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Natural Environment Dr. Shivakumar S*
UNIT-3
NATURAL ENVIRONMENT
NATURE OF PHYSICAL ENVIRONMENT
Equally significant, but sadly ignored, are factors like climate,
minerals, soil, landform, rivers and oceans, coastlines, natural resource
and flora and fauna which have considerable influence on the
functioning of a business.
These and other related factors constitute natural
environment or hysical environment, a discussion of which is highly
relevant in a book on the environment of business.
!any disute the validity of the statement that natural
environment does e"ert significant influence on business activities.
They have reasons to do so. !an#s ingenuity, over the years, has
enabled him to be almost indeendent of Nature. $limate, once
considered as a decisive factor in lant location, has receded in
significance as man has acquired technology for creating artificial
climate. %neven landform, rivers, oceans, forests and deserts have not
restrained him from laying roads and constructing factories, as he now
knows how to bulldo&e land, dig tunnels, fell trees and construct
bridges. 'nfertile soil and erosion of soil no more handica him from
undertaking agricultural ractices as he knows the reservation and
treatment of soil. (ailure of rains may not worry him as much as it did
to his forebearers, as he knows how to um out ground water from
fathoms dee and divert water from rivers and streams for irrigating
cros. Schumacher#s famous dictum)Small is *eautiful)seems to have
no effect on today#s man. +is search for new areas of mineral deosits
and substitutes and new uses for resources under e"loitation have
given him courage and confidence to launch giant manufacturing lants,
consuming resources on an unrecedented scale. !ountains, deserts,
forests, oceans and distances are no barriers to him to reach any art
of the globe to sell his roducts. Thus, man#s technological rogress
during the last ,-. years has been so great, his insight into nature so
dee that his ingenuity has finally given him the whihand and that the
natural environment is something of secondary imortance, something
essentially assive, e"isting to serve him as he sees fit.
Physical envirn!en"# "h$%h si%ni&ican"# is sa'ly i%nre'(
't is this belief that has romted several universities and
rofessional bodies to dro the sub/ect of Economic 0eograhy from
their curricula. Natural environment hardly finds a mention in
literature on economic develoment or develoment lanning.
Sometime back, thousands of develoment economists from different
arts of the world met in New Delhi for the 1orld $ongress of the
'nternational Economic 2ssociation. The sub/ect of the $ongress was
the aroriate balance between industry and agriculture in economic
develoment. There were in all ,3 sessions at the $ongress. 4f these,
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Natural Environment Dr. Shivakumar S*
none was on the basis of resources develoment activity. $learly,
natural resources have not entered the agenda of analysis in
develoment economics and national lanning. 1e do not know of any
'ndian !asters syllabus in economics which contains resources
economics as a toic. 2nd this desite the fact that over the ast
decade and a half, there has grown a large body of work on both
analytical and alied resource economics ublished in books, economic
/ournals and in some half)a)do&en international /ournals secialising in
the economics of natural resources. Develoment economics, in general
and develoment lanning in articular, have with rare e"cetions
assed resource economics by, rather like shis in the night.
,
's this negligence /ustified: 7ut another way, has man learnt
to be comletely indeendent of Nature: +as he conquered Nature:
The answer to all these questions is a firm ;no#. Desite tremendous
advancement in science and technology, today#s man is not able to
control floods, droughts, earthquakes, storms, heat and cold waves,
volcanoes and of raidly silting reservoirs. Similarly, he has no answers
to such arado"es as the e"istence of beauty with ugliness and
overty with affluence. 't is ama&ing to him why eole of different
arts of the world talk differently, dress differently and adot
different cultures. (urther, modern man is not able to e"lain why we
are not able to roduce everything everywhere at the same cost, grow
every cro everywhere with ease and fish or mine in any lace of our
choice. The tsunami which hit several arts of 2sia 5including 'ndia6 on
December <3
th
<..= further demonstrates the suremacy of Nature.
Thus, modern man has not become comletely indeendent of
Nature. +is activities are directly or indirectly guided by his natural
or hysical environment. This is articularly true in the case of his
business activities.
