruvian socialism, the country had adopted
that may impede its growth. For instance, prior to liberalization of several stringent controls and laws to regulate India’s nascent
India’s economy in 1991, there were a number of economic fac- industry. Too much emphasis and investments were placed on the
tors including certain policy perspectives of the government that growth of the public sector with the private sector being given a
severely impinged the growth of Indian industry. These included step-motherly treatment. The government was more concerned with
the Monopolies Restrictive Trade Practices (MRTP) Act, the For- the equitable distribution of income and wealth and neglected the
eign Exchange Regulation Act (FERA), the Industrial Development imperatives of production. All these industry-unfriendly activities
and Regulation (IDRA) Act, legislations such as the Factory Acts, of the State did not help much the country’s economic growth. By
Labour Acts, etc. which conferred greater rights on workers without the time we realized our follies in adopting such stringent socialist
enforcing corresponding responsibilities or liabilities. These eco- policies, we had experienced severe pangs of poverty. Therefore, by
nomic legislations as well as the macroeconomic environment they 1991 we had started seriously liberalizing our industrial policy and
created were not conducive to the growth of industries. provided various incentives for industries to grow which has shown
The macro-environment of business consisting of both economic its positive results in a matter of 15 years. All these and more are
and non-economic environments is of great strategic importance. discussed in greater detail in the pages that follow. Likewise, we
It is this environment that is likely to determine to a great extent will also discuss the other economic factors that have an impact on
the success or otherwise of business. Even though the success the growth or otherwise of business.
of a business firm is invariably linked to its own internal micro- Just as the economic environment of business has an impact on
environment such as how it is structured, how it is provided with how business is run and performs, there are several non-economic
working capital and other resources, cooperation of labour, the factors that also have their impact on how the business is run, though
effectiveness of the techniques of production, the technology of to a lesser extent. There are far too many economic variables that
its machinery and so on, it also depends on macro-environment have an impact on business some of which may have very indirect
such as the policies of the government, the freedom of enterprise, and intangible influence on business. But the most important of
taxation and other policies of the State that would help business these non-economic factors would include the political system, the
grow. For instance, though several industries took root in India ideology of the party that rules the country, the legal framework,
between 1951 and 1991 through the entire period of planned the social system and the social and cultural values, demography,
economic development, many of these firms could have only the stage of technological development, and the natural and physical
stunted growth as the macroeconomic policies of the government environment the country has inherited. All these factors affect
were placing far too many restraints on them through the rigorous business one way or the other, sometimes positively, sometimes
policies pursued under Nehruvian socialism. During this period, negatively. In the following pages, we will analyse these factors and
the rate of growth registered by the economy—which is nothing their influences in greater detail and depth.
| 42 | Part I: Fundamental Concepts

