Tag: Environment

  • Renewable Energy: Benefits for the Environment and Sustainability

    Renewable Energy: Benefits for the Environment and Sustainability

    Learn about renewable energy and its benefits for the environment and sustainability. Understand the differences between renewable and non-renewable energy sources, their availability, and environmental impact. Discover the economic opportunities and energy security that renewable energy offers. Explore the future of renewable energy and its potential to mitigate climate change. Invest in infrastructure, policy frameworks, and education to support the widespread adoption of renewable energy for a sustainable and resilient energy future.

    Renewable Energy: A Sustainable Solution for the Future

    It is a term that refers to energy sources that are naturally replenished or regenerated over a short period. These sources are considered sustainable because they can continuously provide energy without depleting finite resources or causing significant harm to the environment. Unlike non-renewable sources, which are finite and can be depleted, it offers a more sustainable and environmentally friendly alternative.

    Renewable Energy: Definition and Importance

    It refers to the power derived from natural sources that are continuously replenished. These sources, such as sunlight, wind, rain, tides, and geothermal heat, are abundant and inherently sustainable, as they naturally regenerate over brief periods. Unlike fossil fuels, which take millions of years to form and are at risk of depletion, they can provide endless power without the risk of running out.

    Key Characteristics of Renewable Energy Include:

    Sustainability:

    Its sources do not deplete over time, making them a permanent fixture of our natural environment that can relied upon indefinitely.

    Low Environmental Impact:

    These sources generate energy in ways that produce significantly fewer greenhouse gas emissions than conventional fossil fuels, helping to reduce air pollution and combat climate change.

    Availability:

    From the vast windswept plains to sunny skies and flowing waterways, the forces that drive renewable energy found across the globe, making it accessible to most regions.

    It offers a promising, viable alternative to fossil fuels, providing a pathway to energy independence, economic growth, and environmental sustainability, crucial to the health and prosperity of future generations.

    Non-renewable energy refers to energy sources that cannot replenished within a human lifetime. These sources are finite and derived from materials that take millions of years to form, such as coal, oil, and natural gas. Once these resources consume, they are gone forever, making them unsustainable in the long term. Non-renewable energy sources know for their significant environmental impact, including the production of greenhouse gases and other pollutants that contribute to global warming and air pollution.

    Differences Between Renewable and Non-Renewable Sources

    The main difference between renewable and non-renewable energy sources lies in their availability and impact on the environment.

    Availability:

    Its sources, such as solar, wind, hydroelectric, and geothermal power, are abundant and widely available. They rely on natural processes that occur continuously, making them a reliable and sustainable source of energy for the future. In contrast, non-renewable sources, such as fossil fuels (coal, oil, and natural gas), are formed over millions of years and exist in limited quantities. Once these resources are depleted, they cannot be replenished within a human lifetime.

    Environmental Impact:

    Its sources have a significantly lower environmental impact compared to non-renewable sources. The production and use of non-renewable energy often result in harmful emissions, such as carbon dioxide and other greenhouse gases, contributing to climate change and air pollution. On the other hand, its sources produce little to no greenhouse gas emissions during operation, making them cleaner and more sustainable for the environment.

    The Benefits of Renewable Energy

    It offers numerous benefits, making it an attractive alternative to non-renewable sources. These benefits include:

    1. Environmental Sustainability:

    Its sources have a minimal impact on the environment. They produce little to no greenhouse gas emissions, reduce air pollution, and help combat climate change. By transitioning to renewable energy, we can reduce our reliance on fossil fuels and work towards a more sustainable future.

    2. Energy Security:

    Unlike non-renewable sources, often imported and subject to price volatility, its sources can be harnessed locally, reducing dependence on foreign energy sources. This enhances energy security and reduces the risk of supply disruptions.

    3. Economic Opportunities:

    It sector offers significant economic opportunities. Investing in renewable energy technologies can create jobs, stimulate economic growth, and attract investment. As the demand for renewable energy increases, so does the need for skilled workers in various sectors, such as manufacturing, installation, and maintenance.

    4. Energy Independence:

    By harnessing renewable energy sources, countries can reduce their dependence on imported fossil fuels. This enhances energy independence and reduces vulnerability to geopolitical tensions and price fluctuations in the global energy market.

    5. Diversification of Energy Sources:

    Transitioning to renewable energy allows for a more diverse energy mix. By incorporating various renewable sources, such as solar, wind, hydroelectric, and geothermal power, countries can reduce the risks associated with relying heavily on a single energy source. This diversification increases energy resilience and stability.

    The Future of Renewable Energy

    The future of renewable energy looks promising. As technology advances and economies of scale improve, its sources are becoming increasingly cost-effective and efficient. Governments, businesses, and individuals around the world are recognizing the importance of transitioning to renewable energy to mitigate climate change and promote sustainable development.

    Investments in renewable energy research and development are driving innovation and driving down costs. This has led to significant growth in renewable energy capacity globally. According to the International Renewable Energy Agency (IRENA), the share of renewable energy in global power generation expected to increase from 26% in 2018 to 45% by 2050.

    As we continue to embrace renewable energy, it is crucial to invest in infrastructure, policy frameworks, and education to support its widespread adoption. By prioritizing renewable energy, we can create a more sustainable and resilient energy future for generations to come.

    Advantages and Disadvantages of Renewable Energy

    Its technologies provide a sustainable way to generate power while offering numerous environmental, economic, and social benefits. Like any source of power, however, they also come with their own set of challenges. Below, we explore both the advantages and disadvantages of renewable energy sources.

    Advantages

    1. Environmental Impact: Renewable sources such as wind, solar, and hydro produce significantly fewer pollutants including greenhouse gases. This helps in combating climate change and reducing air and water pollution.
    2. Renewable Nature: Unlike fossil fuels, sources are not finite and are replenished naturally. This sustainable aspect affords a limitless nature that prevents the depletion of natural resources.
    3. Energy Security: By investing in local energy generation from renewable sources, countries can reduce their dependence on imported fuels, improving their energy security and stability.
    4. Economic Development: The renewable energy sector is labor-intensive, which creates jobs in installation, maintenance, and more. This not only boosts the local economy but also contributes to a decrease in unemployment rates.
    5. Cost-Effectiveness: While the initial setup costs can be high, operational costs are often lower than those of traditional energy forms. Additionally, as technology advances, the cost of renewable technologies continues to drop, making them more accessible.

    Disadvantages

    1. Intermittency: Some energy sources, like solar and wind, depend on the weather, which can be unpredictable. This makes energy supply less consistent and reliable unless supplemented with storage solutions or other forms of energy.
    2. High Initial Costs: The upfront costs for setting up renewable energy installations can be significantly higher than conventional power plants. This includes the cost of solar panels, wind turbines, and infrastructure for capturing and storing the energy.
    3. Land Use: Certain types of renewable energy sources, notably wind farms and hydroelectric plants can require a large amount of space. This could lead to land use conflicts and environmental degradation if not managed correctly.
    4. Storage Costs: Storing energy for use when renewables aren’t producing energy — during nighttime for solar or calm days for wind farms — requires energy storage systems, which can be expensive and technologically challenging.
    5. Technology Development: While advancements are being made, some renewable technologies are not able to fully compete with the energy output and efficiency of fossil fuels. Further research and development needed to overcome these barriers.

    Moving Forward with Renewables

    While there are challenges associated with renewable energy, the long-term benefits they offer in terms of sustainability, security, and economic growth make them essential to the future of global energy. Nations around the world are actively working to address these disadvantages through technological innovation, policy framework adjustments, and supportive economic measures to encourage the adoption of renewable resources. These efforts are crucial in paving the way towards a more sustainable and resilient energy future.

    Renewable Energy Examples

    It encompasses a variety of sources that harness natural processes to generate energy. Here are some key examples of renewable energy sources:

    1. Solar Power

    Solar energy captured through solar panels and photovoltaic cells that convert sunlight directly into electricity. It’s widely used in residential, commercial, and industrial settings.

    2. Wind Power

    Wind turbines use wind energy to generate electricity. Also, Wind farms can found both onshore and offshore and are particularly effective in areas with high wind speeds.

    3. Hydroelectric Energy

    This type of energy generated by the movement of water. Typically, hydroelectric power comes from water stored in dams that, when released, spin turbines to produce electricity.

    4. Geothermal Energy

    Geothermal power utilizes the heat from the Earth’s core to generate electricity. It involves tapping into hot water and steam reservoirs beneath the Earth’s surface to power turbines.

    5. Biomass

    Biomass energy involves using organic materials like plant and animal waste. These materials burned or biochemically converted to produce heat or electricity.

    6. Tidal Power

    Tidal energy harnesses the energy from tidal flows to turn turbines or generate electricity. Although less common, it is a promising energy source due to the predictable nature of tides.

    7. Wave Energy

    Wave power converts the energy from surface waves on oceans or lakes into electricity, using various technologies that capture the movement of the water.

    These renewable energy sources play a crucial role in reducing dependence on fossil fuels, promoting environmental sustainability, and enhancing energy security.

  • Big Data Environment Impact and Development

    Big Data Environment Impact and Development

    Big Data Environment with the development of society, the progress of the economy, and the improvement of science and technology. The coverage of the nation’s information technology is getting wider and wider, and the application is becoming more and more mature. Huge changes have taken place. Through the big data analysis of the consumption situation and development status of various industries. It can accurately position the development and market expansion of the enterprise, and achieve scientific division of customer groups. To effectively improve the economic efficiency and market competitiveness of the enterprise. Big data The role in marketing is also highlighted.

    Here are the articles to explain, Big Data Environment: Important Impact, Reform, and Development

    The article first discusses the important impact of the big data environment on marketing. Then analyzes the existing problems in marketing in the big data environment, and finally makes a brief discussion on the new direction of the reform and development of marketing methods in the big data environment.

    Main Keywords; big data environment; impact and development; marketing method; consumption

    During the rapid development of Internet technology, data information has become an important feature of the information age, and more and more massive data contained in information networks can be mined and practically applied. Which also gave birth to the emergence and rapid promotion of big data technology. From the perspective of enterprise operation, marketing needs to pay attention to and make full use of big data technology. Quickly and accurately understand and grasp the actual market demand and dynamic changes of users. Optimize and adjust product positioning and overall market layout promptly.