IMPACT ON )USINESS
!anufacturing, which is one of the asects of business,
deends on hysical environment for inuts. Take, for instance, the
manufacture of a tractor. 2 tractor requires for its manufacture, iron
and steel, rubber, lastics, non)ferrous metals, labour of various skills,
factory machinery, materials, water and so on. 4f these, to take for
e"amle, steel, for its roduction requires iron, coal, furnaces, water,
labour, materials and so forth. The furnaces, in turn, require for their
manufacture, among many things, iron ore, brickworks and labour. 4ne
can thus break down any roduced good into inuts involved in its
manufacture and one can, if one has sufficient atience, trace them
ultimately to a combination of labour and natural resources.
Man$&ac"$rin% i!*ac"e' +y na"$ral envirn!en"(
't is temting to sto at this oint in the natural history of a
roduced commodity. *ut one should not. (or of course, labour too is a
roduced good. Even raw labour is roduced, manufactured by those
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Natural Environment Dr. Shivakumar S*
natural resources which sustain life, resources such as the multitude
of nutrients we consume, the air we breath and the water we drink.
<
*esides, much manufacturing is carried on in or very close to
areas of considerable oulation density rather than in sarsely
oulated regions far from ma/or markets and most of these more
heavily oulated areas were originally develoed because they were
favourable to other economic activities, more directly deendent uon
suitable conditions of the hysical environment. 2lso, although the
location of a articular industry or a articular lant may be the result
of the initiative of one man or a small grou of men, many tyes of
industries, esecially heavy, cannot be located too far from the source
of raw materials or from a lace to which raw materials can be
brought easily and ine"ensively.
>
!ining of coal and ores, drilling of oil, and the quarrying of
stone, clay or other materials are e"tractive industries, which deend
on the availability of minerals for which nature is the reository.
!inerals are scattered widely over the earth. E"loitation of mineral
resources, therefore, shows a attern of irregular design which is
characterised by small ockets of intensive activity and concentrated
oulation searated by large areas of little mineral activity and
comaratively sarse oulation. 't is generally believed that economic
roserity of a nation and the well)being of its eole deend on the
tye and the e"tent of mineral deosits the country is gifted with.
+owever, mere e"istence of deosits does not guarantee roserity.
1hat is required is e"loitation of the hysical resources for general
well)being. 4il)rich countries of today were merely sandy deserts
fifty years ago, desite the fact that the 2rabian countries were
gifted with rich deosits of oil. 4il is now umed out and is sulied
to the rest of the world. 'n the rocess, affluence of the 2rabs has
increased enormously. Though e"loitation fetches wealth,
indiscriminate e"traction is not advisable as most of the minerals are
not ine"haustible. 't is however heartening to note that all over the
world, continuous search is made for new area of deosits and new
substitutes for minerals under e"loitation.
Minin%# 'rillin% an' ,$arryin% are a&&ec"e' +y *hysical
envirn!en"(
4f all the economic activities of man, it is agriculture which
deends most on Nature. The term agriculture in its broadest sense
refers to all of man#s activities related to the cultivation of the soil
and to those activities that are directly deendent uon the soil, such
as the raising of livestock. The roduction of vegetable food and meat
made man less deendent uon the luck of the chase and therefore,
less sub/ect to eriods of famine following eriods of feast.
Nevertheless, the influence of nature uon agricultural activities was
great and has remained so to this day. The tyes of cros that can be
grown in an area deend first uon climate and soil and there is little
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Natural Environment Dr. Shivakumar S*
that man has ever been able to do against the vagaries of weather,
such as unseasonal frosts, une"ected droughts or eriods of suer)
abundant rainfall. Differences in the hysical background have
resulted in many tyes of agriculture throughout the world and the
number of tyes of agriculture has been further increased by varying
economic conditions.
=
A%ric$l"$ral *era"ins are si%ni&ican"ly in&l$ence' +y
na"$re(
Trade between two regions of a nation or between two nations
is the result of geograhical factors. *ecause of the natural factors,
certain areas are more suitable for roduction of certain goods.
2les and saffron, for e"amle, are grown in ?ashmir, coffee in
$oorg, tea in 2ssam, cotton in !aharashtra and /ute in 1est *engal.
4n the international level, instances of secialisation are lenty, but
one that should not be missed is the sueriority of Denmark which can
economically rovide eggs, butter and bacon. Secialisation of
roduction is the order of the day. 0oods roduced in some areas must
be transferred to other areas which are not so well suited to roduce
the same. This is the genesis of trade and this e"lains why the
massive movement of oil, iron ore, grains, fruits, vegetables and
electronic goods takes lace across borders of various countries.