THE ECONOMIC ENVIRONMENT The stage of economic growth the country goes through at any point of
A business enterprise is basically an economic unit which orga- time, the size of the domestic market it determines and its movements
nizes its activities within the market system with the objective affect business. Economic environment of business is thus a complex
of making profit. Its behaviour is mostly economic in nature in phenomenon that embodies the macroeconomic system, its structure,
as much as the entrepreneur or salaried managers who run it are the various sectors of the economy, policies, rules and regulations
guided by economic decisions based on proven economic theories administered by the government, central planning if there is one,
such as demand and supply and so on. Most business decisions availability of resources and their exploitation, the level and stage of
are determined in response to microeconomic and macroeconomic development, etc.
environment.
“A business firm and its environment are mutually interdependent, Economic Systems
interacting with one another continuously. Environment is the supra- The economic system that has been adopted in a country is basi-
system of which the firm is only a small sub-unit. It can survive and cally influenced by the philosophy, history, aspirations and atti-
thrive only when the environment desires its output of goods and tudes of its people and the system they want to put in place to
services and is prepared to approve of and endorse its activities.”20 translate these factors into realities and fulfil their chosen ideals
To explain it more clearly, a firm’s existence can be justified only by and goals. The nature of an economic system relies on the agen-
the firm’s outlook. When a consumer buys the firm’s product, they cies which are permitted to own and put to use the productive
receive its output and, in return, pay money for it which becomes resources, extent of individual’s initiative permitted in the eco-
one of its inputs. If only few people buy the firm’s output, the firm nomic activity, types of incentives offered to employees and the
will not receive its much needed input, i.e., money. With no money, process of price determination. If we analyse the features of the
the firm would not be able to obtain other inputs such as land, raw present economic systems prevalent in the world, namely, free-
materials, labour, equipment and building. A firm cannot produce enterprise economic system, socialism and mixed economy, we
any output without these inputs. will be able to observe differences in the manner in which these
The business environment, to a very large extent, is influenced factors are being used. In all economies, irrespective of their
by the economic environment consisting of the economic political and social affiliations, resources are scarce. Individual
system, macroeconomic scenario, financial system, economic firms and the state have to make rational choices to put them to
policies, economic legislations, economic planning, the degree of best uses. Resources have to be rationally—and within the con-
competition, nature of demand for goods and services, lifestyles, text of the philosophy adopted by them—allocated and lead to
consumer attitudes and behaviour, market segments and so on. The subsequent production. All economies, be they capitalist, socialist
economic environment itself may be influenced by the nature of or mixed, face the same economic problems such as what to pro-
economic system that encompasses the nature of property rights, duce, how to produce, for whom to produce, when to produce, the
ownership of means of production, production relations, role of quality and quantity of goods to produce and how to make them
planning, functioning of the market and price mechanism, and the available to ultimate consumers.
like. An economic system of a country may be characterized by Economic systems all over the world while being implemented
certain economic and non-economic features such as the political have not retained their theoretical purity. They have undergone vast
ideology which may lead to the country adopting either capitalism, changes, so much so that none of the economic systems prevalent
socialism or a mixed economy format. The structural anatomy of today can be said to be as pure as it was adumbrated or envisaged by
the economic system would consist of such economic parameters its promoters. (i) In most economies, both free market pricing and
as the structure of national output, the occupational distribution of centralized planning coexist in different degrees. Even in the most
labour force employed, the capital formation, the trade composition ardent free market societies, government tries to regulate prices
and so on. These economic factors reflect the structural equilibrium of products which are in short supply so as to help alleviate the
(balance) or disequilibrium (imbalance) between different sectors sufferings of the poor and impoverished sections of the society. In
such as agriculture, industry, trade and services. socialist societies, of course, prices are determined by the planning
A country’s economy functions through the interaction of different authority so as to ensure that resources are allocated to the prioritized
sectors. The business sector transacts its business with all other sectors of the economy by not allowing consumer sovereignty,
sectors of the economy. These interactive transactions constitute the and resources are not squandered away. In mixed economies like
economic environment of business. The government of the country India’s, there is both free market pricing and administered prices
also plays its role by influencing the business’ economic environment for essential commodities as dictated by the State; (ii) Almost
through its own activities and policies such as economic planning, in all economies, be they capitalist, socialist or mixed, positive
annual budgets and fiscal policies, industrial regulations, business government intervention is on the rise. Economic planning, too,
laws, controls on prices and wages and policies affecting the external is a government intervention. Though for a very long time the
sector such as the Exim Policy. Added to these functions and policies role of the State in regulating private enterprise was looked down
of the government, there are monetary and non-monetary policies of with suspicion, certain developments in recent times have made
the federal government that have an impact on the functioning of the government intervention in economic matters absolutely essential
economy leading to business cycles that are interspersed with periods and is being desired by the very same private sector industry which
of prosperity and recession. The sum total of all these acts and policies normally does not favour the State playing a big brother’s role.
of the government and the manner of their implementation normally Even in USA, the citadel of capitalism, the role of government has
determine the tempo of economic growth. Business or trade cycles been sought by society in matters such as in ensuring corporate
and economic growth significantly affect the economic environment. governance in the aftermath of a series of corporate failures in the
Technological Environment

The technological environment consists of those factors related to knowledge applied and the
material and machines used in the production of goods and services that have an impact on the
business of an organisation Some of the important factors and influences operating in the
technological environment are as follows

1. Sources of technology like company sources, external sources, and foreign sources; cost of
technology acquisition; collaboration in, and transfer of, technology,

2. Technological development, stages of development, change and rate of change of

technology, and research and development.

3. Impact of technology on human beings, the man-machine system, and the environmental
effects of technology.

4. Communication and infrastructural technology in management

Strategists can ill afford to ignore the technological environment, as technology, besides
customer groups and customer functions, defines the business of their organisations.

The strategic implication of technological change, according to Boris Petrov, are three: it can
change relative competitive cost position within a business; it can create new markets and new
business segments, and it can collapse or merge previously independent businesses by reducing
or eliminating their segment cost barriers."