    In this way, the marketing cost of the enterprise can be reduced, the rational allocation of enterprise resources can be promoted, and the economic benefit of the enterprise can be maximized. At present, in the context of the rapid development of Internet technology, cloud computing technology. Big data technology has become a prominent feature in the context of informatization. The application and dependence of all business operations on information technology have gradually increased.

    Opportunities and new challenges

    Given the new opportunities and new challenges brought about by big data technology of informationization, enterprises must constantly adjust their marketing strategies, be good at giving full play to the advantages and actual value of big data technology, and carry out comprehensive and in-depth development of the useful information contained in big data. In-depth mining of value information, and continuous improvement of corporate marketing strategies, to provide more powerful basic support for corporate market development. Under big data technology, all kinds of information resources have begun to show geometric growth.

    Based on scientific analysis of marketing strategies, enterprises should use the role and value of big data technology. To obtain accurate market demand positioning and grasp the changing trend of user consumption concepts. And use this as a basis to change the marketing concept, and adopt more effective marketing methods. Continuously reform and innovate marketing methods. To promote the sustainable growth of the comprehensive benefits of the enterprise. Provide solid backing for the healthy and sustainable development of the enterprise.

    The important impact of marketing in the big data environment

    From the perspective of enterprise marketing. As information technology and big data technology are widely used, the dependence on them is also increasing. Through the analysis of big data technology. It can reduce the time cost and labor cost of the enterprise on market research, and at the same time. It can also improve the accuracy of the enterprise’s grasp of the dynamic changes in the market. And quickly lock and reflect market demand information. To find high-value and high-quality customers, position products, promote consumer desires, improve the economic benefits of enterprises, and provide true, accurate, and comprehensive data support.

    Therefore, under the big data environment, the impact of marketing can summarize in the following three aspects.

    First of all

    Relying on big data technical analysis to accurately grasp the needs of customers and consumer groups. In the era of big data, the information platform channel has become a powerful way for enterprises to grasp the dynamic changes in the market, and it is also a key resource for enterprises to understand the actual needs and consumption desires of consumers. Enterprises can lock customers through big data analysis and grasp customer consumption. need. And marketing is to connect customers’ consumption desires according to customer needs. Amplify customer consumption needs, and formulate corresponding marketing strategies around customers.

    Relying on massive data information, using big data technology analysis and mining technology, accurately locating market users, firmly grasping market demand, and conducting market research based on customers’ individual needs, characteristics and hobbies, etc. Expand. For example, according to customers’ search keywords in the network platform, customers’ consumption habits, personalities, and hobbies can lock, and marketing plans can formulate accurately. Marketing strategies can also carry out through the frequency and cycle of customer consumption behaviors and product hotspots. Precise optimization, recommending and launching more targeted products for customers to meet the needs of consumers.

    Secondly

    Predict the consumption direction of customers based on big data technology analysis. In traditional marketing, it is often difficult for companies to truly collect more comprehensive customer information. They can only analyze customer consumption directions and consumption. Through the analysis of customer basic information data, such as contact information, age, gender, occupation, etc. Analysis and prediction of concerns. However, this fragmented information can not improve the enterprise’s accurate judgment of customer needs.

    Finally

    Relying on the analysis of big data technology to promote the scientific formulation and also achievement of corporate marketing strategic goals. The main goal of marketing activities is to maximize corporate profits. Which requires continuous expansion of customer consumer groups and effective improvement of product pertinence. While looking for demand points from customer information resources, especially analysis goals for customer consumption

    New directions for the reform and development of marketing methods under the big data environment

    Build a big data platform and pay attention to information security

    In the era of big data, the amount of market information data is growing explosively. And its speed of change is fast. Therefore, in the process of reforming, developing, and innovating marketing methods. Enterprises must establish the status of big data marketing and actively tap the technical functions of big data. Big data technology integrated into the reform of marketing methods to change the concept of corporate marketing. In the transformation of enterprise marketing, it is necessary to make full use of technological advantages. Such as big data analysis and big data mining to provide corresponding support for enterprises to make marketing strategic decisions.

    In addition, enterprises should pay attention to the management of information security in the process of obtaining data information. Big data information data security management is a key influencing factor to ensure. The accuracy and authenticity of enterprises to obtain important market information and customer information. Enterprises should be able to ensure the security protection of customer information and prevent. The leakage of customer group information by introducing advanced data mining technology and analysis technology.

    In addition, enterprises should also actively carry out the introduction of information management databases with high sensitivity, accuracy & security, and corresponding protective firewall technologies, to promote the integration of enterprise information and data, and provide scientific marketing strategies for enterprises. Formulated to provide a solid foundation for protection.

    Strengthen cooperation with enterprises to realize resource sharing

    In the context of the big data era, relying solely on the data information resources owned by the enterprise itself and the data analysis technology and mining technology it has mastered cannot truly fully and accurately guarantee the acquisition and authenticity of data information. Therefore, enterprises should actively develop a strategic cooperation platform for big data operation enterprises, strengthen technical communication, information exchange, and data sharing with data technology enterprises, and use advanced equipment and technical means of partners as well as professional talents to conduct data analysis and analysis of data information.

    Collect, organize, analyze and store comprehensively to ensure the accuracy and authenticity of data information, provide more valuable data information for corporate marketing strategy decisions, and achieve strategic integration to solve the problem of corporate manpower, equipment, technology, and material resources. Insufficient problems, promote the marketing network of enterprises to the greatest extent and realize the acquisition of the final comprehensive benefits.

    Clarify the position of marketing and optimize marketing strategy

    In the context of the era of big data, enterprises must be able to incorporate big data technology into their marketing strategies during the transformation and update process of marketing and rely on big data mining technology and analysis technology to lock in the actual needs of customers, analyze and accurately predict Customers’ consumption preferences, and use this to improve and perfect the marketing strategy, to meet the actual needs of customers and consumer groups in a more targeted manner, and to enhance the company’s marketing value.

    Among them, enterprises should be able to combine Internet technology, big data technology, cloud computing, and other values ​​to substantially improve the level of enterprise marketing decision-making ability, lay a solid foundation for the future development of enterprises, and enable them to obtain more operational benefits. For example, expand the network marketing platform, perfectly integrate online and offline marketing platforms, comprehensively and accurately conduct consumer consumption information and scientific predictions, continuously improve the level of information collection, processing, and analysis of big data platforms, accurately grasp the needs of customers, provide more accurate marketing solutions for user groups, and realize the improvement of enterprise marketing strategies based on meeting customer consumption needs.

    Innovative marketing methods to improve personalized services

    With the continuous growth of people’s economic income, people pay more and more attention to the improvement of material living standards and pay more attention to the service level of enterprises. Therefore, in the process of formulating and improving marketing strategies, enterprises must be able to summarize and analyze various market data, especially carefully analyzing product information and marketing service data, and use this as a basis to carry out marketing models.

    Optimize to provide customers with more personalized services. On the one hand, enterprises must be able to conduct research on consumer demand around the company’s products and service items in light of reality, find out the problems and deficiencies in them, and clarify the direction of improvement, to optimize marketing planning; the other hand, enterprises must actively Pay close attention to the development status of e-commerce marketing, conduct investigations on the actual situation of enterprise products and services through big data analysis, narrow the distance with customers, provide customers with more targeted services, and improve user service experience.

    Tap potential customers and carry out precision marketing

    In the era of big data, the transformation and innovation of corporate marketing strategies must be able to master the skills of mining potential customers, use big data to mine potential customers, and help companies gain a higher competitive advantage in the fierce market competition. Therefore, in addition to providing good services, it is also necessary to mine potential customers.

    Enterprises must be able to give full play to the value and role of big data technology. Conduct careful analysis and in-depth planning for customer groups. Tap customer groups with potential consumption capabilities, expand their markets and increase corporate profits. In addition, it is also necessary to be able to use big data means and new media channels to promote the enterprise. Enhance the influence and attractiveness of the enterprise, cooperate with APPs with stable users. Provide a solid foundation for the expansion of the enterprise marketing channels, and carry out more precise and targeted personalized marketing.

    Epilogue

    To sum up, in today’s era of rapid development of big data technology applications, enterprises must fully realize the value and role that big data technology can bring in the process of marketing innovation and development, and pay attention to For the importance of data mining, continuously improve and perfect the marketing strategy and marketing system, actively establish a big data marketing center, and actively carry out the establishment and integration of marketing databases, constantly change the concept of marketing strategies, and establish big data Thinking, deeply integrate big data technology and marketing, and give full play to the supporting role that big data technology can bring, to continuously optimize the level and quality of marketing reform and improve the marketing efficiency of enterprises. The overall horizontal effect ensures the sustainable development of the enterprise.

    Big Data Environment Impact and Development Image
    Big Data Environment Impact and Development; Photo by Emma Gossett on Unsplash.
  • Adaptive Benefits of Optimistic Self-Beliefs of Efficacy

    Adaptive Benefits of Optimistic Self-Beliefs of Efficacy

    Benefits of Optimistic Self-Beliefs of Efficacy; There is a growing body of evidence that human accomplishments and positive well-being require an optimistic sense of personal efficacy. This is because ordinary social realities strew with difficulties. They are full of impediments, adversities, setbacks, frustrations, and inequities. People must have a robust sense of personal efficacy to sustain the perseverant effort needed to succeed. In pursuits strewn with obstacles, realists either forsake them, abort their efforts prematurely when difficulties arise, or become cynical about the prospects of effecting significant changes.

    Here is the article to explain, What are the Adaptive Benefits of Optimistic Self-Beliefs of Efficacy?

    It widely believes that misjudgment breeds personal problems. Certainly, gross miscalculation can get one into trouble. However, the functional value of accurate self-appraisal depends on the nature of the activity. Activities in which mistakes can produce costly or injurious consequences call for accurate self-appraisal of capabilities. It is a different matter where difficult accomplishments can produce substantial personal and social benefits and the costs involve one’s time, effort, and expendable resources. People with a high sense of efficacy have the staying power to endure the obstacles and setbacks that characterize difficult undertakings.

