Business environment is composed of towards Business and Environment. in simple term, the state in which a person remain busy is known as a business. the word business in its economic sense means human activities like production extraction or purchase or sale of good that are performed for earning profit. on the other hand, the word environment refers to the aspect of the surrounding. therefore business environment may be defined as a set of conditions - social , legal, economical, political or institutional that are uncontrollable in nature and affect the functioning of organisation.
According to Richman and Copper "there are lot of pressure and control which are mostly outside the control of individual and its managers"
according to Arthur M. Weimer "Business environment is the climate or set of conditions economic, social, political or institutional in which business operation are conducted."
Nature of Business Environment
- Business environment is the surrounding atmosphere where business operation are conducted
- business environment consists of a number of factors, events, conditions and influences arising from different sources
- due to many and varied influences operating there is a dynamism in the business environment i.e. It changes frequently
- The business environment determine the scope of business activities no business enterprise can afford to neglect or ignore the environment of a business thus the business environment creates the framework within which all business activities are to be conducted.
- the relationship between a firm and its environment is one of the mutual benefit this is referred to as a symbiotic relationship. the word symbosis is taken from botany and refers to the mutually beneficial relationship in it exists between the trees and a small plant
- the business environment has an internal and external component the internal environment consists of the technical and physical facilities, employees, organisational policies etc. the internal environment are generally regarded as controllable because the company has control over these factors. the external environment are independent and uncontrollable that consists of socio-cultural factors, legal, political, economic, technical etc factors which directly influence the working of the business enterprise hence these external factor are to be carefully analysed because it either provides opportunity or threat to extract the smooth working of the Enterprise.
