Business Entrepreneurship · Classes 9-10 · Chapter 1
Business Environment.
When hartals keep coming, a shop cannot stay open. When a river and fertile land lie close by, an agro factory is easy to set up. A business never stands alone: its surroundings push it down or lift it up. Split those surroundings and you get six rooms, and the real skill is knowing which element sits in which room.
1. Environment and business environment
Environment is the combination of all the elements that influence the lifestyle and economic activities of the people of a region. It shapes our way of life, behaviour, learning, culture and economy, and business too.
The part that touches business is the business environment: the combination of all the natural and artificial elements that directly or indirectly influence the formation of a business organization, its activities, and its development or deterioration. That is why the growth of business in any place depends on its business environment.
definitionsthink, then flip
Definition cards
QuestionWhat is environment?
AnswerThe combination of all elements influencing the lifestyle and economic activities of a region.
QuestionWhat is business environment?
AnswerThe combination of natural and artificial elements that directly or indirectly influence a business organization's formation, activities and development or deterioration.
QuestionWhat does business development depend on?
AnswerThe business environment.
2. Six environments, twenty-eight elements
The elements of the business environment fall into six main categories: natural, economic, political, social, legal and technological (technical) environment. The book's chart has six boxes, each with a few elements under it. Open the branches and look.
six environmentsopen a branch
Business environment
Business environment
Natural
Climate
Landscape
Natural resources
Rivers
Economic
Savings and investment
Capital
Money and banking
Political
Government
Sovereignty
Law and discipline
Political stability
Government policy
International relation
Social
Nation
Religious belief
Consumers' perception
Human resources
Education and culture
History (tradition)
Legal
Commercial law
Industrial law
Environment protection law
Consumer protection law
Technological
Technology learning
Technical efficiency
Technology based institution
Opportunity of importing technology
Information and communication technology
You can find the room by questions, not by learning 28 names. Pick an element and answer. Start with law and discipline, or government policy: that is where the traps are.
a key to the environmentsyes or no
Which environment?
You have opened the boxes. Now go the other way: take one element and say which room it belongs to. Tap any of the twenty-eight and the answer appears below. Once all six environments have shown up, check the count.
which environment?recall the chart's six columns
Which environment does the element belong to?
Natural environment. In the book's chart, climate, landscape, natural resources and rivers sit under it.
Economic environment. In the book's chart, savings and investment, capital, and money and banking sit under it.
Political environment. In the book's chart, government, sovereignty, law and discipline, political stability, government policy and international relation sit under it. Government policy is political, not legal.
Social environment. In the book's chart, nation, religious belief, consumers' perception, human resources, education and culture, and history (tradition) sit under it.
Legal environment. In the book's chart, commercial law, industrial law, environment protection law and consumer protection law sit under it.
Technological environment. In the book's chart, technology learning, technical efficiency, technology based institution, opportunity of importing technology, and information and communication technology sit under it.
All six environments seen. The count: natural 4, economic 3, political 6, social 6, legal 4, technological 5, twenty-eight in all.
The six environments act on one business at once. Turn them one by one and see how far it grows or breaks.
pulled from six sidesturn an environment
Development or deterioration?
The business is imaginary; the storeys are not a measure, they only show the idea.
3. Reading a situation, naming the environment
Memorised names are not enough in an exam: you read a situation and say which element is at work. Sort the six imaginary situations below into the six boxes.
spot the environmentwhich element is at work?
From situation to environment (imaginary)
Pick up a situation, then drop it in a box. Ask: which element of the chart is at work here?
Right. Next one.
Not yet. Name the element first, then find its column in the chart.
All in place. Rivers and land are natural. A bank loan is money and banking, so economic. Hartals touch political stability, so political. Consumers' perception is social. Consumer law is legal. Technical efficiency is technological.
Four pairs get mixed up most, and in every pair the two sides sit in different environments. Government policy is political, consumer law is legal. Law and discipline is political, environment protection law is legal. Technical efficiency is technological, human resources are social. Money and banking is economic, natural resources are natural. Drag the handle and check both sides.
do not mix up“law” in the name does not always mean legal
Pairs that get mixed up
4. Check yourself
Three questions in the exam's style. The first one.
check yourselfpick one answer
Question 1
What influences people's way of life, behaviour, education, culture, economy and business?
Right. Environment influences our life style, behaviour, learning, culture, economy and business.
'Politics' does not fit here. The book says: Environment influences our life style, behaviour, learning, culture, economy and business.
'Education' does not fit here. The book says: Environment influences our life style, behaviour, learning, culture, economy and business.
'Religion' does not fit here. The book says: Environment influences our life style, behaviour, learning, culture, economy and business.
Now the second.
check yourselfpick one answer
Question 2
The following are influenced by environment:
i. people's way of life ii. culture iii. economy
Statement iii is also true, but this option leaves it out. Environment influences our life style, behaviour, learning, culture, economy and business.
Statement ii is also true, but this option leaves it out. Environment influences our life style, behaviour, learning, culture, economy and business.
Statement i is also true, but this option leaves it out. Environment influences our life style, behaviour, learning, culture, economy and business.
Right. i is true: Environment influences people's life style (p.6). ii is true: Culture is also influenced (p.6). iii is true: The economy is also influenced (p.6).
Read the last one slowly.
check yourselfpick one answer
Question 3
The government sends some policies for running banks to the central bank. Which environment of business do these policies belong to?
Technological environment: technology learning, technical efficiency, importing technology, ICT. The correct answer is Political environment.
Social environment: nation, religious belief, consumers' perception, human resources, education and culture, history. The correct answer is Political environment.
Right. Political environment: government, sovereignty, law and discipline, political stability, government policy, international relation.
Legal environment: commercial, industrial, environment protection and consumer law. The correct answer is Political environment.
The whole note on eight cards.
cut from the notetap to turn over
Eight cards
QuestionWhat is environment?
AnswerThe combination of all the elements influencing the lifestyle and economic activities of the people of a region.
QuestionWhat is business environment?
AnswerThe combination of all natural and artificial elements directly or indirectly influencing the formation, activities and development or deterioration of a business organization.
QuestionOn what does the development of the business condition of a place depend?
AnswerOn the business environment.
QuestionInto how many main categories are the elements of business environment divided?
AnswerSix: natural, economic, political, social, legal and technological.
QuestionTradition (history) and consumers' perception are elements of which business environment?
AnswerSocial environment.
QuestionGovernment and government policy are elements of which business environment?
AnswerPolitical environment.
QuestionGovernment policy and consumer law: which is political and which is legal?
AnswerGovernment policy is political; consumer law is legal.
QuestionTechnical efficiency and technology learning are elements of which business environment?
AnswerTechnological environment.
Source: Business Entrepreneurship, Classes 9-10 (NCTB), Chapter 1 “Introduction to Business”, the “Business Environment” part.