    When people err in their self-appraisal they tend to overestimate their capabilities. This is a benefit rather than a cognitive failing to eradicate. If efficacy beliefs always reflected only what people can do routinely they would rarely fail but they would not set aspirations beyond their immediate reach nor mount the extra effort needed to surpass their ordinary performances.

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    People who experience much distress have been comparing in their skills and beliefs in their capabilities with those who do not suffer from such problems. The findings show that it is often the normal people who are distorters of reality. But they display self-enhancing biases and distort in the positive direction. People who are socially anxious or prone to depression are often just as socially skill as those who do not suffer from such problems. But the normal ones believe they are much more adept than they really are. The no depressed people also have a stronger belief that they exercise some control over situations.

    Social reformers strongly believe that they can mobilize the collective effort needed to bring social change. Although their beliefs rarely fully realize they sustain reform efforts that achieve important gains. Were social reformers to be entirely realistic about the prospects of transforming social systems they would either forego the endeavor or fall easy victim to discouragement. Realists may adapt well to existing realities. But those with a tenacious self-efficacy are likely to change those realities.

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    Innovative achievements also require a resilient sense of efficacy. Innovations require heavy investment of effort over a long period with uncertain results. Moreover, innovations that clash with existing preferences and practices meet with negative social reactions. It is, therefore, not surprising that one rarely finds realists in the ranks of innovators and great achievers.

    In his delightful book, titled, Rejection, John White provides vivid testimony, that the striking characteristic of people who have achieved eminence in their fields is an inextinguishable sense of personal efficacy and a firm belief in the worth of what they are doing. This resilient self-belief system enabled them to override repeated early rejections of their work.

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    Many of our literary classics brought their author’s countless rejections. James Joyce’s, The Dubliners, was canceled by 22 publishers. Gertrude Stein continues to submit poems to editors for 20 years before one was finally accepting. Over a dozen publishers rejected a manuscript by e. e. cummings. When he finally got it to publish, by his mother, the dedication read, in upper case: With no thanks to . . . follows by the list of 16 publishers who had rejected his manuscript.

    Early rejection is the rule, rather than the exception, in other creative endeavors. The Impressionists had to arrange their own exhibitions because their works go to routinely cancel by the Paris Salon. Van Gogh sold only one painting during his lifetime. Rodin was rejected three times for admission to the ‘cole des Beaux-Arts.

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    The musical works of most renowned composers were initially greeted with derision. Stravinsky was run out of town by enraging Parisians and critics when he first serves them the Rite of Spring. Entertainers in contemporary pop culture have not fared any better. Decca records rejected a recording contract with the Beatles with the non-prophetic evaluation, “We don’t like their sound.

    Groups of guitars are on the way out.” Columbia Records was next to turn them down. Theories and technologies that are ahead of their time usually suffer repeat rejections. The rocket pioneer, Robert Goddard, was bitterly rejected by his scientific peers because rocket propulsion would not work in the rarefies atmosphere of outer space. Because of the cold reception given to innovations, the time between conception and technical realization is discouragingly long.

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    The moral of the Book of Rejections is that rejections should not accept too readily as indicants of personal failings. To do so is self-limiting.

    In sum, the successful, the venturesome, the sociable, the no anxious, the no depressed, the social reformers, and the innovators take an optimistic view of their personal capabilities to exercise influence over events that affect their lives. If not unrealistically exaggerated, such self-beliefs foster positive well-being and human accomplishments.

    Many of the challenges of life are group problems requiring collective effort to produce significant change. The strength of groups, organizations and even nations lies partly in people’s sense of collective efficacy that they can solve the problems they face and improve their lives through unified effort. People’s beliefs in their collective efficacy influence what they choose to do as a group, how much effort they put into it, their endurance when collective efforts fail to produce quick results, and their likelihood of success.

    Adaptive Benefits of Optimistic Self-Beliefs of Efficacy Image
    Adaptive Benefits of Optimistic Self-Beliefs of Efficacy; Image from Pixabay.
  • Economic reforms: Meaning, Definition, Need, and Achievements

    Economic reforms: Meaning, Definition, Need, and Achievements

    Economic reforms in India – Introduction; The performance of the Indian economy within the last decade has been remarkable. Business environment easy – This can partly attribute to the continued economic reforms. Since 1991, the govt of India has introduced diverse economic reforms to tug the country out of the depression and to accelerate the speed of growth. Also, The reforms have embraced almost all aspects of the country’s economy.

    Economic reforms: Introduction, Meaning, Definition, Importance, Need, and Achievements

    Policies concerning industrial licensing, trade and foreign investment have undergone major changes. Also, significant macroeconomic adjustments have taken place. Economic institutions too have undergone a significant change; the banking sector and capital markets, in particular, have been major targets of the change. And finally, structural adjustments covering areas like subsidies, the price Mechanism, and the public sector have also taken place. Collectively, these reforms aim at the modernization of the country’s industrial system, removal of unproductive controls, strengthening of private investment, including foreign investment, and integration of India’s economy with the global economy.

    In one word, it can be said that the all-around opening up of the country’s economy has been the essence of the reforms. All these economic reforms knowing as the new Economic Policy. Accordingly, New Economic Policy refers to all those different economic reforms introduced since July 1991 or policy measures and changes that aim at increasing productivity and efficiency by creating an environment of competition in the economy.

    Meaning and Definition of economic reforms:

    Economic reforms or new policy refers to varied policy measures and changes introduced since 1991. The common objective of all these measures is to improve the productivity and efficiency of the economy by creating a more competitive environment therein.

    The reforms are often classified into two broad categories:

    Changes in the sphere of industrial licensing policy and foreign trade as well as foreign investment policies belong to the first category. Also, Reforms touching the macroeconomy and economic institutions plus structural adjustments covering areas like subsidies, price environment, and public sector, belong to the second category. All these initiatives collectively mention because of the New Economic Policies (NEP).

    Importance and Need for Economic Reforms or New Economic Policy:

    About five decades back (1st April 1951) India had commenced its journey to economic development on the path of a socialistic pattern of society and mixed economy. So far India has completed 9 five-year plans. There is no denying the fact that in these five decades Indian economy has achieved many successes but the number of failures is by no means small. During the period of planning the public sector was given utmost importance. Also, The private sector was largely kept under government control. Trade and industry were subjected to many restrictions. Bureaucracy and red-tapism were the normal features of the economy. The cumulative effect of all this was that at the end of June 1991, the country landed in an unprecedented economic crisis.

    Stores of unfamiliar trade were only adequate to pay for fourteen day’s imports. New loans were not available. Enormous sums were being removed from the records of non-private Indians (NRIs). The faith of the international community in the Indian economy was shaken. Industrial progress was in reverse gear and prices were skyrocketing. To haul the economy out of monetary emergency and to put it on the way to quick and consistent financial development; it was generally fundamental to address monetary disequilibrium, check expansion, the right unfriendly equilibrium of installments, and recharge trade saves. To achieve all these objectives, the introduction of economic reforms or an appropriate economic policy was considered inevitable.

    The importance and need for economic reforms or the New Economic Policy were felt predominantly in light of the accompanying reasons.

    Increase in Fiscal Deficit:

    Before 1991, the monetary shortfall of the public authority had been mounting quite a long time after year because of the constant expansion in its non-advancement use. Also, Financial A shortage implies the contrast between absolute consumption and all-out receipts with fewer credits. It is equal to add up to borrowings by the public authority. In 1981-82, it was 5.4 percent of total national output (GDP). In 1990-91, it rose to 8.4 percent of GDP.

    To meet the monetary shortfall, the public authority obliges to raise advances and pay interest consequently. Consequently, because of the persevering ascent in the financial shortage, there was a relating ascend in open obligation and interest installment risk. In 1980-81, interest installment on open obligation added up to 10 percent of complete government consumption. In 1991, the measure of interest risk rose further to 36.4 percent of complete government use. There was not kidding anxiety that the public authority was quick-setting out toward an obligation trap.

    Increase in Adverse Balance of Payments:

    The equilibrium of an installment is the distinction between absolute fares and all-out imports of a nation. Exactly when outright imports outperform full-scale tolls, the harmony of portions gets threatening. Also, The public authority conceded assorted sorts of motivating forces and concessions to the exporters under the fare advancement program, yet the fare didn’t ascend to the ideal degree. It was fundamentally because in the global market our fares couldn’t contend in cost and quality.

    This was the immediate consequence of the arrangement of assurance so generously sought after by the public authority and for such a long time. As against the moderate development of fares, there was a quick expansion in imports. Subsequently, the equilibrium of installments shortfall expanded without question. The shortage of the equilibrium of installments had been rising consistently since 1980-81. For example, in 1980-81, the equilibrium of installments on the current record was unfavorable to the tune of Rupees 2,214 crore and it rose in 1990-91 to Rupees 17,367 crore. To meet this insufficiency a tremendous proportion of new credits should obtain.

    Gulf Crisis:

    Under the Iraq war in1990-91, costs of petroleum shot up. India used to get a colossal measure of settlements from Gulf nations in unfamiliar trade all that halted completely. Inlet emergency consequently further complimented as of now an antagonistic equilibrium of installments position. This has expanded the equilibrium of installments shortfall definitely.

    Fall in Foreign Exchange Reserves:

    In 1990-91 India’s new exchange saves tumble to a specific level that the identical was adequately not to cover for an import tab for even 10 days. Unfamiliar trade saves that were Rupees 8,151 crore in 1986-87 declined pointedly to Rupees 6,252 crore in 1989-90. The circumstance developed so intense that the Chandrashekhar government needed to contract the nation’s gold to release its unfamiliar obligation overhauling commitment.