Transortation and communication, the main ro of business,
deend to a larger e"tent on geograhical factors. %neven landform,
deserts, oceans, forests and rivers are barriers to develo this vital
infrastructure. True, today#s man has learnt to cut across these
natural barriers but he has to ay heavily for overcoming these
hysical obstacles in the form of higher rates necessitated by initial
high cost of construction and subsequent maintenance. This e"lains
the reason why vast areas of the globe in the form of oceans, deserts,
dense forests, mountains and ice cas e"ist even today, bereft of
transortation and communication. Such areas hardly can sustain any
business activities.
The natural environment is articularly imortant to man in two
resects@ 5i6 it is a storehouse of certain s$rce !a"erials that will be
consumed by him ultimately and 5ii6 it rovides certain *hysical an'
+il%ical cn'i"ins within and on which man#s roduction, e"change,
consumtion and hainess deend.
a storehouse of materials, it may be stated that the earth is a
gigantic reository of materials that man, through the ages, has learnt
and is learning to utilise to his advantage. Nearly every commodity
that man has roduced and consumed e"isted originally in the natural
environment. 'n addition, nearly all the energy used in roduction and
distribution comes from nature.
*esides being the origin of needed materials, the natural
environment rovides certain hysical and biological conditions within
which man lives and works. These conditions may be ositive or
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Natural Environment Dr. Shivakumar S*
negative, favourable or unfavourable with resect to man#s livelihood.
(or e"amle, the flat lands of lains normally may be a decisive asset
and undulating and hilly land may be the distinct liability to the
roduction and transortation of most commodities. $onversely, in
times of flood, the flat land may be a liability and the undulating and
hilly land an asset.
Though every country in the world is sending millions of
ruees on the develoment of its own technology, the hysical
environment of each nation determines its stage of rogress in the
field of technology. 4bviously, there are wide differences in rogress
attained in this sector. Technological advancement and in its wake, the
levels of income and standard of life en/oyed in the %nited States and
in other industrial nations have not yet come to many other arts of
the world. To a erson born and bred in a large city like New Aork,
Bondon, Tokyo, Delhi or !umbai and accustomed to the amenities of
modern life, it would be e"tremely difficult indeed to really
understand the way of life and thinking of a grou such as the +alakki
Cokkaligas of N. ?anara numbering around -.,... or the *indibu of
$entral 2ustralia, who have no huts, ractically no clothing, no
agriculture, but only a flint and a few wood imlements. 7eole living in
such conditions are becoming rare. Nevertheless, there are still many
regions wherein, comared to those in modern countries, life is fairly
rimitiveD where eole carry on their economic activities much the
same way as they had done in ast centuriesD where they erform the
same tasks, think on arallel linesD are surred to the same tyes of
action and have the same hoes and fears as their forebearers.
Thus, natural environment e"erts a rofound influence on man
and his economic activities. Every law that is enacted to regulate his
ersonal life and every legislation framed to control his business
activities have one overriding consideration, vi&., ublic interest or
natural /ustice. The e"ression ;natural /ustice# or ;ublic interest# is
derived from the natural environment.
Charac"er an' a""i"$'es & *e*le are sha*e' +y *hysical
envirn!en"(
*esides, it has been said that the scale of natural henomena in 'ndia
and her total deendence on the monsoon, have heled to form the
character of her eole. Even today ma/or disasters such as floods,
famine and lague are hard to check and in older times, their control
was almost imossible. !any other ancient civilisations, such as those
of the 0reeks, 9omans and $hinese, had to contend with hard winters,
which encouraged sturdiness and courage. 'ndia, on the other hand,
was blessed by the bountiful nature which demanded little of man in
return for sustenance, but in her terrible anger, could not be
aeased by any human effort. +ence, it has been suggested that the
'ndian character has tended to fatalism and quietism, acceting
fortune and misfortune alike without comlaint.
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Natural Environment Dr. Shivakumar S*
2s a nation, we are assing through the most critical eriod
with fundamentalism, communalism and linguistic and regional
differences assuming ugly and ernicious roortions. 2t this critical
/uncture, let us look to nature for solace.