In the Indian context, we find that the state of technological development varies among
different sectors of the industry. Generally, it is felt that the technology used depends on a
number of factors such as cost and availability of technology, nature of competition, relevance
to customer needs, and government policy. At the macro-level, foreign technical collaborations
are popular in India but subjected to strict regulation regarding indigenisation, impact on local
technological development and employment, export commitments, etc. Technology is often
used as a strategic weapon by companies operating in a highly competitive environment A few
specific examples of the factors operating in the technological environment and their impact
on business are provided here.

An interesting mega trend in the technological environment is that of knowledge-based

industries. The emphasis in these industries is not on physical or tangible assets but on
intangible assets such as knowledge. Thus, the value of intellectual capital determines the rank
and competitiveness of an industry or company. Intellectual capital is based on factors such as
research and development capabilities, patents, proprietary technologies, databases, brands,
and relationships with customers and business partners. At present, there is an inadequate
appreciation of this technological trend in India and the corporate sector needs to internalise
this fact by reorienting their focus from merely products and markets to the technologies that
work behind them.

It has become a cliché to say that the Internet has revolutionised the way business is done. Little
is the realisation that the technology behind the Internet has virtually taken the enterprise
information system within the reach of the customer. The enterprise information system can be
linked to the customer through the call centres, Internet, and mobile devices. This is the
customer relationship management system or CRM. Customisation and greater interactivity is
possible through the CRM systems making process technology undergo profound changes.
There are several service industries that are deeply affected by CRM. Among these are financial
services including banking and insurance, travel, transportation, and utilities. Manufacturing
industries too benefit by using it for retailing as well as providing after-sale support. The CRM
products and services itself is a sunrise industry. Traditionally, technology transfer in the Indian
context meant transfer of know-how through payment of royalty and fee or technology imports
through import of plant and machinery and turnkey projects. Increasingly, technology transfer
is now associated with foreign direct investment. This is an indication of greater confidence of
international technology suppliers in the technological capacity in India as well as their self-
enlightened interest in being partners in the fruits of technological developments in India. Many
Indian companies have been beneficiaries of this new emphasis on technology transfer,
especially in information technology industry. This also partly accounts for the number of
foreign companies building their R&D bases in India or Indian companies acquiring R&D
facilities abroad.

Technological environment, by its very nature, is perpetually in a state of ferment and interest
is evidenced in the trends by all concerned. It is frequent to read about yearly or ten-year
technological trends.
 Chapter 3: Business and Its Environment | 45 |

