BUSINESS ENVIRONMENT

MEANING
Business environment refers to those aspects of the surroundings of business enterprise which have influence on functioning of business.

Acc. To Arthur M. Weimer

Business environment is the climate or set of conditions economic, social, political or institutional in which business operations are conducted.

COMPONENTS OF BUSINESS ENVIRONMENT

Internal environment

External environment

Financial resources Objectives of business Managerial policies Work environment

Micro environment
Supplier Customer Competitor Intermediaries Public

Macro environment Economic Political Socio-cultural Technological Natural Demographic

International

INTERNAL ENVIRONMENT Internal environment includes internal factors of the business which can be controlled by business. It refers to environment within the organization.

EXTERNAL ENVIRONMENT External environment refers to external aspects of the surroundings of business enterprise which have influence on the functioning of business. These external aspects are beyond the control of business.

Types of external environment

MICRO

ENVIRONMENT : The forces which are close to the company and affect its ability to work, constitute micro environment .e.g. supplier, customer. MACRO ENVIRONMENT : It means general environment of business. Macro forces are uncontrollable in comparison to micro forces of environment.

ELEMENTS OF MACRO ENVIRONMENT

ECONOMIC ENVIRONMENT

POLITICAL ENVIRONMENT

Eco. Conditions

Eco. Policies

Ideology

Stability

Eco. System

Relation With Other nations

Socio-cultural Environment

Demographic Environment

Religion

Value system

Age
composition

Sex
composition

Caste system

Family system

Urbanrural

Family structure

Natural environment

Technological environment

International environment