Business Environment.
Business environment can be defined as those forces ,
individuals and institutions who have the ability to
influence the working of an organization.
Features of Business Environment.
1. Totality of external forces .
Business environment is the sum total of all the forces / factors external to
a business firm .
2. Specific and General forces.
Business environment includes both specific and general forces . Specific
forces include investors , competitors , customers etc who influence
business firms directly while general forces include social , political,
economic , legal and technological conditions which affect a business firm
indirectly.
3. Inter - relatedness .
All the forces / factors of a business environment are closely interrelated .
4. Dynamic.
Business environment is dynamic in nature which keeps on changing with
the change in technology, consumers fashion and tastes etc .
5. Uncertainty.
Business environment is uncertain as it is difficult to predict the future
environmental changes and their impact .
6. Complexity.
, Business environment is complex which is easy to understand in parts
separately but is difficult to understand in totality.
7. Relativity.
Business environment is a relative concept whose impact differs from
country to country and region to region.
Importance of Business Environment.
1. Identification of opportunities to get first mover
advantage.
Understanding of the business environment helps an organization in
identifying advantageous opportunities and getting their benefits prior to
competitors .
2. Identification of threats.
Correct knowledge of the business environment helps an organization to
identify those threats which may adversely affect its operations.
3. Tapping useful resources.
Business environment made available various resources such as capital,
labour, machines, raw material etc to a business firm. In order to know the
availability of resources and making them available on time knowledge of
the business environment is necessary.
4. Coping with rapid changes.
Continuous study / scanning of business environment help in knowing the
changes which are taking place and thus they can be faced effectively.
5. Assistance in planning and policy formulation.
Business environment can be defined as those forces ,
individuals and institutions who have the ability to
influence the working of an organization.
Features of Business Environment.
1. Totality of external forces .
Business environment is the sum total of all the forces / factors external to
a business firm .
2. Specific and General forces.
Business environment includes both specific and general forces . Specific
forces include investors , competitors , customers etc who influence
business firms directly while general forces include social , political,
economic , legal and technological conditions which affect a business firm
indirectly.
3. Inter - relatedness .
All the forces / factors of a business environment are closely interrelated .
4. Dynamic.
Business environment is dynamic in nature which keeps on changing with
the change in technology, consumers fashion and tastes etc .
5. Uncertainty.
Business environment is uncertain as it is difficult to predict the future
environmental changes and their impact .
6. Complexity.
, Business environment is complex which is easy to understand in parts
separately but is difficult to understand in totality.
7. Relativity.
Business environment is a relative concept whose impact differs from
country to country and region to region.
Importance of Business Environment.
1. Identification of opportunities to get first mover
advantage.
Understanding of the business environment helps an organization in
identifying advantageous opportunities and getting their benefits prior to
competitors .
2. Identification of threats.
Correct knowledge of the business environment helps an organization to
identify those threats which may adversely affect its operations.
3. Tapping useful resources.
Business environment made available various resources such as capital,
labour, machines, raw material etc to a business firm. In order to know the
availability of resources and making them available on time knowledge of
the business environment is necessary.
4. Coping with rapid changes.
Continuous study / scanning of business environment help in knowing the
changes which are taking place and thus they can be faced effectively.
5. Assistance in planning and policy formulation.
