Business Environment Case Study

1762 Words8 Pages
1.1 Objectives: After going through the chapter, you will be capable of: i. Understanding Business Environment concept. ii. Significance of Business Environment. iii. Defining the nature and scope of Business Environment. iv. Environmental INTERNAL & EXTERNAL factors affecting business. v. Describing the complexity of ‘external environment’ which functions the business. vi. Understanding business’s’ response to changing environmental factors to function successfully. vii. Also, how business try to influence environment. 1.2 Introduction The term ‘environment’ is derived from a French word “Environia” which means ‘to surround’ in which organisms live. It refers to both non-living and living factors which constitute environment. Environment…show more content…
These factors and forces are: - customers, competitors, suppliers, government, and the social, political, legal and technological factors etc. Some of the factors or forces have direct influence over the business while others may affect the business indirectly. Business environment may be defined as the total surroundings, which have a direct or indirect bearing on the functioning of business. It can also be defined as the set of external factors, such as economic factors, social factors, political and legal factors, demographic factors, and technical factors etc., which are beyond the control of human power and affects the decision making function of the organization. Thus, environment refers to the immediate surroundings of a thing and exercising a direct pressure on it. Our environment refers to those diverse thing or agencies which affect our life or activity. The word ‘Environment’ has been defined by various authors and some definitions are as…show more content…
The positive impact of business environment is explained with following points: (i) Help to understand internal Environment: It is very much important for business enterprise to have effective management information system to understand its internal environment, such as business policy, organization structure etc. which will help to predict the business environmental changes. (ii) Help to Understand Economic System: Economic factors greatly influence the business. It is essential for a businessman and business firm to be acquainted with the role of capitalists, socialist and mixed economy. The different kinds of economic systems influence the business functioning in various ways. (iii) Help to Understand Economic Policy: Economic policy has its own importance in business and influences the business decisions. It helps to understand government policies which ultimately has impact on business objectives such as, export-import policy, price policy; monetary policy, foreign exchange policy, industrial policy
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