Business Environment

Q.1. Feature of Business Environment.

It is very necessary to have a clear understanding of the business environment and the nature of its various component.

  1. Dynamic: The business environment is always changing and is uncertain it is because of the dynamic of the environment. The changes in the business environment are unpredictable it is difficult to predict the exact nature of future changes in the economic and social environment.
  2. Uncertainties: The business environment is the sum of all factors outside the control of the management of a company, the factor which are constantly changed and they carry with them both opportunity and ricks or uncertainty is which can make or mark the future of business.
  3. Technological development: The business environment encompasses all those factors that affect a company’s operation and include customer competitors, stakeholders, suppliers in the street, and regulation other government activities social and economic factors, and technological development.
  4. Opportunities: Business environment refer to the external environment and include all factors outside the form which lead to opportunity and threats of a business organization. These business environmental forces provide opportunity a threat to the business communities. The business organization tries to grasp the available opportunity.
  5. Business strategy: very important to analyze the business environment to survive and to get success for the business industry. Role of the manager to analyze the business environment and make an effective business strategy that helps the business firm to use its resource more effectively.
  6. Unpredictable: The change in the business environment are unpredictable. It is difficult to predict the exact nature of future changes in the economic and social environment.
  7. Factors: It cover factors and forces like customers, competitors, supplier, government, social-cultural, political technological, and legal conditions.
  8. Functioning: The business environment is the sum of the total of all factors external to the business organization, that greatly influence their function.
  9. Business information differ: The business information differs from place to place religious to the religious country to country and etc.

Q.2. Important for analyzing Business Environment?

Information analyzing is played a very essential role in business management by providing possible opportunities or threats outside the company of its external environment.

  • Analyzing process: Any business manager should be able to analyze the environment in which the company does business the general process used to analyze the business environment has four basic steps:
    The environment is scan for informational factors.
    The relevant factor is called and monitored.
    Scanners are forecast based upon the environmental factor identified as strategy development accordingly.
  • Identified environmental factor:  Define the environmental factor is most commonly done by brainstorming. All information factor are not always obvious to everyone, and the accurate information tell profit to develop will be an informative factor which included new tax law, tariff limited export law, trade development technology, new replacement product law concerning emissions our new competitor.
  • Informational framework: Several popular frameworks exit to aid in identify informative factor they are frequently used together the first is PEST or PESTEL analyses which look at the political economic social and technological factor affecting a business; sometimes invite the legal are executed lost Lee the five-factor is considered :
    Internal forces
    External forces
    New entrants
    Producer of complementary products and services.
  • Selecting relevant factor: one of the most relevant environmental factors identify should be given further analysis. All factors are not equal to relevant; for example, the shutter tax law will affect the business but really require little additional analysis compared to the trade passes by competitors.
  • Strategic position: After carefully identify and quantity fighters informative factor most relevant to the future success of the company as a mission aid regarding the future development of that factor and the strategy form.

Q.3. Internal and External Environment?

Internal environment:

  1. Value system: The value system of the founder and those at help affair has an important bearing price of business communication the objective of organization business policy and practice.
  2. Mission and value and objective: Vision means the ability to think about the future with imagination and wisdom. Vision is an important factor in achieving the objective of the organization is through which the objective and achieve.
  3. Management structure and nature: The structure of the organization also influence the business decision the organizational structure like the composition of the board of director influence the decision of business as their internal factor the structure and the style of organizational made a decision making or some other help in making quick decisions.
  4. Internal power relationship: The influence of the business, the relationship among the people working in the three-level of the organization should be cordial.
  5. Human resource: The human resource is an important factor of any organization as its contribution to the strength and weakness of any organization the human resource is an organization must have characteristic like skill quality able commitment towards the work attitude etc.
  6. Financial factor: factors like financial policy financial position and capital structure are also important internal environment affecting business performance strategy and decision.

External environment

  1. Micro-environment: Micro factors that affect business strategy, decision making, and performance. It is vital for business success to conduct macro environment and micro-environment analysis before the decision-making process.
  2. Supplier: An important factor of the microenvironment, those who supply the input like raw material and components of the company. the importance of reliable sources of supply to the smooth functioning of the business is obvious.
  3. Customer: The choice of customer segment should be considered a number of factors including the relevant profitable dependability stability of demand growth prospect and the extent of competitors.
  4. Marketing intermediaries: Marketing intermediaries include middlemen such as agent and merchant, that help the company find customer or link between the company and the consumer.
  5. Public: Public includes media and citizen growth of consumer, which is an important development affecting business.
  6. Legal environment: legal environment includes flexibility and adaptability of law and other legal rules governing the business it may include the decision of the court which affects the business and its manager to a great extent.

Q.4. Educational Environment and its Impact?

  • Environmental policy’s:  An ISO 14001 environmental management system is an educational institution is a framework which directs them towards better environmental performance is a way that is integrated into all their operation.
  • Energy and water policies: The policy focuses on reducing energy consumption through technology advancement and optimization by putting high efficiency LED lighting and by installing passive infrared sensors which will be activated only when being the presence of people is detected.
  • Waste Management Policy: The holy environment Trinity of three R’s reduce, reused, and recycle are guidance in creating and strengthening commitment towards sustainability. This can be done by using less paper,  installing recycling bins, encouraging people to use both sides of the paper, avoiding color printing when possible, exchanging study notes among students,  reducing the use of plastic bags, and minimizing the bottles the water use.
  • Transport and travel plans: Moving towards sustainable travel options can we achieve by providing different incentives in order to increase the use of bikes such as providing free bikes to first-year students and monthly discount on bus tickets for students.
  • Procurement policy: Institutions should may sure that they are purchasing from environmentally responsible and are supporting local supplies as they are big purchasers starting from paper and printing IT equipment, sports equipment, foods, and sports, etc.


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Reference: Smart Notes


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