    Ascend in expenses:

    In India, costs continued rising high. The normal yearly pace of expansion expanded from 6.7 percent to 16.7 percent. The fundamental explanation behind expansion or a yearly pace of expansion in costs was a quick expansion in the stockpile of cash. This, thusly, was because of the over top hotel to the shortage of financing by the public authority. Shortage financing infers getting from the Reserve Bank of India by the public authority to meet its shortfall. Bank offered this development by printing new money notes. The expense of creation takes an upward bounce because of the high pace of expansion. It unfairly impacts local and new interest in our things.

    Lackluster appearing of Public Sector Undertakings (PSU):

    In 1951 there were just 5 undertakings in the public region in India anyway in 2001 their number rose to 232. Two or three thousand crores of public resources were added to that. In the underlying 15 years, their working was very agreeable yet from that point the majority of these endured misfortunes. As a result of their terrible showing. Public area endeavors deteriorated into a risk.

    Because of the above convincing elements, it got inescapable for the public authority to embrace the New Economic Policy. It was even more important to increment mechanical yield and pull in unfamiliar capital.

    Some Basic and Advanced Achievements of Economic Reforms:

    The second economic reforms were reported in July 1991; there was an inclination that the public authority was slackening a portion of the controls. The troubles and postponements related to the previous arrangement of controls were currently expected to evaporate. Fourth biggest economy (US dollar 3 trillion GDP) as far as Purchasing Power Parity after the USA, China, and Japan. The basics of the Indian economy have got solid and stable.

    The large scale economic pointers are at present the best throughout the entire existence of autonomous India with high development, solid unfamiliar trade holds, and unfamiliar venture and powerful increment the basics of the Indian economy have gotten solid and stable. The full-scale economic markers are at present the best in the historical backdrop of autonomous India with high development, sound unfamiliar trade saves, and unfamiliar speculation and hearty expansion in fares, and low swelling and financing costs.

    Likewise, a portion of the significant achievements of economic reforms can summarize as follows:

    First achievements
    • The growth pace of the economy regarding GDP development got and arrived at a pinnacle pace of 8.4 percent in 2002-03. A novel element of the progress of the Indian economy is that it has become the second-quickest developing economy of the world in the year 2003 – 04. In the monetary year 2004 – 05, the GDP development has arrived at the midpoint of 6.9% (assessed). India has recorded one of the most noteworthy development rates during the 1990s. The objective of the tenth five-year Plan (2002-07) is an 8% development rate.
    • India’s administration area developed by 9.4% in 2004-05. Unfamiliar direct speculations have expanded from under 0.05 percent of GDP to more than 0.4 over a penny of GDP in 2002-03.
    • The unfamiliar trade holds have arrived at a record level of US dollar 138.84 billion in June 2005. Also, The agreeable circumstance of forex holds has encouraged further unwinding of unfamiliar trade limitations and a continuous move towards more prominent capital record convertibility. As per the IMF (2003 report), India’s Forex Policies by worldwide prescribe procedures.
    Second achievements
    • The unfamiliar trade save has expanded quickly. In 1990-91, the unfamiliar trade saves were sufficient to back imports for 2.5 months. In 2002-03, they are sufficient to back imports for 11 months. Unfamiliar Exchange Reserves (US dollar 138.84 billion) presently far surpass Foreign Debt (US dollar 113 billion as of September 2004).
    • The short-term obligation is under 4 percent of the stores. In March 1991 Forex Reserves including gold remained at dollar 5.8 billion as against the outer obligation of dollar 83 billion. The outer obligation to GDP proportion has improved altogether from 38.7% in 1992 to 17.8% at end of March 2004. This is one of the least among creating economies. The outer obligation in December 2004 was 120.9 billion US dollars. Of these drawn-out NRI, stores are dollar27 billion, business borrowings dollar24 billion, multilateral obligation dollar 31 billion, and respective obligation dollar 18 billion.
    Third achievements:
    • The pace of modern development likewise began ascending from 1993-94 onwards. It arrived at a pinnacle pace of 6.7 percent in 2002-03.
    • The average pace of expansion has been decreased extensively, from almost 13.6 percent in 1991-92 to around 3.4 percent in 2002-03.
    • The Government has chosen to (1) cease getting help from different nations aside from the accompanying nine: Japan, UK, Germany, USA, EU, France, Italy, Canada, and the Russian Federation and (2) to make pre-installment of all respective obligation owed to all the countries aside from the ones referenced previously. Since July 2003, India has become a net leaser to IMF, in the wake of having been a borrower before.
    • The Government has discounted obligations of US$ 30 million due from seven intensely obliged nations as a component of the “India Development Initiative” reported in February 2003. Also, The loan cost keeps on being decreased and is around 6%. This is the most minimal over the most recent thirty years and it is animating utilization and speculation.
    Forth achievements
    • Thanks to the presentation of screen-based exchanging and electronic conveyance, the financial exchange has been genuinely changed. Their joined impact has been to lessen the exchange costs in India’s securities exchange drastically.
    • India is turning into a creation base and a fare center point for assorted merchandise, from horticultural items to vehicle segments to top of the line administrations. Indian firms are presently essential for worldwide creation chains — bringing in sub-gatherings, enhancing them, and re-sending out them.
    • Taking the favorable position of its pool of top-notch logical ability, global enterprises have set up enormous R&D focuses in India. Every one of these qualities has brought about the more noteworthy joining of the Indian economy with the world economy. The exchange has ascended from 21 percent to 33 percent of India’s GDP in 10 years.
    Economic reforms Introduction Meaning Definition Importance Need and Achievements Image
    Economic reforms: Introduction, Meaning, Definition, Importance, Need, and Achievements; Image from Pixabay.
  • Entrepreneurial Ecosystem: Meaning, Definition, and Features

    Entrepreneurial Ecosystem: Meaning, Definition, and Features

    Explore the concept of entrepreneurial ecosystems and their impact on business success and economic development globally. Entrepreneurial Ecosystem: The entrepreneurial ecosystem or environment is the accumulation of every one of those outer conditions and impacts, which influence the everyday routine of experiencing creatures and advancing business. A business venture can address holes in financial development, strength, and different proportions of prosperity in countries around the globe. However, moving from a needs-based business venture in the informal economy to opportunity-based firm creation can be intense; particularly in developing business sector economies. What’s more, the environment or ecosystem wherein a business visionary is working, legitimately and by implication, influences entrepreneurial achievement and effect.

    Entrepreneurial Ecosystem understands by their Meaning, Definition, Features, and Areas.

    What is an Entrepreneurial Ecosystem or Environment (In Hindi)? The entrepreneurial ecosystem characterizes as a network that makes different factors free from one another; which collaborates with themselves in a geological region and advance. The intention is to advance the making of new organizations.

    As references before, the Entrepreneurial Ecosystem is a mix of social, monetary, social, and political segments inside a district. Further, an improved Entrepreneurial Ecosystem makes with the assistance of different components to support; and, create which is useful to develop the business new companies that are being started.

    Likewise, recently entered Entrepreneurs are enlivened to accept the danger just as start looking for some financing for their recently evolved ventures. Inside the neighborhood environment of businesspeople; every one of these substances connects and making their performance formally just as informally. Hence, the whole framework can work together; and, the communication between these subsystems must be done in a way that can achieve the rationale.

    Meaning of Entrepreneurial Ecosystem or Environment:

    Which means of Entrepreneurial Ecosystem or Environment; Encouraging business is presently the core competency of financial improvement in different city’s around the globe. The entrepreneurial ecosystem makes of different partners who are from the private and public areas. They additionally involve individual and aggregate partners and strategies quantify that correctly characterize and receive to improve their enunciation, activity, and advancement.

    The essential goal here is to advance business venture, make the monetary turn of events, and upgrade esteem creation. There are various ways to deal with characterizing ecosystems: high human resources capability, favorable culture, open business sectors, monetary framework, administration and strategy measures, and so on.

    Definition of Entrepreneurial Ecosystem or Environment:

    Entrepreneurial success, as well as impact, directly or indirectly gives effect by the environment or ecosystem in which it is operating its own build company or business. Their definitions below are;

    According to Mason & Brown;

    “The entrepreneurial ecosystem is a set of different individuals who can be potential or existing entrepreneurs, organizations that support entrepreneurship that can be businesses, venture capitalist, business angels, and banks, as well as institutions like universities, public sector agencies, and the entrepreneurial processes that occur inside the ecosystem such as the business birth rate, the number of high potential growth firms, the serial entrepreneurs and their entrepreneurial ambition.”

    According to Stam & Spigel;

    “The entrepreneurial ecosystem improvement created by the different elements generates support to develop and help to grow the startups that are building up. As well, new entrepreneurs encourage to risk and start looking for funding for their projects.”

    The entrepreneurial ecosystem or environment defines as a community that makes multiple factors independent from each other; which interact with themselves in a geographical area and evolve. The purpose is to promote the creation of new businesses.

    Characteristics or Attributes or Features of an Entrepreneurial Ecosystem or Environment:

    As we as a whole know, the Entrepreneurship Ecosystem greatly affects the development of the business and makes it simple to make some finance from different foundations. All these super-adventure social orders are useful and help a venture to encourage their business and work with some open just as private sector pioneers over countless districts and countries over the world.

    Therefore, let us get a fresh start of the Entrepreneurial Ecosystem and examine a portion of the attributes that give a superior comprehension of the entire idea immediately. Let us investigate these beneath.

    Contains or comprises six individual areas:

    Several components are important for the Entrepreneurial Ecosystem which isolates into six general areas. It incorporates culture, permitting approaches and authority, a fitting measure of account accessibility, nature of human resources, markets dependent on adventures for items; and, a wide scope of institutional just as infrastructural help.

    A helpful culture, accessibility of account, empowering administration and approaches, human resources, showcases that are adventure amicable for items, and different sorts of support. It is fundamental to comprehend that each business ecosystem is exceptional. Albeit all these six spaces can utilize to depict it, each ecosystem is the aftereffect of various factors collaborating in quirky manners. Therefore, having basic spaces doesn’t really imply that all the ecosystems are equivalent.