conducted between countries. The whole world has become “the from high qualification, specialized vocational and technical
global village”. training of its manpower also influence the efficiency of the
firm or enterprise.
THE NON-ECONOMIC ENVIRONMENT (iii) University and college training is generally useful to firms.
If the business community should be aware of the forces that con- Many kinds of highly skilled or specialized jobs cannot be per-
stitute the economic environment of business, being conscious of formed with, if at all, by persons without appropriate training.
the forces of non-economic environment of business is also equally (iv) Since many managers do not go to business schools, top notch
important for them to take successful business decisions. For this, firms send their executives to special management develop-
it is necessary to identify the factors that constitute non-economic ment programmes.
environment as they influence the economic environment and in (v) Even if educational opportunities are offered, nothing much
turn are influenced by it. will happen unless people have the motivation to be educated.
The Socio-cultural Environment (vi) Education is not generalized and people often need to obtain
specific skill sets before they can perform efficiently. Some
Social environment describes the people, their attitudes, social
skills and people are transferable while others are not. So we
behaviour and impact of education, knowledge explosion and pub-
find problems in educational match, i.e., matching education
lic opinion whereas cultural environment deals with values, norms
to job needs. Many students want practical specific training
and accepted behavioural patterns. A business must adjust its meth-
because they sense clearly that this will lead them to good jobs.
ods of operations with changing socio-cultural values. A person’s
Their education will match the company needs. Research stud-
interaction with the society he/she lives in shapes, refines and even
ies have shown that the investment a company makes in devel-
alters his/her beliefs, values and norms which in turn define his/her
oping its human resources brings in multiple benefits to it.
tastes and preferences and even prompts him/her to absorb a world
view of things. This process defines his/her relationship to his/her
own self and others in the society, institutions, nature of the society The Politico-legal Environment
and to the universe itself. In a social group, cultures and subcultures The politico-legal environment provides the legal framework within
intermingle and sometimes tend to lose their uniqueness and indi- which business can function with ease and felicity. For instance, the
viduality. In India, for instance, there are six major religions, more system and laws of contract are absolutely essential for the orderly
than 1600 languages, all of which have some impact or the other conduct of business and it is the political and legal institutions that
on people living in the respective regions. Regional differences in can ensure this. Political environment describes the political sys-
religion, language, customs, habits, values and social and caste sys- tem prevailing in the country and also deals with the regulations
tems are a legion and make India’s socio-cultural environment both and legislations pertaining to business operations, government
unique and complex. The social-cultural environment shapes the programmes, war, election, and similar other problems. Though
attitudes of human beings, though there may be great diversity in business is an economic activity, there are several non-economic
its impact. variables such as political and legal environment which influence
The human problem in society is how people behave and what its sphere of activity. By political legal environment is meant the
attitudes they have towards the role of their fellowmen and their situation and circumstances relating to the government, politics
society. Even the most brilliant and well educated man might turn to and public affairs of a country. They also relate to the laws, the
be an unproductive employee if he does not bring his brilliance and government agencies that implement them and pressure groups that
education to the work he does, but instead dislikes his boss, thinks influence and limit various organizations and individuals. In recent
his company is exploiting him, and he has a dim future. There may times, there is a tremendous increase in the number of business leg-
be others who may not be so well-endowed, but may be discharging islations and growth of special interest groups, especially with ref-
their duties better because of their genial attitude towards their erence to environmental activities. For raising revenue and for other
fellow human beings. So, in this context, it must be stressed that reasons, governments impose various types of taxes on business
what is needed is right social attitude. firms, households and individuals. In almost all countries, busi-
ness enterprises are directly or indirectly required to pay heavier
The Educational Environment taxes not only to defray the expenses of the government, but also to
Educational environment in a country influences every aspect carry out social welfare programmes for the benefit of the poor and
of managerial and industrial life. There are six basic educational underprivileged sections of the society.
inputs which are of interest to the firms and to the country. They There are as many legal systems as there are countries, and in
are as follows: many cases, states, cities or provinces also have their own laws. The
(i) Illiteracy is closely correlated to poverty. It is extremely dif- politico-legal constraints deal more with the activities and decisions
ficult to get and hold on to a job without, at least, the ability to of the firms. Laws may prevent firms from doing something or
read and write. Illiterates cannot read, fill in application forms require them to do something else. Thus, a labour law may prohibit
or read simple job instructions. the company from using teenage workers in certain jobs and staffing
may be somewhat different from what it might otherwise be. Some
(ii) Many studies have shown that there is a close relationship
of the relevant ones are as follows:
between education and income. Graduates earn more than,
say, a school or college dropout. A management graduate and (i) Most governments have very complex laws relating to busi-
a software engineer earn more than ordinary graduates. Apart ness that have accumulated over time. Some laws are more
| 46 | Part I: Fundamental Concepts