Nature is around us with its sub line beauty and slendorous
/oy. 't never deceives us@ the rocks, the mountains, the streams,
always seak the same language. 2 shower of snow may hide the
verdant woods in sring. 2 thunderstorm may render the blue limid
and make the rivers turbulent. *ut in a little while, all the sources of
beauty are revived and revitalised. Nature#s fruits are all balmy and
sweet.
't must never be forgotten that man and nature have a dee
symbiotic link. 2s in the concet of the ancient Cedas, we must realise
that this lanet of ours is the earth mother)*hawani Casundhara in
the +indu tradition, 0aia in the 0reek.
(ive thousand years ago, the seers of the Cedas comosed the
famous *humi Suktam 5+ymn to the earth6. 'ts 3> verses are a
magnificent aean to our mother lanet, from which we can still derive
dee insiration. 'ndeed, these should be required reading for all
those involved in trying to rotect the fragile environment of our
earth.
ANALYSIS OF NATURAL ENVIRONMENT
2mong all the environmental segments, analysis of hysical
environment is relatively easy for two reasons. (irst, changes in the
hysical environment are few and far between. 'n other words, natural
environment is relatively stable and redictable, though calamities like
Tsunami takes any erson off the guard. *ut calamities are not too
frequent, though their occurrence cannot be ruled out. Second, as
stated in the beginning of this chater, scientific breakthroughs and
technological advancements have enabled today#s man to be fairly
indeendent of nature.
7hysical environment has several strategic imlications. 't is
the duty of the analyst to scan, track, forecast and assess these
imlications so that they form art of firm#s strategies.
Firs"# may it be understood that both emloyees as well as
consumers are resentful of firms taking more than giving to the
natural environment. Similarly, eole are areciative of businesses
that conduct oerations in a way that mends rather than harm the
environment. No surrise that businesses of today are urchasing
their own indeendent, nonolluting ower source. This strategy is in
contrast to continuing to urchase electricity from large, olluting,
coal)burning activities.
Secn'# environmental issues that are of concern to
businesses are o&one deletion, global warming, deletion of rain
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Natural Environment Dr. Shivakumar S*
forests, destruction of animal habitats, rotecting endangred secies,
develoing biodegradable roducts and ackages, waste management,
clean air, clean water, destruction of natural resources and ollution
control. These issues need to be embedded in the firm#s strategies.
(or e"amle, firms are increasingly develoing green roduct lines
that are biodegradable and are made from recycled roducts)0reen
roducts sell well.
Thir'# managing environmental affairs should not be taken as
incidental or secondary function of a firm. 7roduct design,
manufacturing and final disosal should not only have orientation
towards environmental rotection, but also be driven by it. (irms that
manage environmental affairs will enhance relations with consumers,
regulators, regulations, vendors and other industry layers )
substantially imroving their rosects of success.
F$r"h# managing environmental affairs can no longer be a
simle a technical function erformed by secialists in a comanyD
more emhasis should be laced on develoing an environmental
ersective among all e"ecutives and other emloyees of the firm.
!any comanies are becoming roactive. They are making
environmental rotection a line function 5hither to considered as a
staff function6, thus making the chief e"ecutive ersonally suerwise
the activities of the management of environmental affairs.
Fi&"h# environment has brought in a new category of eole )
environmentalists or activists. These are the individuals who are
affluent and live mainly in cities. These eole engage in activities
such as not buying roducts from comanies known for insensitivity
towards environment, avoiding aerosol roducts, recycling aer and
bottles and using biodegradable roducts. These details should hel
the firm formulate strategies for roduct develoment and market
enetration.
Finally# firms should formulate and imlement strategies from
an environmental ersective. Environmental strategies should include
develoing or acquiring green businesses, diversting or altering
environment ) damaging businesses, striving to become low)cost
roduces through waste minimisation and energy conservation and
ursing a differentiation strategy through green)roduct features. 'n
addition to crafting strategies, comany should include an
environmental activist on the board of directors, conduct eriodic
environmental audits, imlement bonuses for favourable environmental
results, become involved in environmental issues and rogrammes,
incororate environmental values in mission statements, acquire
environmental skills and rovide training rogrammes for comany
managers and emloyees.
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