    Every Ecosystem is exceptional:

    With the assistance of these six areas, we will get a portrayal of the Entrepreneurial Ecosystem and comprises six standard spaces yet these areas contain a few quantities of segments that have an elevated level of intricacy and singularity. To represent, in the year the 1970s, the Entrepreneurial Ecosystem of Israel created with no characteristic assets, military basics, and a long way from the significant market of their items.

    Moreover, the ecosystem of Ireland developed with free training, worldwide multinationals, local English; and the European market’s vicinity in the year 1970s. On the off chance that discussing the Entrepreneurial Ecosystem of China, at that point, it is creating with regards to different strategies dependent on areas and an extremist political framework.

    Variety in the entrepreneurial ecosystem:

    Variety is an essential piece of advancement. Different data sources are required for the business venture from different individuals who start organizations. The culture requires, which supports various networks and various ventures with various thoughts. At the point when different portfolio speculation happens, it must appear to perform the best.

    Lawful Framework:

    Factors, for example, schooling, capital business sectors, regulatory and legitimate framework sway business venture for quite a while. In any case, even though these factors sway for quite a while, they are powerless. At the point when numerous factors work together, critical changes happen in a business venture, which sees now and again.

    It takes a couple of distinctive individuals to cause a huge change. Therefore, while it is useful to survey every business ecosystem, small mining conventional parts are not helpful.

    The ability which encourages the organizations to develop:

    A large portion of the entrepreneurial ecosystem is ability magnets. They require drawing in, holding, and reliably developing ability in their organization. This likewise incorporates business visionaries and possible managers. There are considerable cross-linkages between colleges, schools, and the private sector. This is fundamentally done with the goal that the gracefully and interest for ability are overseen effectively.

    Ability is fundamental in developing the business, and what’s more important is to hold it. The commercial center is developing quickly, and fast improvement is occurring all over. Organizations who were never into advanced advertising are currently searching for content scholars; and, web-based media supervisors after COVID-19 (Coronavirus disease). In such cases, holding existing ability ends up being more affordable than getting new ability.

    Information and assets to help business visionaries:

    There are different information and assets which are needed by business visionaries. It might incorporate fundamental inquiries like how to get my export permit to major methodology changes and the executive’s changes.

    When there is a flourishing ecosystem, it winds up profiting the business visionaries. There are different assets required by business visionaries like capital, gifted individuals, space for office, and other expert administrations. In an ideal entrepreneurial ecosystem, these are richly accessible.

    Entrances and convergences:

    Entrances develop networks by getting more ability. They cultivate variety and permit various cooperations, which lead to novel thoughts. At the point when solid ecosystems are noticeable and have well-coming entrances, they make the ecosystem simple to get to. This is valid for anybody regardless of their experience or experience. At the point when thoughts, individuals, and assets blend, it causes convergences that help the business people locate the missing bits of the riddle.

    Good fortune is to design in the ecosystems so impacts can occur, which can assist with taking care of issues. These crossing points can be foundations, for example, cafés or occasions, for example, pitch rivalries or meetups. Nowadays online crossing points are filling in prominence by a leeway channel or Twitter hashtag. This empowers business people to impart and meet a virtual network.

    A collaboration which brings about brilliant social capital:

    Ecosystems flourish because of different societies. An ecosystem’s way of life is wealthy in social capital, social trust, and different factors that encourage coordination and participation among the individuals of the entrepreneurial ecosystem. An ecosystem that doesn’t have an appropriate culture doesn’t develop or motivate individuals to move rapidly.

    It is likewise not open to clever thoughts and causes one another, subsequent in an undesirable ecosystem. The people group culture requires to sustain and develop so it prompts great qualities in the ecosystem. This happens when individuals take part in the way of life and normally get adjusted to it.

    Entrepreneurial ecosystems are generally self-continuing:

    This happens because achievement brings and breeds achievement. The six spaces referenced above ought to improve in the ecosystem, and there comes a tipping moment that the administration association ought to decrease yet not dispensed with.

    When the entirety of the areas are solid, at that point they commonly increment and improve. In such cases, public pioneers don’t put resources into them a great deal. Ordinarily, business venture programs are intended to act naturally exchanging so they can zero in on having an economical environment.

    Social-financial environment:

    The entrepreneurial ecosystem additionally considers a social-monetary environment that shapes and cultivates business ventures locally and territorially. It does as such by thinking about it as a monetary advancement technique.

    At the point when this framework utilizes, the center is to create an area and worth expansion and worth creation. Many vital participants adjust to the entrepreneurial attitude and related exercises. It is typically an aggregate system used to learn by utilizing the way to deal with creative opportunities and resources.

    Key areas of the Entrepreneurial Ecosystem or Environment:

    On this planet, everything is a piece of an ecosystem, for example, the watershed, the creepy crawlies, the trees, the grass, and the business that is running or out and about of development. With the development of your business, the expression “Entrepreneurial Ecosystem” suits best with it and it has six major spaces. A lot of models for the Ecosystem are there however we just think about these six as an establishment and here, we will improve comprehension of these areas.

    The six spaces incorporate arrangement, culture, supports, human resources, account, and markets. Every one of these spaces shows that there is a change from customary financial intuition to a creative and new monetary individuals’ view, networks, just as establishments. Cooperation between these spaces of the ecosystem is additionally a sort of Entrepreneurial movement. This result views as the cycle in which the individual transforms the opportunities into innovativeness and development. One small step at a time, another incentive to the general public gives through the improvement of new items and administrations.

    Along these lines, let us start with the six major areas of the Entrepreneurial Ecosystem that should remember while working any kind of business.

    Strategy Area:

    Over the different regions of the world, the mainstays of government guidelines assort, and each approach of the public authority can liven up or downsize the capacities to begin, and the development of the business. Under this area, it has different components, for example, the simple advance to begin a business, motivation on assessments, and laws that could be cordial with the business.

    As like that, this space likewise incorporates the actual structure, where there is admittance to the foundation, transport just as media transmission that additionally influences the organizations according to the World Economic Forum.

    Account Area:

    For a wide range of organizations, it is successful and profitable to have monetary stores as they can keep up development by getting more assets. A vital part of any business is the money related assets as it offers help to name individuals and to buy just as rental properties just as instruments and make interests in promoting and deals, and monitor clients.

    The money related choices that are accessible with the startup of organizations likewise started with kinfolk and kith, investors, funding, private value, and obligation access. There is a positive connection between the progression of account and business development according to the World Economic Forum.

    Culture Area:

    It has been contended that gazing social support needs for an undertaking to build up an arising Entrepreneurial ecosystem. The resistance of danger and disappointment inside an undertaking, priority given to independent work, development festivity, examples of overcoming adversity, research societies, and good examples are the viewpoints that are consistent of enormous importance in social support as clarified by the World Economic Forum. All these make a social area.

    Support Area:

    An assortment of particular, establishments, just as organizations, helps the business to make and grow also. A few actors that included are mentors, specialists, experts, for example, bookkeeping, incubators, accelerators, HR, etc. (Clarified by World Economic Forum)

    Human Resources Area:

    The quality and the amount of the workforce are the human resources area. Because of the aptitudes and capacities that individuals have, the working environment makes accordingly. There are a few components of this space, for example, specialized and the board’s ability, the experience of an entrepreneurial organization, migrant workforce access, and the accessibility of re-appropriating. A mix of such parts influences the development of the business. Inside the space of human resources, instruction and preparation thought of.

    Market Area:

    The portrayal of the buyer’s readiness to purchase items just as administrations of an organization shows by the market area. Further, the capability of the shoppers considers as a key angle and there are some different parts of the market space like the public and worldwide market, little, enormous, and medium-sized organizations that are imperative to arrive at the business and develop over an area.

  • Business Environment: Definition, Nature, Importance, and Components

    Business Environment: Definition, Nature, Importance, and Components

    Learn Business Environment: Business means human activity directed towards producing or acquiring wealth through buying and selling goods. It can define as “the forces, factors, and institutions with which the businessman has to deal with to achieve its objectives”. Here are articles explain Business Environment with their topics of Meaning, Definition, Nature, Importance, and Components. It is a complex field of commerce and industry in which goods and services are created and distributed in the hope of profit within a framework of laws and regulations.

    What does mean Business Environment? Explain Meaning, Definition, Nature, Importance, and Components.

    Environment scanning can define as a process by which organizations monitor their relevant environment to identify opportunities and threats affecting their business. No company can survive in the market by ignoring the effects of Business Environment. As well as, efficient management analyses the environment and makes changes in organizational policies to integrate its activities with Business Environment.

    The most suitable example to prove the impact of Business Environment is the controversial case of Pepsi and Coke Company. Business Environments provide constraints as well as opportunities for the businessman. For example, the regulation such as the MRTP Act and wealth restriction put constraints on the businessman. On the other hand, the liberalization policies, import relaxation policies bring opportunities for the businessman.

    Definition of Business Environment:

    The word business environment has been defined by various authors as follows,

    According to Wheeler as;

    “The total of all things external to firms and industries that affect the function of the organization is called business environment.”

    According to Arthur M. Weimer as;

    “Business Environment encompasses the -climate’ or set of conditions, economic, social, political or institutional in which business operations are conducted.”

    According to Keith Davis as;

    ‘‘Business environment is the aggregate of all conditions, events, and influences that surround and affect it.”

    Thus the business is an economic activity performed by human connection with the production and exchange of goods and services with a profit motive under the laws and regulations of the country. Based on the above definitions, it is very clear that the business environment is a mixture of complex, dynamic and uncontrollable external factors within which a business is to operate.

    Nature of Business Environment:

    The nature of Business Environment is simply and better explaining by the following approaches;

    1] System Approach:

    In original, business is a system by which it produces goods and services for the satisfaction of wants, by using several inputs, such as, raw material, capital, labor, etc. from the environment.

    2] Social Responsibility Approach:

    In this approach, the business should fulfill its responsibility towards several categories of society such as consumers, stockholders, employees, government, etc.

    3] Creative Approach:

    As per this approach, the business gives shape to the environment by facing the challenges and availing the opportunities in time. Also, the business brings about changes in the society by giving attention to the needs of the people.

