Elements of economic environment

Economics environment refers all economics surroundings that influence organization activities.It consists of economic parameters.It is concerned with the nature and direction of economy in which the organizations
operate.
Important elements of economic development are :

1. Economic systems :Economic system determines the scope of private sec tore ownership of the factors of production and market forces.The model of economic system are:

• A) -Free market economic :This system is based on private ownership of the factors of production. Profit serves as the driver of economic engine.The competitive market mechanism guides business decisions.There is freedom of choice.Individual initiative is encouraged.

• B) -Centrally planned economy :This system is based on police ownership of the factors of production.The economy is centrally planned.Controlled and regulated by the government.There is no consumer sovereignty.Police enterprises play a dominant role.

C) -Mixed economy :This system is a mix of free market and centrally planned economics.Both public and private sectors coexist.The public sector ha ownership and control of basic industries including utilities.The sector owns agriculture and other industries but is regulated by the state.

2. Economic policies :Policies are guidelines for decision making and action.Economic policies of the government significantly influence and guide organizations.

Key economic policies influencing organization are :
A) Monetary policy-It is concerned with money supply,inflation rates,interest rates and credit availability.It influences the level of spending through interest rates.Cheap money reduces cost,dear money increase cost.Interest rates cost of capital.Foreign exchange rates affect imports and exports.

B)Fiscal policy :It is concerned with the use of taxation and government expenditure to regulate economic activity.Tax on income,expenditure and capital influence business decisions.

C)Industrial policy :It is concerned with industrial licencing location,incentives,facilities,foreign investment,technology transfer and nationalization.

3.Economic conditions :They indicate the health of the economy in which the organization operate.The factors affecting economic conditions are :

• State of economic development :An economy can be least developed developing and developed.Organizational activities are influence by the stage of economic development.
• Income :The level of employment affect expenditure,saving and investment.They together influence the economic conditions of organization.
• Employment:The level of employment affects organization.It determines availability and of labour.
• Business cycle :The stages of business cycle can prosperity,rescission and recovery .They affects the health organization.
• Influence :It is rise in price level.influences costs,price and profit of organization.

4. Regional economic groups :They promote cooperation and free trade among members by removing tariff and other restrictions.They provide opportunities to member countries and threats to non-member counties.Example are:

• SA ARC :South Asian Association for Regional Cooperation.
• ASIAN :Association of South East Asian Nations.
• EU :European Union.
  

Role of human resource in development

Human resource is an important factors of economic development.As opined by Adam Smith the prosperity of a country is determined by the skill,efficiency and attitude of the labour used by that country.Many countries have been able to develop themselves due to the will,capacity and skill of their human resources.As for example,the countries like Japan,Singapore,Germany,and Hon Kong have been able to achieve economic miracle by mobilising their human resource.

1. Utilisation of natural resources :The natural resources like mineral,water,oil and forest are utilized by the human resource.The utilisation of natural resources increase the national income.The per capital income and living standards of the people increase.The dearth of proper human resource is one of the causes of non-utilisation of natural resources in world.
2. Compensate the deficiency of natural resources :The utilisation of human resource compensates the deficiency of natural resources.Many countries poor in natural resources have been able to achieve high economic and human development on the basis of the human resources.
3. Utilisation of physical capital :The more existence of physical capital is on guaranteed of development.They should be property utilised.They are utilised by human resource.Human resources is essential to operate machinery and equipment and to run factories and industry.
4. Increase production :The skilled,educated and healthy human resources increase the productivity and production.The production may be done even by the use of unskilled and semiskilled manpower .But the production of goods quality and variety of goods need skilled manpower.
5. Reform in tradition cultural and attitude :The traditional culture,values,intestines and attitude have been inimical to the development of developing countries including world.The educated manpower reforms the traditional cultural and attitude .
6. Increase in managerial capacity and entrepreneurship :Human resources increase the managerial capacity and entrepreneurship.It leads to innovation.The new production technique,new market and new technology are developed.This increase the production and national income.
7. Development of agriculture and industry :The modern and superior technologies should be use for the modernisation of agriculture and rapid industrialisation's.This is made possible only by human resource.Theodore Schultz observes "It is simply not possible to have the fruits of a modern agriculture and the abundance of modern industry without making large investment in human being.
8. Remove economic background :Human resource helps directly to remove the economic backwardness.It increase labour efficiently and specialisation.It increase labour mobility from which the executing resources can be made more productivity.The development of human resources increase the knowledge of natural resources.New production technique,market and opportunities of economic activities.The human resource also help in the proper utilisation of imported capital.These all lead to the increase in production,employment opportunities and levels of living of people.
   

