Economic Environment and Policies

You may have a variety of reasons for studying this course, but the main reason, we presume, is to become a successful manager to execute engineering projects. Your success or failure as a manager depends on a number of factors and these factors may not be always within your control, very often such factors constitute your work environment. They include your job, your department, you organisation, your nation and the world around you. After all as a manager you do not function in a vacuum. You exist and operate within, and not without, an environment. Therefore, as a manager when you think, or take decisions, you cannot neglect the limitations of your environment. Just think for a while and then answer : Do you not arrive at all your decisions and contemplate actions thereupon after examining the possible reactions from the environment where you are placed ? Say, as a marketing manager, would you not study your market environment before launching a new product ? Or as a finance manager, would you not study the organisation and structure of your country's money and capital market before deciding on the sources and uses of your funds  Or as a personnel manager, would you not care to find out the rules and regulations laid down by your government on subjects like 'reservation' before undertaking recruitment and selection of your required staff ? When you have answered these questions, you will discover that all your answers are in the affirmative : "Yes, I would". You cannot do without thinking about environment. As a business manager, you have to constantly evaluate your business environment. This unit aims at setting you thinking  about these ideas. 

Objectives 

After studying this unit, you should be able to 

• define what you mean by 'environment', 
• classify your business environment on the basis of various criteria, 
• classify the complex environmental variable on the basis of some objective criteria, 
• identify the critical elements of eco~lomic  environment of business, 
• aualyse the interactions between economic and non-economic environment, 
• establish the nature of interaction between economic environment and business management, 
• explain the impact of environment on business management, and 
• illustrate your understanding of economic environment with reference to the Indian business situation.