important than others in business. Although criminal law may The Demographic Environment
be important on occasion as when one worker assaults another, The population of a country with its characteristics such as the size,
normally, it does not directly affect firms. But tax laws are growth rate, age and sex composition, life expectancy, work partici-
important and have very direct impacts on firms. They may pation rate, employment status, rural–urban divide, levels of educa-
even force them to go out of business, change their basic oper- tion, caste, ethnicity, language and religion has a huge impact on its
ating strategies, or move to another state. business. This is because people are both consumers and producers,
(ii) Most countries have some national defence posture, ranging two of the most important constituents in a business environment.
from massive military establishments to the small ceremonial Demand for goods comes from people, and larger is the
guard forming the major defence force. Adam Smith famously population larger will be the demand. Since India’s population is
argued that “Defence is better than opulence”. Developed high, exceeding 1.12 billion people, we have a huge captive market
countries can afford to spend much more on defence than poor for all the primary products and consumer goods. We have a large
countries. But even poor and developing countries also spend number of people in the middle income group ranging between
comparatively a large portion of their incomes and resources 280 and 300 millions, a fact which offers an attractive market for
on this sector resulting in a great drain on critically scarce consumer durables. This has made dozens of MNCs in this sector
manpower, materials and capital. For instance, countries in the come to India to cash in the lucrative market. Approximately, 25
Indian subcontinent earmark a sizeable portion of their bud- million children are born in this country every year22 providing a
geted expenditure on defence preparedness because of con- large market for baby foods and childcare products. The age and sex
tinued political hostility. In some cases, the fortunes of many composition have their own corresponding impacts on goods and
companies are tied to the country’s defence policy. services. Moreover, a large market created by an ever increasing
(iii) Foreign policy has a critical impact on industrial management population offers an incentive to the use of division of labour,
and international business in developing countries. A develop- mechanization and large scale production. On the other hand, large
ing country may strongly need foreign investment, know-how, labour force limits the use of technology. MNCs come here and
technology and imports but it may have serious reservations outsourcing is done here because of the availability of cheap labour.
and suspicions about foreign influence and control. India housed an estimated 345 million people at the time
of Independence. This almost tripled to 1029 million by 2001
(iv) A high degree of political stability over a period of time does
according to the population census of 2001. It is estimated that, by
not assure a high degree of managerial effectiveness or indus-
1 July, 2007, India’s population would have swollen to 1134 million
trial progress. However, political instability can significantly
or an increase of approximately 789 million.” Population growth in
undermine managerial performance and economic develop-
India has been too rapid, with important implications for social and
ment. Business managers must examine political events and,
economic development and quality of life.”23
if possible, try to know what is really happening behind the
Estimates of future population growth in India are indeed
political scene.
frightening. India’s population is expected to increase between
(v) Political organization refers to the structure of and pattern of 325 million and 485 million in the first quarter of the present
political administration of a country. Usually, an industrial century. “This shows that a substantial growth in the population
firm must deal with the variety of central ministries as indus- of the country in the near future is almost inevitable. As a result,
tries, commerce, finance and planning. India is slated to become the most populous country of the world
somewhere during 2035–40.”24

ASUMMARY
 A business firm does not operate in a vacuum, but in a given envi- that its management structure should be conducive to carry out its
ronment. Business is closely related to industry, commerce and activities in a smooth and efficient manner. For the success of an
trade. Modern business has undergone tremendous changes over organization and the realization of its goals, the relationship that
the past two hundred years and has transformed itself to include exists between the internal stakeholders is of utmost importance.
characteristics such as large size, global reach, oligopolistic struc- The physical assets of the organization are very important for its
ture, technology-based, diversified, subject to government control success and competitiveness. The quality of physical assets that
and ethical consciousness. include a firm’s plant and machinery in the case of a manufactur-
 Environment means something external to an individual or an ing company, production technology, R&D work and distribution,
organization. In the context of business, its environment may refer logistics and so on would help a firm achieve its efficiency and
to all the external factors which have a direct or indirect impact competitive strength vis-à-vis its peers. The most important of all
and bearing on the activities of business, and could be split into the factors constituting internal environment is the human assets
internal and external environment that in turn consists of micro- the organization has acquired over time. The attitudes, skill sets
and macro-environment. Apart from these, business is also influ- and expertise, commitment and morale of a firm’s workforce count
enced by both economic and non-economic environment. enormously for the success or otherwise of a firm. A business is
also driven by its goals and objectives. Business is organized to
 By internal environment, we refer to the framework, the situa- ensure profit for its promoters and shareholders. Finally, it is the
tion and the factors that exist within the business organization and value system that prevails in the organization that will decide its
how these have an impact on its working. It is important for a success in the long term. These values emanate from the top man-
firm to realize its objective of making sumptuous profit and for agement and percolate down to the basic workforce.
 Chapter 3: Business and Its Environment | 47 |

