Bst Notes
CHAPTER 3
BUSINESS ENVIRONMENT
A business does not operate in a vacuum. It is a part and parcel of the environment surrounding. Success of business largely depends upon the suitability of environment around it. Hence, in order to survive and grow, an enterprise has to adapt itself as per business environment.
MEANING OF BUSINESS ENVIRONMENT
Business environment may be defined as all those conditions and forces external to a business unit, under which it operates. All these forces affect the working of the business firm and firm has to deal effectively with them, in order to be successful in the long-run. It can be defined as “the forces (economic, social, political, technological, etc.) factors and institutions (suppliers, customers, competitors, etc.) with which the businessman has to deal with to achieve its objectives.” In other words, we can say that the business environment is the surroundings in which business exists. It refers to all forces (Factors and institution) which are external to a business and beyond its control. The firm has to deal with these forces effectively if it is to be successful in the long-run.
Business environment has two basic important concerns. First is that one must be aware of the forces and institutions that exists with the organisation, and second one is that, the organisation must be managed in relation to these forces and institutions so that the organisational objectives are achieved.
Environmental forces also influence an organisation in many different directions by providing opportunities for growth and expansion. For instance due to massive demand on in the field of air conditioners and refrigerators, new players have entered into the market to tap on this massive demand. But on the other hand, constraints such as economic conditions, customers, government regulations, availability of natural resources, labour supply, etc. Plays a important role in providing a setback to the business opportunities. The complete
BUSINESS ENVIRONMENT
A business does not operate in a vacuum. It is a part and parcel of the environment surrounding. Success of business largely depends upon the suitability of environment around it. Hence, in order to survive and grow, an enterprise has to adapt itself as per business environment.
MEANING OF BUSINESS ENVIRONMENT
Business environment may be defined as all those conditions and forces external to a business unit, under which it operates. All these forces affect the working of the business firm and firm has to deal effectively with them, in order to be successful in the long-run. It can be defined as “the forces (economic, social, political, technological, etc.) factors and institutions (suppliers, customers, competitors, etc.) with which the businessman has to deal with to achieve its objectives.” In other words, we can say that the business environment is the surroundings in which business exists. It refers to all forces (Factors and institution) which are external to a business and beyond its control. The firm has to deal with these forces effectively if it is to be successful in the long-run.
Business environment has two basic important concerns. First is that one must be aware of the forces and institutions that exists with the organisation, and second one is that, the organisation must be managed in relation to these forces and institutions so that the organisational objectives are achieved.
Environmental forces also influence an organisation in many different directions by providing opportunities for growth and expansion. For instance due to massive demand on in the field of air conditioners and refrigerators, new players have entered into the market to tap on this massive demand. But on the other hand, constraints such as economic conditions, customers, government regulations, availability of natural resources, labour supply, etc. Plays a important role in providing a setback to the business opportunities. The complete