compiled by Vusumuzi Lungelo Khanyile
department of education, University of Johannesburg
WHAT IS BUSINESS
Environment is a
relationship between a business’s
actions and its environment.
Environment is the surroundings of a
business by which business
influenced directly or indirectly.
Where the political, economic, social
and technological factors shopping a
business environment are assessed
by a business so as to devise future
ENVIRONMENT REFERS TO ALL FACTORS
WHICH HAS A BEARING ON THE FUNCTIONING
OF A BUSINESS UNIT.
IT MAY BE INTERNAL AND EXTERNAL
The environment is the result of changing social and
economic and political forces which creates
challenges, opens up new opportunities and affects
the strength and weaknesses of various business
A business firm is an economic unit which is engaged in the
production or distribution, or both the production and distribution of
goods and services for the purpose of earning profits
• Recently it is complex.
Determined by government,
capital market, household sector,
global market etc. It consists of
economic conditions, economic
systems, economic policies,
economic growth, interest rates,
currency exchange rates
by national income,
percapita income, economic
resources, distrn of income and
assets, economic development
etc. business cycles and
economic growth are also
important in the eco.conditions
and in turn environment
The social environment of business includes social factors
like customs, traditions, values, beliefs, poverty, literacy
For example: During festive seasons there is an
increase in the demand for new clothes, sweets,
fruits, flower, etc.
Impact of defence and military policy, Political stability,
President’s rule, emergency, philosophy of political parties,
Foreign policy, like allignment of non allignment policy, loan
from IMF, ADB, ASSEAN agreement etc.
This refers to set of laws, regulations, which influence the
business organizations and their operations.
Every business organization has to obey, and work within
the framework of the law.
Eg: Factory act 1948.
The domestic factors that affects the firm situated in a
Global Business Environment
•The Global Business Environment is that the business carried on globaly.It is
influenced by the World Trade Organisation, principles and agreements.
Overview of Business Environment
Mission & Objectives.
Co. Image & Brand Equity
Non - Economic
NATURE OF BUSINESS
The internal factors are generally regarded as controllable
factors because the company has control over these
because the company has central over these factors; it can
alter or modify such factors as its personnel, physical
facilities, organization and functional means, such as
marketing mix to suit the environment.
Determinants of internal
Mission and vision of the organization
Management philosophy and strategy
Corporate culture and values
Line and staff relations
Governance standards and codes
Quality central system
Team spirit among employees
Work culture and socio-economic background of employees
Job design and coordination
Quality of internal communication
Compensation system and career progression of employees
Central system of the organization
environment of business
consist of institutions, organizations
and forces operating outside the
Company. All these individually as
well as collectively exercise their
influence on the latter. Broadly
external environment of business may
be classified into
Micro Environment and
The most prominent performs in the
micro environment are the following
Suppliers of inputs
Workers and their unions
DETERMINANTS OF BUSINESS ENVIRONMENT
Economic policies :
. Political Conditions
Corruption rule of law
law and regulations
Ashumali Singh. (2009).business environment. Available:
Babasab Patil (karrisate). (2012). Introduction to business
Jithin Clashes Zcs. (2013). Business environment basics.
Pankaj Kumar. (2011). Elements of business management.
R.Paul Godwin. (2013). Domestic and global business