Meaning of Business Environment
Business Environment has combination of two words. First 'Business' and second 'Environment'. Business word represents the organized efforts of enterprises to supply consumers with goods and services.
'Environment' word refers to all external factors which have a bearing on the functioning of business. The environment includes factors outside the firm which can lead to opportunities for or threats to the firm. Although there are many factors, the most important of the sectors are socio-economic, technological, supplier, competitors and government.
Business environment exhibits many essentials. Since it is complex, dynamic multifaceted and it has a far reaching impact. Every business organization thus consists of two factors viz. internal factor and external factors.
Elements of Business Environment
The environment of business consists of all those external thing to which it is exposed and by which it may be influenced, directly or indirectly.
Business environment has following elements
- All the environmental factors are dynamic
- It is the base of changing to society
- All uncertain events influenced to the business
- It is not in position to change its environment
I. Internal Environment
The internal environment refers to all the factors within an organization which impart strength or cause weaknesses of a strategic nature. These are-
1. Financial Capability
2. Marketing Capability
3. Operations Capability
4. General Management Capability
5. Personnel Capability.
II. External Environment
The external environment includes all the factors outside the organization which provide opportunities to impose a threat to whole organization. These are
