Meaning of business environment
Natural resources and economic
Principles of resource development
THE DEFINITION OF BUSINESS ENVIRONMENT
Business environment includes the ‘climate’ or set of conditions: economic,
social, political or institutional which have a direct or indirect bearing on
the functioning of business
It signifies external forces, factors and institutions that are beyond the
control of the business and they affect the functioning of a business
INCLUDE THREE TYPES:
THE INTERNAL BUSINESS ENVIRONMENT
The internal environments are the things that happen inside the business.
Things like economic factors, social and cultural factors, legal and political
factors, also political factors
Any company operating in international markets across its national borders
actually deals with five sets of environments: domestic internal, domestic
external, foreign internal, foreign external and the international business
environment comprising of treaties, agreements and conventions. The
dynamics of the global marketplace are governed by the interplay of all
The major difference between domestic and international trade lies in the
different operating environments.
The growing economic interdependence among nations, coupled with
rapid industrialization of business and globalization of markets have
contributed greatly to blur the lines between international trade and
foreign investment, between domestic and foreign trade policies, and
between foreign and local firms and products. The results have been seen
in terms of growing cooperation and competition. Growing economic
interdependence among nations has given importance to supportive
global economic institutions. These institutions in turn have greatly
influenced the economic and trade scenario worldwide.
SOCIAL AND CULTURAL FACTORS
The dealing with different people in business is the most vital thing
that must be dealing with. A company working in an international
business environment has to be in constant touch with the tastes
and preferences of its customers and must keep adapting its
products and marketing styles to match the same. Cultural can
have the factor in different areas of the business because working
with different cultural background in the challenge.
LEGAL AND POLITICAL FACTORS
Both political and legal systems of a country influence the
conduct of business at home and abroad. Any exporting
company operating in different countries must face
different political and legal conditions.
THE TECHNOLOGICAL FACTOR
The use of technology can change the way business work
because some technology can change every day.
Changing of technology can be the factor in the business.
Micro environment consists of the actors in the company’s
immediate environment that affect the performance of the
company. They are more intimately linked with the
Macro environment consists of larger societal forces that
affect all the actors in the company’s micro environment.
THE FEATURES OF MICRO ENVIRONMENT
THE FEATURES OF MACRO ENVIRONMENT
FEATURES OF MARKET ENVIRONMENT
Before we describe business objectives, it is desirable to be clear
about related concepts, viz.,
VISION: A Vision is a broad explanation of why the firm exists and
where it is trying to lead.
A vision gives the organisation a sense of purpose and a set of
values that unite employees in a common destiny.
A Mission statement outlines the fundamental purpose of
A Mission statement incorporates four elements:
1.Customer needs, or what is being satisfied.
Customer groups, or who is being satisfied.
2. The company’s activities, technologies, and
competencies, or how the firm goes about creating and
delivering value to customers and satisfying their needs.
3. The company’s concern for survival, its philosophy, its selfconcept and its concern for public image.
LIST OF REFERENCES
International Business environment,2007. Assessment. Excel
Business Environment, Dr V. Tripathi. SMS