Introduction-
The word 'Business Environment' is a combination of words
Business+Environment. Let us discuss the meaning of Business and Environment.
Meaning of Business-
It includes all the activities connected with production, trade , finance,advertising, packaging etc.
Meaning of Environment-
It refers to all the external forces which have an impact on the functioning of the business.
Meaning of Business Environment-
The term 'Business Environment' means the sum total of all individuals or institutions (consumers, competitors, suppliers, government, media etc.) and other forces (economic, social, political, legal etc.) that are outside the control of a business but may affect its performance.
RELATIONSHIP BETWEEN BUSINESS & ENVIRONMENT
TYPES OF BUSINESS ENVIRONMENT
MICRO ENVIRONMENT-
It includes specific forces which are close to business & have a direct impact on its strategy. For e.g. customers, suppliers, media, employees etc.
MACRO ENVIRONMENT- It includes general forces which affect the strategies & objectives of the business.
These factors are
1. Economic Factors - Increase in taxes , inflation.
2. Legal Factors - Chage in laws by Government .
3. Political Factors - Political Uncertainity .
4. Technological Factors- Technological improvements.
5. Social Factors - Change in fashion & tastes of
consumers.
Dimensions of Business Environment