    Importance of Business Environment:

    The importance of business environment explains with the help of the following points:

    1] Help to understand internal Environment:

    It is very much important for business enterprises to understand their internal environment, such as business policy, organization structure, etc. In such a case an effective management information system will help to predict the business environment changes.

    2] Help to Understand Economic System:

    The different kinds of economic systems influence the business in different ways. A businessman and business firm need to know about the role of capitalists, socialist and mixed economy.

    3] Help to Understand Economic Policy:

    Economic policy has its importance in the business environment and it has an important place in business. Also, the business environment helps to understand government policies such as export-import policy, price policy; monetary policy, foreign exchange policy, industrial policy, etc. have much effect on business.

    The big plans or strategies and policies in the organization are formed keeping in mind the business environment because the strategies and policies have to execute in the presence of environmental factors. Scanning of environmental factors helps to find out the problems of business and makes a better strategy to resolve them.

    4] Help to Adapt and Adjust with the Rapid Changes:

    In today’s world, changes are taking place very fast and these fluctuations have a great impact on business. So it is important to understand these changes as fast as possible. The business environment helps to scan the problems of the companies and also helps to remove them for future benefits.

    The businessman did changes in their internal environment also to match the external environment. With the help of a scanning environment, the Ambani bros recognized that today’s environment demands quick decision so they shifted from centralization to decentralization.

    5] Help to Understand Market Conditions:

    An enterprise must know the market structure and changes taking place in it. The knowledge about the increase and decrease in demand, supply, monopolistic practices, government participation in business, etc., is necessary for an enterprise.

    Components of Business Environment (Download PDF file):

    Every business firm consists of a set of internal factors and it also confronts a set of external factors. The following components factor you a more clear and comprehensive explanation about the different factors of the internal and external business environment.

    Internal Business Environment:

    Several factors influence the various strategies and decisions within the organization’s boundaries. These factors are known as internal factors and are given below:

    1] Human Resources:

    It involves the planning, acquisition, and development of human resources necessary for organizational success. It points out that people are valuable resources requiring careful attention and nurturing. Progressive and successful organizations treat all employees as valuable human resources. The organization’s strengths and weaknesses also determined by the skill, quality, morale, commitment, and attitudes of the employees. Organizations face difficulties while carrying out modernizations or restructuring process by the resistance of employees. So, the issues related to morale and attitudes should seriously be considered by the management. Moreover, global competitive pressures have made the skillful management of human resources more important than ever. The support from the different levels of employees supports the management in the different decisions and their implementations.

    2] Company Image:

    One company issues shares and debentures to the public to raise money and its instruments oversubscribe while the other company seeks the help of different intermediaries like underwriters to generate finance from the public. This difference underlies the distinction between the images of the two companies. Also, the image of the company matters in certain other decisions as well as forming joint ventures, entering contracts with the other company or launching new products, etc. Therefore, building a company image should also be a major consideration for the managers.

    3] Management Structure:

    Gone are the days when business was carried out by the single entrepreneur or in the formation of partnerships. Now it has reshaped itself into the formation of the company where it is run and controlled by the board of directors who influence almost every decision. Therefore, the composition of the board of directors and nominees of different financial institutions could be very decisive in several critical decisions. The extent of professionalization is also a crucial factor while taking business decisions.

    4] Physical Assets:

    To enjoy economies of scale, a smooth supply of produced materials and efficient production capacity are some of the important factors of business that depend upon the physical assets of an organization. These factors should always keep in mind by the managers because these play a vital role in determining the competitive status of a firm or an organization.

    5] R & D and Technological Capabilities:

    Technology is the application of organized knowledge to help solve problems in our society. The organizations which are using appropriate technologies enjoy a better competitive advantage than that of their competitors. The organizations which do not possess strong Research and Development departments always lag in innovations which seems to be a prerequisite for success in today’s business. Therefore, the R & D and technological capabilities of an organization determine a firm’s ability to innovate and compete.

    6] Marketing Resources:

    The organizations which possess a strong base of marketing resources like talented marketing men, strong brand image, smart salespersons, identifiable products, wider and smooth distribution network and high quality of different services, make effortless inroads in the target market. As well as, the companies which are having so strong basis can enjoy the fruits of brand extension, form extension, and new product introduction, etc. in the market.

    7] Financial Factors:

    The performance of the organization is also affected by certain financial factors like capital structure, financial position, etc. Certain strategies and decisions are determined based on such factors. Also, the ultimate survival of organizations in both the public and private sectors is dictated largely by how proficiently available funds are managed. So, these were some of the factors related to the internal environment of an organization. These factors are generally regarded as controllable factors because the organization commands control over these factors and can modify or alter as per the requirement of the organization.

    Business Environment Definition Nature Importance and Components Image
    Business Environment: Definition, Nature, Importance, and Components. Image from Pixabay.

    External Business Environment:

    Companies operate in the external environment that forces and shape opportunities as well as threats.

    These forces represent “noncontrollable”, which the company must monitor and respond to. SWOT (Strengths, weaknesses, opportunities, and threats) analysis is very much essential for the business policy formulation which one could do only after examination of the external environment. The external business environment consists of macro-environment and micro-environment.

    1] Micro Environment:

    The company’s immediate environment where routine activities affect by certain actors. Suppliers, marketing intermediaries, competitors, customers, and the public operate within this environment. Also, the micro factors don’t need to affect all the firms. Some of the factors may affect a particular firm and do not disturb the other ones. So, it depends on that to what type of industry a firm belongs to. Now let’s discuss in brief some of the micro-environmental factors.

    • Suppliers.
    • Customers.
    • Competitors.
    • Marketing Intermediaries, and.
    • Publics.
    2] Macro Environment:

    With the rapidly changing scenario, the firm must monitor the major forces like demographic, economic, technological, political/legal and social/cultural forces. The business must pay attention to their casual interactions since these factors set the stage for certain opportunities as well as threats. These macro factors are, generally, more uncontrollable than the micro factors. A brief discussion of the important macro-environmental factors give below:

    • Demographic Environment.
    • Economic Environment.
    • Technological Environment.
    • Political or Legal Environment, and.
    • Social-cultural Environment.
  • Political Environment: Legislature, Executive, and Judiciary

    Political Environment: Legislature, Executive, and Judiciary

    The influence of the political environment of business is enormous. This article explains the topic of the International political environment and system: with their important concepts; Legislature, Executive, and Judiciary. The political system prevailing in a country decides, promotes, fosters encourages, shelters, directs and controls the business activities of those countries. Political Environment is the relationship between the state government and institutions legislation public and private in the Business environment.

    International political environment and system: with their important concepts; Legislature, Executive, and Judiciary.

    A political system that is stable, honest, efficient and dynamic and which ensures political participation of the people, and assures personal security to the citizens, is the primary factor for the growth of any business. Two basic political philosophies are in existence all over the world, viz., democracy and totalitarianism.

    In its pure sense, democracy refers to a political arrangement in which supreme power vests in the people. Democracy may manifest itself in any of two fundamental manners. If each individual is given the right to rule and vote on every matter, the result is pure democracy which is not, however, workable in a complex society with a large constituency.

    Hence, the republican forms of the organization follow whereby the public, in a democratic manner, elect their representatives who do the ruling. In totalitarianism, also, call authoritarianism, individual freedom is completely subordinate to the power of authority of the state and concentrates in the hands of one person or in a small group that is not constitutionally accountable to the people.

    Societies ruled by a pressure clique – political, economy or military – or by a dictator plus most oligarchies and monarchies belong to this category. The doctrine of fascism and erstwhile Russian Communism is an example of totalitarianism.

    India is a democratic country. Our political system comprises three vital institutions:

    • Legislature.
    • Executive or government, and.
    • Judiciary.

    Now, explain each one:

    Legislature:

    Out of three, the legislature is the most powerful political institution vested with such powers as policy making, law-makings, budget approving, executive control and acting as a mirror of public opinion. The influence of the legislature on business is considerable. It decides such vital aspects as the type of business activities, the country should have, who should own them, what should be their size of the operation, what should happen to their earnings and other related factors.

    The legislature is the most powerful institution. The main powers are vesting in the legislature are; in today’s economies, particularly of developing countries like India, the relevance of a protective legal environment for Business assumes immense proportions as it is the very foundation of every investment decision.

    The business has to be within the law of the Land. Every aspect of the business from its birth till death covers under the laws to ensure that not only profit is earned in a justified and fairway but also to ensure that in the attainment of business interests the interest of each person fully protect and the profits of the business are distributing in a manner beneficial to the society.

    Government as Executive:

    Also called the “state” the term government refers to “the center of the political authority having the power to govern those it serves”. For business consideration, we should know what are the government’s responsibilities to the business.

    Specifically, the executive or government’s responsibilities towards business are as follows:

    • Establishment and enforcement of the law.
    • Maintenance of order.
    • Money and credit.
    • Orderly growth.
    • Infrastructure.
    • Information.
    • Assistance to small industries.
    • Transfer of technology, and.
    • Tariffs and Quotas.
    More things:

    The Government or executive is the executory body of the laws which are framed by the legislature.

    According to E. V. Schneider,

    “Government is that institution by which men everywhere, seek to order society, that is, to control the structure and functioning of society.”

    According to Musselman and Hughes,

    “Government is the center of the political authority having the power to govern those it serves.”

    In simple words, the role of the Government or executive is to shape, direct and control the business activities. The translations of the objective of any laws to the reality depend as much upon the law itself as on its implementation. The implementation of the law in its word and spirit only can ensure the realization of its true objectives.

    Indian constitution provides for a federal set up with powers being divided between central and state governments. The powers and functions of central and state governments are described in the constitution.

    Judiciary:

    The third political institution is the judiciary. Judiciary determines how the work of executives has been fulfilled. It settles the relationship between private citizens, on one hand, and between citizens and the government upon the other. The judiciary sees to it that the exercise of authority by the executives is according to the general rules laid down by the legislature, it may declare that any particular order issued is, in fact, ultra vires (beyond the authority). It is the power of the Judiciary to settle legal disputes that affect business considerably.

