Components of Business Environment Business Environment Internal Environment Promotersshareholders Missionobjectives Management structure Internal power relation Company image Research amp Development ID: 1029544
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1. Meaning The combination of internal and external factors that influence a company's operating situation. The business environment can include factors such as: clients and suppliers; its competition and owners; improvements in technology; laws and government activities; and market, social and economic trends.
2. Components of Business Environment.Business EnvironmentInternal EnvironmentPromoters/shareholdersMission/objectivesManagement structureInternal power relationCompany imageResearch & DevelopmentHuman ResourcesMarketing capabilitiesExternal EnvironmentMicro EnvironmentCustomersSuppliersCompetitorsCreditorsDistributers Macro EnvironmentEconomic environmentSocial environmentTechnological environmentNatural environmentPolitical environment
3. Types of Business EnvironmentThere are two types of business environment:Internal Business Environment External Business Environment and External environment is divided into two categories (a)Micro Environment & (b)Macro Environment.
4. Internal EnvironmentThese are those factors which can be controlled by the company and they directly affect the operations of the company.Types of Internal Environment:ShareholdersMission & objectivesManagement structureInternal Power RelationshipHuman resources, etc.
5. External Business EnvironmentThose factors which are beyond the control of business enterprise are included in external environment.External Environment is divided into two parts:Micro Environment: The environment includes factors on which business has some control indirectly.Macro Environment: it includes factors on which business has no control any how.
6. Micro EnvironmentSuppliers: The party which supplies raw material or inputs.Customers: Wholesalers, Retailers, Industries, Govt. & other InstitutionsMarker Intermediaries: middleman, Marketing agencies, Financial intermediaries, physical intermediariesCompetitors Public
7. Macro EnvironmentEconomic Environment: it refers to all the economic factors that affect commercial and consumer behaviour. It includes micro & macro economic condition. The factors includes interest rates, taxes, inflation, currency exchange rates, savings rates, unemployment rate, recession, depression, etc.
8. Macro EnvironmentPolitical Environment: it includes all the rules & regulations, laws and roles of the govt. In the day to day functioning of the organisations. It includes factors like political stability, taxation policy of govt., foreign trade regulation, subsidies & tax concession
9. Macro EnvironmentSocial Environment: influence exercised by social and cultural factors, not within the control of business. It includes: attitude of people to work, family system, caste system, religion, education, marriage, taste & preference of consumer, trends, etc
10. Macro EnvironmentTechnological environment: it refers to environment related to the technology to make operations more easy and efficient. The factors include innovation of new technology and upgradation of old one to win over the competition of company.
11. Macro EnvironmentNatural Environment: it includes natural resources, weather, climatic condition, port facilities, topographical factors such as soil, sea, rivers, rainfall, etc. Every business unit must look for these factors before choosing the location for their business.
12. Macro EnvironmentInternational Environment: it is particularly important for industries directly depending on import & exports.The factors include:GlobalizationLiberalisationForeign Business PoliciesCultural exchange, etc.