Concept of human resources

In ordinary sense,human resources means simply the pollution of a country.But only the healthy,educated and skilled manpower is known as human capital or human resource.In the words of F.H. Harbinson "Human capital or human resources refers to the process of acquiring and increasing the number of persons who have skills,education and experience which are critical for the economic and the political development of a country."
According to National Planing Commission -"Human resource is the knowledge,skills,efficiency and physical and mental capacity to do work inherent in the people of the country."Human resource is a means of human development and also an aspect of human development.
Human resource has an important role to play in economic development.Mere pollution is not enough for rapid economic development.The pollution should be skilled educated and healthy.The availability of skilled manpower increase the productivity.Besides it also contributes in equality and justice.As stated in the economic survey of Fiscal year 2000 -"Healthy,skilled and educated population is the precondition of economic development."

Problems of natural resources management and remedial measures

The major problems of natural resources management and remedial measure are as follows :

1. Absence of property rights :The absence of well-defined property right to a resources almost inevitably result in its degradation.The lack of property rights result in overgrazing,soil degradation,and over fishing.There should be property rights in the consumption of natural resources.The property rights create incentives for the people to use the resources in a sustainable way.Large-scale land redistribution provides each household a sufficiently large entitlement to the resources to ensure a viable future.
2. Lack of legal provision :Lack of adequate legal provisions cause too much pollution.In urban areas, the general public is compelled to consume polluted air due to vehicle owners.It is having negative effects on health.Hence,personal vehicle may be discouraged by economic and legal policies or the general people may be compensated.
3. Absence of resources management plan :Due to the importance given to intensive agriculture and mono-cropping system in past,the fertility of land is decreasing.It is also affecting bio-diversity.Hence,there should be proper land use plan or there should be proper resources management plan.
4. Use of traditional skill and technology :The use of the traditional skill,knowledge and technology leads to the too much use of natural resources.Hence,the traditional skill,knowledge and technology should be modified.The growing use of science and technology has changed the consumption pattern.The society is becoming consumption oriented.Hence,the emphasis should be placed on the technology using less resources and routinising and recycling technology.
5. Widespread property :The basic challenge of resource preservation is the widespread property and unfulfilled needs of the people.This leads to the overuse of resources.Hence,the programs should be people-based.There should be increasing people's participation in resources management.
6. Lack on consistency between the economics,social and natural human resources :The economic,social and natural and human resources are interrelated.Hence,efforts should be made to bring consistency between them.The technique minimising adverse effects on environment should be adopted in formulation and environment should be taken as inseparable and interdependent components.
7. lack of typing environmental plan and management :There is interrelationship between environment and human being.Hence,different activities and developmental efforts should be carried forward by maintaining environmental balance.For this,environment plan and management should be tied together in the very initial phase of development plan.
8. Rapid pollution growth :Rapid pollution growth directly contributes to environmental degradation.Pollution growth may break down social norms that support efficient resources manage mental degradation.Hence,attempt has to made to control pollution growth.
9. Lack of access to credit markets leads to environmental degradation.The organised credit markets for rural household should be established.This may change the behavior of households that contribute to environmental degradation.The access to credit markets will induce them to change their behavior.Credit markets will allow them to smooth their consumption over time.
   

Consequences of environment mismanagement

The environment mismanagement has serious effects on human and productivity.The evil effects of environment negligence are as follows :

1. Deforestation :There is following deforestation in LDCs.The deforestation creates.Landslide ,floods and increase disease and mortality rate.Similarly,it increase soil-erosion,reduces watershed reserve,changes climate and destroy natural habit.Due to deforestation many species of birds and animals have been extinct.Deforestation can upset the ecological function ,which forest perform.
2. Soil degradation :The environmental negligence leads to soil degradation and reduction of productivity.It reduces the quality of agriculture land.The sol degradation reduces the yields of crops.Due to this the total production of main crops are decreasing these days.
3. Water pollution and water scarcity :Water pollution harms human health and lowers production.There is frequent occurrence of underground water leading to water scarcity.This causes water scarcity for drinking,bathing,irrigation and industrial use.
4. Air pollution :The use of energy,smoke for vehicle and industries are causing air pollution.This is creating breathing related diseases such as hypertension,high blood pressure.
5. Loss of bio-diversity :The environmental degradation reduces bio-diversity.It reduces the adaptability of Eco-system and loss of genetic resources.There is ecosystem overload,which means a state in which natural processes cannot recycle all the waste substance dumped into the environment.It results into the build up of wast.Hence,if unchecked,it leads to ultimate distribution of the environment and its capacity to sustain life.
6. Atmospheric change :There is ozone depletion which causes different disease related to air.There is increase in global warming.The forest,agriculture and ecosystem are affected by atmospheres change.
7. Loss of amenities :The environmental degradation reduces the value natural in respect of its amenities.These are the facilities that nature provides in various forms for sports,recreation and for spiritual advancement.
8. Health hazard :The environment degradation adversely affects human health.Air,water,noise pollution along with atmospheric changes cause many fatal diseases and premature deaths.The loss of biodiversity cause a big potential loss of new drugs .
   

