The mode of life in any region is not an accident, but the result of environment. The word is true for the business, also. The mode of business the policies and strategies of business, the performance and success of business depend largely on the environment of the business.
Environment is the circumstances or conditions by which one is surrounded; the complex of physical, chemical, and biotic factors such as climate, soil and living things, that act upon an organism or ecological community and ultimately determine its from and survival, or the aggregate of social and cultural condition that influence the life of an individual or community.
The business environment including all the customers and persons, institutions, regulating agencies, cooperators external to the business cannot operate in a vacuum. Business is a member of the society and is an association of the members of the society. Business supported of the supported by the society. So the aggregate of customers other business firms, the government the total society and also the international community the business environment and ecology are very impotent to the business.
The economic, political social and cultural conditions of any society or country determine the mode and success of business. The socio economic progress and condition, the cultural pattern; the prevailing economic system; the philosophy policy and strategy of the government; the religious and ethical position, the technological, political, and legal situations etc. affect the business operation and business progress in a country. Business should and must obey the environment and should not harm the environment.
Role of the Government in Business Arena
Government is the supreme authority of any nation. As the representation of the public , government regulates the social and business organization to attain national objective. Business operation and development is achieved within the framework of government policies and regulation. In short, every aspect of business is under government influence. “Although in America we have what is described as a free enterprise economic, our government today regular, more business practical than most other democracies- chairman Citicorp. as cited in the quotation, ever in the in the USA. The leader of free market economic, government controls as business aspects.
Government controls the business to protect the public interest as the guardian of the public or consumers, supports the business to develop those as a property or organization, regulates those to give proper direction with long term goals and planned vision. Agencies of the government are established from the grassroots level to the center. Government’s policies affect the business activities like acquiring finance to invest, procuring goods and services, producing goods and services, and selling those. Government’s Roles are usually:
- Regulatory role: Government regulatory the business operation through tax laws . Income tax, Sales tax, value Added tax. Customer tax, Excise tax, Import and Export tax, etc., are regulatory measures of the government.
- Customer-patterned: Government is an important buyer of the business products. Government has different departments and organization. Government buys product for the departments. Thus Government. is an impotent buyer.
- Patronizing role: Government is a patron of the business. Government Provides funds to the business and buys product for its uses in the departments and to public for relief and assistances. In Bangladesh government organization like Bangladesh Shiplap Bank and Bangladesh Shiplap Bank Rin Sangstha provides long funds for industrial investments . Governments purchases rice and whets in the harvesting seasons and distributes those as cheap-price corals to the public in crisis of the goods. as Food for Work or controlled price goods, or on open marker sale.
- Direction-Oriented role: Government policies provide direction to the business. Act (1994, Bank Computer ACT (1991), Fiscal policy, Export and Import policy, Industrial policy,. etc. Provides direction toward which business directs their activities.