After going through the chapter, you will be capable to:
i. Understand the concept of Business Environment ii. Appreciate the significance of of Business Environment. iii. Define the nature of Business Environment iv. Delineate the various internal and external environmental factors affecting business.
v. Understand the nature of ‘internal environment’ of business. vi. Describe the complexity of ‘external environment’ in which business operates. vii. Understand how businesses must respond to changing environmental factors in order to operate successfully, but also how they seek to influence environment.
The term environment has been derived from a French word “Environia” means to surround. It refers to both …show more content…
These include customers, competitors, suppliers, government, and the social, political, legal and technological factors etc. While some of these factors or forces may have direct influence over the business firm, others may operate indirectly. Thus, business environment may be defined as the total surroundings, which have a direct or indirect bearing on the functioning of business. It may also be defined as the set of external factors, such as economic factors, social factors, political and legal factors, demographic factors, technical factors etc., which are uncontrollable in nature and affects the business …show more content…
In the past, the environment of man consisted of only the physical aspects of the planet Earth (air, water and land) and the biotic communities. But in due course of time and advancement of society, man extended his environment through his social, economic and political function.”
In a globalised economy, the business environment plays an important role in almost all business enterprises. The significance of business environment is explained with the help of the following points:
(i) Help to understand internal Environment:It is very much important for business enterprise to understand its internal environment, such as business policy, organisation structure etc. In such case an effective management information system will help to predict the business environmental changes.
(ii) Help to Understand Economic System:The different kinds of economic systems influence the business in different ways. It is essential for a businessman and business firm to know about the role of capitalists, socialist and mixed