MEANING AND CHARACTERISTICS OF BUSINESS ENVIRONMENT
BUSINESS ECONOMICS AND BUSINESS AND COMMERCIAL KNOWLEDGE : Objective to writing this article to build an understanding environment of business that how a business executes its activities in a certain environment in which it exists and how it is influenced by the external and internal environment. I will try to cover the meaning and characteristics of the business environment in this article. I am sure it will help all CA Foundation students to get a basic knowledge of the topic.
Introduction
Business means providing goods and services in exchange of money or in kind to fulfill the desires of customers. And a business is created and operated to execute all these activities of providing goods and services to the end user. A business concern which conducts its operation effectively will earn adequate returns on the investment made in business by its owners. There are several types of business organization exists in the economy. Like Micro business organizations, small business organization, medium business organizations, and large business organizations. Every type of business organization does have the capability to create job and employment according to size and nature of the business. Thus society is also benefited by these organizations. Change in place, time, and the situation is a continuous process and it keeps moving on. A business organization has to face a basic problem to cop up with the changing environment and consistent survival of its business. We will now understand the business environment.
Meaning of Business Environment
The environment of business means is internal and external factors, forces or conditions which favorably or unfavorably affect the business strategies, decisions and action taken by the owner of firm or business concern. A business environment often decides the success or failure of a business concern. A business concern is supposed to identify all kind of the factors which can affect business adverse or favorable, only identification is not adequate but respect, adaption and effective enforcement according to situation and time is necessary and most important. Further, it is to be kept in mind every time that environment has a nature of continuous change. Hence it should be continuously monitored and continuous process of modification for long-lasting business activities.
Some of the factors of the business environment are enlisted below:
- Suppliers
- Competitors
- Law and Orders and Government policies
- Creditors
Characteristics of Business Environment
- Complex: –
There are numbers of factors affecting business both internal and external. All the factors at a single point of time are difficult to look into. All the factors can be understood in parts easily but not as a whole. Hence it is very complex in nature.
- Dynamic: –
Environment has a nature of constant and continuous change due to many and varied influences environment changes dynamically. Thus synchronization of business policies already in existence with the dynamic environment is a tough task to execute.
- Multifaceted: –
It means the perception of the observer will decide that change in environment or a particular type of environment is a threat or opportunity for the business concern according to its nature and size. It may also be possible that a particular situation is an opportunity for one business concern and a threat to another one.
- Far-Reaching Impact: –
It is very difficult to decide the growth and profitability of a company. Because it critically depends on the environment in which it exists.
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