Business environment is the sum total of all external and internal factors that influence a business. You should keep in mind that external factors and internal factors can influence each other and work together to affect a business.
Understanding the environment within which the business has to operate is very important for running a business unit successfully at any place.
As stated earlier , the success of every business depends on adapting itself to the environment within which it functions. For example, when there is a change in the government polices,the business has to make the necessary changes to adapt itself to the new policies. Similarly ,a change in the technology may render the existing products obsolete, as we have seen that the introduction of computer has replaced the typewriters; the colour television has made the black and white television out of fashion.
Again a change in the fashion or customers’ taste may shift the demand in the market for a particular product, e.g., the demand for jeans reduced the sale of other traditional wear
. All these aspects are external factors that are beyond the control of the business. So the business units must have to adapt themselves to these changes in order to survive and succeed in business. Hence, it is very necessary to have a clear understanding of the concept of business environment and the nature of its various components.
– FEATURES OF BUSINESS ENVIRONMENT
On the basis of the above discussion the features of business environment can be
summarized as follows
(a) Business environment is the sum total of all factors external to the business firm and
that greatly influence their functioning.
(b) It covers factors and forces like customers, competitors, suppliers, government, and
the social, cultural, political, technological and legal conditions.
(c) The business environment is dynamic in nature, that means, it keeps on changing.
(d) The changes in business environment are unpredictable. It is very difficult to predict
the exact nature of future happenings and the changes in economic and social
(e) Business Environment differs from place to place, region to region and country to