Features of Business Environment
Features of Business Environment – The word “business environment” refers to the total of all the people, organizations, and other forces outside the industry’s power that can influence its production. According to an anonymous author: “Like the universe, remove the subset that describes the system and the rest is the environment.” Therefore, the financial, cultural, governmental, technological, and other forces that operate outside a company are part of its environment. Its environment is composed of individual clients or opposing companies and management, client groups, opponents, the media, courts, and other institutions that operate outside of a company.
Also Read: All to Know About Indian Financial Structure
The Main Features Of Business Environment
1. All External Forces
The business environment includes all forces, institutions, and factors that directly or indirectly affect business organizations.
2. Specific and General Forces
The business environment includes specific forces such as investors, customers, competitors, and suppliers. Non-human or general details are social, legal, technological, political, etc., that indirectly affect business.
3. Interrelation
All forces and factors in the business environment are interrelated. For example, as young people want to Western culture, the demand for fast food increases.
4. Uncertainty
It is very difficult to predict changes in the business environment. Since the climate changes very quickly, for example, in IT, changes are frequent and fast in the fashion industry.
5. Dynamic
The business environment is very flexible and constantly changing. It is not static or rigid, so it is essential to monitor and scan the business environment continuously.
6. Complex
It is very difficult to understand the impact of the business environment on companies. While the setting is easy to scan, it is very difficult to know how these changes will affect business decisions. Sometimes the changes can be minor, but they can have a significant impact. For example, a change in government policy to increase the tax rate by 5% can significantly impact the company’s revenue.
7. Relativity
The impact of the business environment can vary from company to company or from country to country. For example, when the consumer organization CES published the report on the detection of pesticides in cold drinks, this caused a decrease in the sales of cold beverages. On the other hand, the sales of juices and other beverages increased.