    1) Disputes between employers and employees, 2) employer and employer, 3) employee and employee, 4) employers and the public, and 5) employers and the government.

    The power of the judiciary is of the dual type:

    • The authority of the courts to settle legal disputes, and.
    • Judicial review – the authority of the courts to rule on the constitutionality of legislation.

    What is the International political environment?

    Introduction: The political environment of the country of operation becomes increasingly important for the international firm. As it moves from exports to foreign direct investment (FDI) as the mode of international market entry. Exporting firms use political pressure tactics to have free exportability of the products in their home country regulations, hassle-free procedures, and legislative requirements and export incentives.

    Besides, diplomatic channels are utilizing to get improve market access for imported goods in the target foreign country markets, reduced import tariffs, compatible quality regulations, etc. The dispute settlement mechanism, legal framework, and judicial independence are also critical to fair treatment expecting in international business. Cordial political relations between the firm’s home country and the host countries have a direct favorable impact on FDIs.

    More things:

    As a firm expands internationally and begins to operate in multiple countries, political and legal issues become increasingly complex. Consequent to economic liberalization in the People’s Republic of China, multi­level marketing firms, such as Amway, Avon, Tupperware, and Mary Kay Cosmetics grew rapidly. By 1997, Amway had approximately 80,000 sales representatives who generated $178 million in sales. Whereas Avon had nearly 50,000 representatives who generated sales of $75 million.

    It was reported that some other companies using the so-called pyramid schemes were cheating consumers. Consequently, the Chinese government banned direct selling in April 1998. As a result, direct marketing companies were prohibited to operate their business model in China. It was only after diplomatic pressures and negotiations between the US and the Chinese governments that the policy was reversed. The firm-level economic and political interests of the home and the host countries may differ widely.

    International managers need to understand the significance of political decision-making in the host country that may severely influence its overseas operations. International business relations between the firms are greatly affecting “affinity” or “animosity” among the countries based on historical or political reality. For instance, India’s political affinity with Sri Lanka and Mauritius has led to a high level of trade and investment whereas the reverse situation exists in the case of Indo-Pak trade.

    Political Environment Legislature Executive and Judiciary
    Political Environment: Legislature, Executive, and Judiciary, #Pixabay.

    International Political Systems and Ideologies:

    International political and economic systems or environments hardly function independently. The two are mutually inter-dependent. Political and diplomatic relations between the two counties greatly influence their economic relations. The political system of a country comprises various stakeholders. Such as the government, political parties with different ideologies, labor unions, religious organizations, environmental activists, and various NGOs.

    Each of these players in a political system has its own unique sets of beliefs and aspirations and exerts its influence upon political decisions. The acquisition, development, securing, and use of power about other entities. Where did power view as the capacity of the social actors to overcome the resistance of the other actors are term as political behavior? Ideology is a set of beliefs or ideas as to how the society or group should organize, politically, economically, or morally.

    More knowledge:

    Political ideology is a set of ideas or beliefs. That people hold about their political regime and its institutions about their position and role in it. Ideologies of different groups or political parties are often conflicting and they keep on challenging each other. In democratic countries, such as India, the US, and the UK, the shift in the political parties and their ideologies puts pressure on business operations of foreign firms. The power exerted by different pressure groups also varies from country to country.

    For instance, communist or socialist parties in countries, such as Russia and China hardly face any considerable challenge whereas such parties exert sizeable political pressure in countries like India, Sweden, Italy, and Greece. On the other hand; these parties hardly have any political viability in the US. Most religious organizations are politically neutral in India. Whereas the Catholic Church played a crucial role in overthrowing Ferdinand Marcos in the Philippines and the liberation of Poland from Soviet domination. Islamic religious leaders in Iran greatly influence political decision making.

  • Economic Environment: Liberalization, Privatization, and Globalization

    Economic Environment: Liberalization, Privatization, and Globalization

    What is Economic Environment? The totality of economic factors, such as employment, income, inflation, interest rates, productivity, and wealth, that influence the buying behavior of consumers and institutions. This article we have a discussion on Economic Environment and their parts; liberalization, privatization, and globalization. Economic environment refers to all those economic factors which have a bearing on the functioning of a business unit.

    Economic Environment discusses the questions of What do liberalization, privatization, and globalization of the Indian Economy mean? Better Explanation.

    Business depends on the economic environment for all the need inputs. It also depends on the economic environment to sell finished goods. Naturally, the dependence of business on the economic environment is total and it is not surprising because, as it rightly says, business is one unit of the total economy.

    Define Economic Environment in India?

    To solve the economic problems of our country, the government took several steps including control by the State of certain industries, central planning and reduced importance of the private sector. Besides people, markets require purchasing power and that depends upon current income, savings, prices, debt and credit facilities, etc. The economic environment affects the demand structure of any industry or product. The following factors should always keep in mind by the business people to determine the success of the business.

    • Per capita income.
    • Gross national product.
    • Fiscal and monitory policies.
    • The ratio of interest charged by different financial institutions.
    • Industry life cycle and current phase, and.
    • Trends of inflation or deflation.

    Each of the above factors can pose an opportunity as well as a threat to a firm. For example, in a developing economy, the low demand for the product is due to the low-income level of the people. In such a situation a firm or company can not generate the purchasing power of the people to generate the demand for the products. But it can develop a low priced product to suit the low-income market otherwise it will slip out from the market.

    Extra Things:

    Similarly, the industry gets several incentives and support from the government if it comes under the purview of the priority sector whereas some industries face a tough task if they are regarding as inessential ones. In the industry life cycle, timing is everything when it comes to making good cycle-sensitive decisions.

    The managers need to make appropriate cutbacks before the onslaught of recession because at that time sales are bound to decline which leads to increasing inventories and idle resources and that is a costly situation.

    On the other hand, business people cannot afford to get caught short during a period of rapid expansion. This is where accurate economic forecasts are a necessity and therefore, a manager must pay careful attention to the major economic changes.

    The main objectives of India’s development plan are:

    • Initiate rapid economic growth to raise the standard of living, reduce unemployment and poverty.
    • Become self-reliant and set up a strong industrial base with emphasis on heavy and basic industries.
    • Reduce inequalities of income and wealth.
    • Adopt a socialist pattern of development — based on equality and prevent exploitation of man by man.

    As a part of economic reforms, the Government of India announced a new industrial policy in July 1991.

    The broad features of this policy are as follows:
    • The Government reduced the number of industries under compulsory licensing to six.
    • Disinvestment was carrying out in the case of many public sector industrial enterprises.
    • Policy towards foreign capital was liberalizing. The share of foreign equity participation was increasing and in many activities, 100 percent Foreign Direct Investment (FDI) was permitted.
    • Automatic permission was now granting for technology agreements with foreign companies.
    • Foreign Investment Promotion Board (FIPB) was set up to promote and canalize foreign investment in India.

    Main Features of economic Reforms or New Economic Policy:

    They are three things liberalization, privatization, and globalization. The following features of the economics below are;

    Economic Environment Liberalization Privatization and Globalization
    Economic Environment: Liberalization, Privatization, and Globalization

    Liberalization:

    Liberalization of the economy means to free it from direct or physical controls impose by the government. Before 1991, the government had imposing several types of controls on the Indian economy, e.g., industrial licensing system; price control or financial control on goods, import license, foreign exchange control, restrictions on investment by big business houses, etc. these had to dampen the enthusiasm of the entrepreneurs to establish new industries.

    These controls had given rise to corruption, undue delays, and inefficiency. Economic reforms, therefore, made a bid to reduce restrictions impose on the economy. Also, Economic reforms were based on the assumption that market forces could guide the economy more effectively than government control.

    Measures Taken for Liberalization:

    Following measures have been taking under economic reforms for liberalization of Indian economy:

    Abolition of Industrial Licensing and Registration:

    The New Industrial Policy (NIP) is the first part of the liberalization measures. Under the NIP, industrial licensing has been greatly liberalizing. All industries, except a few specified ones, have been de-licensing under the NIP and liberated from the clutches of control in a bid to eliminate the obstacles to industrial growth. De-licensing of passenger car industry, bulk drugs industry, consumer electronics industry, etc. became landmarks and several new players entered these industries.

    Industries for which licenses are still necessary are:

    • Liquor.
    • Cigarette.
    • Defense equipment.
    • Industrial Explosives.
    • Dangerous Chemicals, and.
    • Drugs.

    Small Scale Industry (SSI) de-reservation, however, has not made much progress.

    The concession from the Monopolies Act:

    According to the provisions of Monopolies and Restrictive Trade Practices Act (MRTP Act) all those companies having assets worth more than 100 crores used to declare MRTP firms and were subject to several restrictions. Now the concept of MRTP has been done away with. These firms are now no longer require to obtain prior approval of the government, at the time of making investment decisions.

    Freedom for Expansion and Production to Industries:

    As a result of the liberalization policy, industries have been giving the following freedom:

    • Before liberalization under the provisions of old policy at the time of granting the license, the government used to fix the maximum limit of production capacity. No industry could produce beyond this limit. Now, this limit has been removing.
    • Producers are now free to produce anything based on demand in the market. Previously, only those goods could produce which were mentioning in the license.
    Increase in the Investment Limit of the Small Industries:

    The investment limit of the small industries has been raising to Rs. 1 crore to enable them to introduce modernization. Investment limit of tiny industries has also been increased to Rs. 25 lakh.

    Freedom to import Capital Goods:

    Under the policy of liberalization. Indian industries will be free to buy machines and raw materials from abroad to expand and modernize themselves.

    Privatization:

    In the context of economic reforms, privatization means allowing the private sector to set up more and more of such industries as were previously reserved for the public sector. Under it, an existing enterprise of the public sector is either wholly or partially sell to the private sector.

    Measures adopted for Privatization:

    Following measures were adopted in respect of privatization under economic reforms:

    Contraction of the Public Sector:

    Initially, in the economic development of India, the public sector was according to prime importance. As observed by Dr. Manmohan Singh, priority was given to the public sector in the hope that it would help capital accumulation, industrialization, development, and removal of poverty. But none of these objectives could realize. The policy of contraction of the public sector was, therefore, adopt under the new economic reforms.