 The external environment of business can be divided into micro- be accelerated if it is well endowed with vast reservoir of natural
and macro-environment. Micro-environment consists of the gen- resources. The size of the market is equally important. Overhead
eral public, customers, suppliers of input, workers along with capital services that are very important include transportation sys-
trade unions, market intermediaries, competitors and the public tems and related facilities, public warehousing and storage, gas
whose decisions and actions have a direct impact on the function- transmission and electric power, water resources, communication
ing of a company. Micro-environment impacts a company’s busi- networks including telephone, telegraphy, postal services and the
ness operations more than macro-environment. The hallmark of a mass media, and more importantly, the internet facilities, hous-
market-driven economy is the existence and encouragement given ing, sewage, sanitation, hospitals, medical services and so on. The
to competition. Competition plays a very useful role in promoting better such services are the easier it is to do business efficiently.
the growth of the economy. A country’s national income, the manner it is distributed between
 Macro-environment of business consisting of both economic and different sections of the society and the purchasing power of its
non-economic environment is of great strategic importance. “A people are also of utmost importance to the business community.
business firm and its environment are mutually interdependent,  If the business community should be aware of the forces that con-
interacting with one another continuously. Environment is the stitute the economic environment of business, being conscious of
supra-system of which the firm is only a small sub-unit. It can the forces of non-economic environment of business is equally
survive and thrive only when the environment desires its output important for them to take successful business decisions. For this,
of goods and services and is prepared to approve of and endorse it is necessary to identify the factors that constitute non-economic
its activities.” environment as they influence the economic environment and in
 By an economic system, we mean the socio-economic and politi- turn are influenced by it. Social environment describes the people,
cal organization within which the country’s economic activities their attitudes, social behaviour and impact of education, knowl-
take place. The economic system that has been adopted in a coun- edge explosion and public opinion whereas cultural environment
try is basically influenced by the philosophy, history, aspirations deals with values, norms and accepted behavioural patterns.
and attitudes of its people and the system they want to put in place  Educational environment in a country influences every aspect
to translate these factors into realities and fulfil their chosen ideals of managerial and industrial life. There are six basic educational
and goals. The structural equilibrium of an economy is another inputs which are of interest to the firms and to the country. Politi-
significant constituent in the economic environment of business. cal environment describes the political system prevailing in the
 Business firms face the problems of credit requirements. To country and also deals with the regulations and legislations per-
achieve efficiency, they must have adequate working capital. taining to business operations, government programmes, war,
Fiscal policy deals with the receipts and expenditures of the gov- election and similar problems. There are as many legal systems as
ernment to achieve certain socio-economic objectives. Economic there are countries, and in many cases states, cities, or provinces
stability and price stability are two of the most important param- also have their own laws.
eters that reflect the long-term equilibrium of an economy. The  The politico-legal constraints deal more with the activities and
growth and maintenance of a well-developed money market is a decisions of the firms. The population of a country with its char-
sine qua non for orderly functioning of industrial and commercial acteristics such as the size, growth rate, age and sex composition,
organizations. In countries where the capital market is well orga- life expectancy, work participation rate, employment status, rural–
nized, firms find no problem in mobilizing the finance they require. urban divide, levels of education, caste, ethnicity, language and
It is conventional wisdom that a country’s economic growth can religion has a huge impact on its business.

A
 NOTES
1. Cited by D. P. Jain, Business Organization and Management, 9. Ibid.
Delhi: Vrinda Publications (P) Ltd, 1999. 10. Ibid.
2. Y. K. Bhushan, Fundamentals of Business Organization and 11. Chidanand Rajghatta, “US Preparing USD700 Billion Bail Out”,
Management, Delhi: Sultan Chand and Sons, 1980. Times of India, 21 September, 2008.
3. Sarah Anderson, and John Cavanagh, “Top 200: The Rise of 12. A. C. Fernando, Corporate Governance, New Delhi: Pearson Edu-
Global Corporate Power”, Corporate Watch 2000. Global Policy cation, 2006.
Forum – Social and Economic Policy, www.globalpolicy.org/
13. Raj, Rituparna, A Study in Business Ethics, Bombay: Himalaya
socecon/tncs/top200.htm
Publishing House, 1999.
4. International Business and Multinational Corporations, available
14. Lord Holme and Richard Watts, “Making Good Business Sense”,
online: http://www.cis.drexel.edu/faculty/shelfer/public_html/
cited by A.C. Fernando, “C.S.R. for Sustainable Development”
busrefpapers/intmulti.html
Erudition, The Albertian Journal of Management, January 2007,
5. Atul Thakur, “Sheer Size of Global Giants is Cause of Tremor”, pages 67–71. Albertian Institute of Management, Cochin.
Times of India, Times Insight Group, 20 September, 2008. 15. Longman Dictionary of Contemporary English, Essex, England:
6. A. C. Fernando, Corporate Governance, New Delhi: Pearson Pearson Education Ltd, 2004.
Education, 2009. 16. A. C. Fernando, Corporate Governance, New Delhi: Pearson
7. Ibid. Education, 2006.
8. A. C. Fernando, Business Ethics: An Indian Perspective, New Delhi: 17. Sridhar Chari, “Customers Come Last”, The Hindu Business Line,
Pearson Education, 2008. 15 September, 2008.