Need for natural resources management

Environment quality is often seen a luxury goods something only wealthy can afford.But environment is largely a necessity for people for developing countries.These people are much These are much dependent on natural resources that people in industrial countries.many ecosystem functions and services are indispensable.Ecosystems provide water,animal and plant food,and other renewable resources.They also recycle nutrients,control foods,filter pollutants,assimilate waste,pollinate crops,maintain a genetic library,preserve and regenerate soil,operate the hydrological cycle,and maintain the gaseous composition of the atmosphere.The world's ecosystem represents a large part of natural capital base,which may also be called environment resource base.The services are essential for our survival.Hence ,the environmental resources based should be monitored in much the same way that we monitor the manufactured capital stocks,such as roads,building,and machinery.
Degradation of the environmental resources base is caused by excessive resources extraction,intensive land use,and so on.This degradation not only affects the quantity and quality of the services produced by ecosystem,it also challenges their resilience."An ecosystem resilience is its capacity to absorb disturbance without undergoing fundamental changes".If a system loses its resilience,even a small perturbation can change into a wholly new state.Thus,the economist,assumption that there are limitless substation possibilities among resources is country to ecological truth.
"An ecosystem's carrying capacity is the maximum stress that it can absorb without changing to a vastly different state".Ecosystems are subject to natural shocks like fires,floods,storms,and so on.Thus,ecosystem is not a fixed stock of capital and cannot provide humans with a steady flow of resources.Biological diversity,or biodiversity,plays two central roles in the evaluation of ecosystems.First,it provide the units through which energy an dematerialise flow,giving the system with resilience.The environmental resources that in regenerative,i.e.,renewable,are in danger of exhaustion from excessive use.Such renewable natural resources are earth's atmosphere ;animal,bird,plant,and fish population,Land and even underground water basins etc.These resources degrade due to pollution and wrong and excessive use.Environmental resources such as forests,the atmosphere,and seas have multiple competing uses.This accentuates management problem.

Concept of natural resource management

Natural resource consist of all that is given by natural on,above and under the surface of the earth.These resources exits in natural world.Man uses them their knowledge and labour.According to United Nations Study,"A natural resources is anything found by man in his natural environment that he may in some way utilize for his own benefit."In this broad sense,the resources provide by natural include :

• The rocks and which are contained mineral-ores,the resources such as oil,coil,gas.
• The soils,which nourish the planets,as well as plant and animal life.
• The elements of the landscape,which provides site for building,roads,railways and other structures.
• Surface and underground waters which are indispensable to human,animals and planet life.Water also provides sources of energy through hydro electricity power.
• The air and everything that constituted the atmosphere,which is essential to life.

The environment is the sum total of the natural resources.These are like the capital that man uses for the production of goods,which he consumes.The environmental also supplies amenities of virus types,which given pleasure.The environment is,thus,many things provided by natural.All these are the basis of man's life.Webster's new word dictionary defines environment as "the conditions,circumstances,and influences surrounding and affecting the development of an organism or group of organisms."Here,organism is primarily human being.The group of other organisms is generally a group of human beings.The group of other organism is called ecological systems or ecosystem.These systems profoundly affect human well-being.
However this environment has been much damaged by the activities of man.The widespread environment degradation has created various problem much as air pollution,water pollution,water scarcity,atmospheres changes,hazordon wastes,soil degradation,defecation and loss of biodiversity.This shows the need of natural resources management,which implies both use,and preservation of the natural resources.
Since,1980 the growing concern for environment has given birth to the concept of sustainable development.The term 'sustainable development' was brought into common use by the world commission on environment and development in its 1987 report in titled 'our common future'.This report defines sustainable development as 'meeting the needs of the present generation without compromising the needs of the future generations.'The concept of sustainable resources management embraces the principle of the carrying capacity of Eco-system .The nature can recreate the resources consumed by human being according to natural life cycle.Similarly,the nature can aboard the wast remained after human consumption.