    The number of industries exclusively reserved for the public sector was reduced from 17 to 4. The Government has been divesting its stake in public sector undertakings in the light of the redefinition of its role from being a provider of goods and services to that of a policy-maker and facilitator. Between 1991-2002 the Government has privatized assets worth US$ 6.3 billion.

    Note: At present, the Government is considering disinvestment of the Shipping Corporation of India, State Trading Corporation, Minerals and Metals Trading Corporation, among others. One of the biggest privatization programs that the Government has initiated is the leasing of international airports at the four metropolitan cities of Delhi, Mumbai, Chennai, and Kolkata.

    Globalization:

    It means integrating the economy of a country with the economies of other countries under conditions of freer flow of trade and capital and movement of persons across borders.

    “ Globalization may define as a process associated with increasing openness, growing economic interdependence and deepening economic integration in the world economy.”

    Main components of Globalization of the Indian economy are as under:

    Increase in Foreign Investment:

    Under economic reforms, the limit of foreign capital investment has been growing from 40 percent to 51 percent. In 47 high priority industries foreign direct investment to the extent of 51 percent will allow without any restriction and red-tapism. Also, Export trading houses will allow foreign capital investment up to 51 percent. In this regard, the Foreign Exchange Management Act (FEMA) will enforce.

    Devaluation:

    To promote exports under the policy of globalization, the Indian rupee was devaluing. In July 1991, the rupee was devaluing to the extent of 20 percent on average. The objective was an export promotion, import substitution and attraction of foreign capital.

    Reduction in tariffs:

    To render the Indian economy beneficial internationally, custom duties and tariff impose on imports and exports are reducing gradually.

    Export Promotion:

    Several measures have been taking to meet the deficit of the balance of payments. Exports have been promoting. Special facilities like the abolition of export duties, cheaper export credit and cuts in import duty have been providing to the exports to increase the share of Indian exports in world trade. The government also enhance the duty drawback in respect of a large number of items. The greater flow of bank finance to the export sector at a concessional rate also enhances the competitiveness of exports.

    The rupee made Convertible:

    The government brought in partial convertibility of the rupee in 1992-93 and full convertibility on the trading account in 1993-94. The move supported the intention to give the exchange rate mechanism its due role in regulating the trade flow. It also serves to encourage exports.

  • What is Strategic Management? Meaning and Definition

    What is Strategic Management? Meaning and Definition

    What is Strategic Management? Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes. Strategic management can also define as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance.

    Here explains read and learn; What is Strategic Management? Meaning and Definition.

    Strategic management provides overall direction to the enterprise and involves specifying the organization’s objectives, developing policies and plans designed to achieve these objectives, and then allocating resources to implement the plans. Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision making in the context of complex environments and competitive dynamics. Strategic management is not static; the models often include a feedback loop to monitor execution and inform the next round of planning.

    Michael Porter identifies three principles underlying strategy: creating a “unique and valuable market position”, making trade-offs by choosing “what not to do”, and creating “fit” by aligning company activities with one another to support the chosen strategy. Dr. Vladimir Kvint defines strategy as “a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully.”

    The corporate strategy involves answering a key question from a portfolio perspective: “What business should we be in?” Business strategy involves answering the question: “How shall we compete in this business?” In management theory and practice, a further distinction is often made between strategic management and operational management. Operational management is concerned primarily with improving efficiency and controlling costs within the boundaries set by the organization’s strategy.

    Definition of Strategic Management:

    Strategic management involves the formulation and implementation of the major goals and initiatives taken by a company’s top management on behalf of owners, based on consideration of resources and an assessment of the internal and external environments in which the organization competes.

    The strategy is defined as;

    “The determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.”

    Strategies are established to set direction, focus effort, define or clarify the organization, and provide consistency or guidance in response to the environment. As well as, Strategic management involves the related concepts of strategic planning and strategic thinking. It is analytical and refers to formalized procedures to produce the data and analyses used as inputs for strategic thinking; which synthesizes the data resulting in the strategy. Strategic planning may also refer to control mechanisms used to implement the strategy once it determines.

    In other words, strategic planning happens around strategic thinking or strategy making activity. Strategic management often describes as involving two major processes: formulation and implementation of a strategy. While described sequentially below, in practice the two processes are iterative and each provides input for the other. Also, Strategic Management is all about identification and description of the strategies; that managers can carry to achieve better performance and a competitive advantage for their organization. An organization is said to have a competitive advantage if its profitability is higher than the average profitability of all companies in its industry.

    Explanation;

    The manager must have a thorough knowledge and analysis of the general and competitive organizational environment to make the right decisions. They should conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats), i.e., they should make the best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats.

    Strategic management is nothing but planning for both predictable as well as unfeasible contingencies. It applies to both small as well as large organizations as even the smallest organization faces competition; and, by formulating and implementing appropriate strategies; they can attain sustainable competitive advantage.

    It is a way in which strategists set the objectives and proceed about attaining them. It deals with making and implementing decisions about the future direction of an organization. They help us to identify the direction in which an organization is moving.

    Strategic management is a continuous process that evaluates and controls the business and the industries in which an organization involve; evaluates its competitors and sets goals and strategies to meet all existing and potential competitors; and then reevaluates strategies regularly to determine how it has been implemented and whether it was successful or does it needs replacement.

    Strategic Management
    What is Strategic Management? Meaning and Definition.

    More things;

    Strategic Management gives a broader perspective to the employees of an organization; and, they can better understand how their job fits into the entire organizational plan; how it co-relate to other organizational members. It is nothing but the art of managing employees in a manner that maximizes the ability to achieve business objectives. The employees become more trustworthy, more committed and satisfied; as they can co-relate themselves very well with each organizational task.

    They can understand the reaction of environmental changes in the organization; and, the probable response of the organization with the help of strategic management. Thus the employees can judge the impact of such changes on their job and can effectively face the changes. Also, the managers and employees must appropriately do appropriate things. They need to be both effective as well as efficient.

  • Strategy

    Strategy

    What is Strategy?

    A method or plan has chosen to bring about the desired future, such as achievement of a goal or solution to a problem.

    The art and science of planning and marshaling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army. See also tactics.

    A strategy is a high-level plan to achieve one or more goals under conditions of uncertainty. In the sense of the “art of the general”, which included several subsets of skills including “tactics”, siege craft, logistics etc., the term came into use in the 6th century C.E. in East Roman terminology and was translated into Western vernacular languages only in the 18th century. From then until the 20th century, the word “strategy” came to denote “a comprehensive way to try to pursue political ends, including the threat or actual use of force, in a dialectic of wills” in a military conflict, in which both adversaries interact.

    Companies now face increasingly turbulent, complex and threatening environments. In the past, they could succeed by focusing virtually all management efforts on running their day to day affairs as efficiently as possible. Although such focusing is still important, adapting the firms to changing environmental conditions have become an essential gradient for success.

    The strategic management perspective highlights the significance of devoting more attention to analyzing environments and formulating strategies that relate directly to environmental changes. The ultimate purpose of strategic management is to help the organization increase its performance through increased effectiveness, efficiency, and flexibility.

    A strategy is a way of doing something. It usually includes the formulation of an objective and a set of action plans for the accomplishment of the objective.

    Strategic management may be understood as the process of formulating, implementing and evaluating business strategies to achieve organizational objectives. It is a set of managerial decisions and actions that determine the long-term performance of a corporation. It involves environmental scanning, strategy formulation, strategy implementation, evaluation, and control.

    The study of strategic management emphasizes on monitoring and evaluating environmental opportunities and threats in the light of corporation’s strengths and weaknesses.

    Step 01: Analyze opportunities and threats or constraints that exist in the external environment.

    Step 02: Formulate strategies that will match the organization’s strengths and weaknesses with opportunities and threats or constraints that exist in the external environment.

    Step 03: Implement the strategies.

    Step 04: Evaluate and control activities to ensure that organizations objectives are achieved.

    It is important because the resources available to achieve these goals are usually limited. Generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). This is generally tasked with determining strategy. The strategy can be intended or can emerge as a pattern of activity as the organization adapts to its environment or competes. It involves activities such as strategic planning and strategic thinking.

    Henry Mintzberg from McGill University defined strategy as a pattern in a stream of decisions to contrast with a view of strategy as planning, while Max McKeown (2011) argues that “strategy is about shaping the future” and is the human attempt to get to “desirable ends with available means.” Dr. Vladimir Kvint defines strategy as “a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully.”

    Many Definitions of Strategy

    In 1988, Henry Mintzberg described the many different definitions and perspectives on strategy reflected in both academic research and in practice. He examined the strategic process and concluded it was much more fluid and unpredictable than people had thought. Because of this, he could not point to one process that could be called strategic planning. Instead, Mintzberg concludes that there are five types of strategies:

    As plan: A directed course of action to achieve an intended set of goals; similar to the strategic planning concept.

    As pattern: A consistent pattern of past behavior, with a strategy realized over time rather than planned or intended. Where the realized pattern was different from the intent, he referred to the strategy as emergent.

    As position: Locating brands, products, or companies within the market, based on the conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors outside the firm.

    As ploy: A specific maneuver intended to outwit a competitor; and

    As perspective: Executing strategy based on a “theory of the business” or natural extension of the mindset or ideological perspective of the organization.

    In 1998, Mintzberg developed these five types of management strategy into 10 “schools of thought” and grouped them into three categories. The first group is normative. It consists of the schools of informal design and conception, the formal planning, and analytical positioning. The second group, consisting of six schools, is more concerned with how strategic management is actually done, rather than prescribing optimal plans or positions. The six schools are entrepreneurial, visionary, cognitive, learning/adaptive/emergent, negotiation, corporate culture and business environment. The third and final group consists of one school, the configuration or transformation school, a hybrid of the other schools organized into stages, organizational life cycles, or “episodes”.

    Michael Porter defined strategy in 1980 as the “Broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals” and the “Combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there.” He continued that: “The essence of formulating the competitive strategy is relating a company to its environment.”