In the second section, I will describe the stakeholder which related our organization, and discuss objectives of the different stakeholder of the organization. Economic: Economic factors include supply and demand, exchange and interest rates, taxes, and government spending. His dynamic approach in turn will help the firm to avoid ecological stresses and to maintain harmony with the environment. This includes socio-economic conditions, technology and political conditions. The business must act or react to keep up the flow of operations.
Copyright © 2006-2008 Ryan Sievers. The examples include unemployment rate, currency exchange rate, consumer confidence or depression. These changes may create favorable and unfavorable impact on the firm. This helps to develop preventive measures to cope up with the threats effectively. Social factors are basically sociological factors related to general society and social relations that affect your business. There are several factors of the customer and the business environment, such as suppliers, technology, law and government activity and the market, social and economic trends competitions and owner, is improved.
To do so, you need to look at the external environment. Search business environment and thousands of other words in English definition and synonym dictionary from Reverso. External factors include political factors, macroeconomic factors, microeconomic factors, social factors, and technological factors. An individual business firm survives and grows within the periphery of its environment. Business environment is growing extremely complex due to government interventions and social consciousness.
Micro factor includes customers, suppliers, competitors, society etc. The business environment helps to understand government policies such as, export-import policy, price policy; monetary policy, foreign exchange policy, industrial policy etc. The Micro Environment There are five factors that affect the micro environment: suppliers, customers, marketing intermediaries, financiers, and public perceptions. Natural calamities like floods, droughts, earthquake etc. As a means to better understanding and analyzing its complexities, the. Business makes it possible for the technology to reach the people in proper format. Market forces affect organizational responses to supply and demand, where those responses and behavior are shaped via cultural environment such as economics, socio-culture, technology, etc.
Moreover, all these activities must be conducted within the existing legal framework. The surrounding of business enterprise that is constantly changing carries both opportunities and threats with them. It is essential for a businessman and business firm to know about the role of capitalists, socialist and mixed economy. Business lacks control over environment : Business environment is a constantly changing process. No matter what influences your business, it is important that you be able to adapt and handle change. Any change in the environment can adversely affect the business organisation.
The external environment can be broken down into two types: the micro environment and macro environment. Technological factors are technological innovations that can either benefit or hurt your business. The extent of standardisation or differentiation of the product. It helps the business enterprises for meeting the challenges successfully. Suppliers: At your gas station, what happens if your suppliers don't show up with food, beverages, gas and other products? Organizational structure is the manner in which the business is organized to conduct its activities. Lesson Summary Business environment includes the external and internal factors that influence a business.
The significance of business environment is explained with the help of the following points: i Help to understand internal Environment: It is very much important for business enterprise to understand its internal environment, such as business policy, organisation structure etc. It cannot directly influence the changes in external environment. Micro environmental factors include suppliers, customers, marketing intermediaries, financiers, and public perceptions. Examples include laws, regulations, tariffs and other trade barriers, war, and social unrest. It is compulsory for everyone to obey the law of the land. Business enterprises continuously interacts with its environment for taking inputs like raw materials, capital, labour, energy etc. Business cannot work without environment.
Marketing Intermediaries: Middlemen have a direct impact on your business operation. Thus total environment of business is consisting of six factors, viz. In modern times, the purpose of business goes beyond earning profit. Business lacks control over external environment. Aviation, telecom organizations, foods etc is the purpose of profit in a standard way socially.
Lesson Summary By now you should have a good understanding of the external environment that may influence how successful your gas station may be in the future. All the business activities are expected to be conducted within social, political, economic and legal structures. These businesses are affected by the two types and these are Micro internal environment and Macro external environment. Labour is a valuable human element in business. The way your company reacts to economic changes is key, and this is where creativity comes into play.
So, the firm has no other option, but to respond and adapt accordingly. Chances for Growth By identifying itself with the changing situations and environment, the firm can gain the popular support and win the confidence of the consumers and others. It includes suppliers, customers, competitors, market, intermediaries, etc. You'll have nothing to sell, which will have a direct impact on your operation. Opening of New Avenues Environment opens fresh avenues for the expansion of new entrepreneurial operations.