nature and scope of business environment

Such factors create turbulent environment for the 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. Content Filtrations 6. Thus, business environment  may be defined as the total surroundings, which have a direct or indirect bearing on the  functioning of business. All rights reserved. (iii) Help to Understand Economic Policy: Economic policy has its own importance in business environment and it has an important place in business. Moreover, resources have a stock and they have a rate of depletion and replenishment such as oil, minerals, and forests. The customers, competitors, stakeholders, brokers, business trends, policies  government activities, social and economic factors, and technological advancement are all the components of an organisation which combine to form the business environment. See our Privacy Policy and User Agreement for details. These environmental forces provide opportunities or threats to the business community. According to Arthur M. Weimer, business environment encompasses the ‘climate’ or set of conditions, economic, social, political or institutional in which business operations are conducted. Secondly, if the individual wants to save more, the amount for spending will be less. It tells about the social roles and organizations and the development of social institutions. It should be noted that every business unit also has internal environment which includes production, finance, marketing, personnel, legal, etc. In this connection Ian Hodge points out, “What we will find is that choices made about the environment depend upon similar factors as do choices made in other areas of economics. It gets resources from the environment and supplies its goods and services to the environment. Its solution lies in micro level planning. Most countries of the world are insisting on uniform standards and environmental regulations for all nations. A business firm is an open system. Therefore, it has wide scope. The risks and opportunities are those factors which lie beyond the control of a company’s management system. External forces may be related to national level, regional level or international level. It is very difficult to predict  the exact nature of future happenings and the changes in economic and social  environment. We generally observe crowded market places, industrial units, and even residential areas in a city like, Delhi. Privacy Policy 8. The longstanding foundation of environmental economics lies in conservation economics which tends to emphasise the impact of economic activities on demand for productive resources and energy resources. With availability of these services individuals can devote more resources for conservation. Every business organization tries to grasp the available opportunities and face the threats that emerge from the business environment. Plagiarism Prevention 4. The size of the international business should be large 4. Plagiarism Prevention 4. On the other hand, if the economy moves from point S to points В on the ME curve, it means more emission reduction without reducing the economic activity level (L) because point S and point В lie in the same direction. It is the class structure of the society. Business environment is relative in nature which means that it changes from one place to another and from one country to another. The business enterprise is a part of society and the business environment has direct relationships with the business. The business environment helps to understand government policies such as, export-import policy, price policy; monetary policy, foreign exchange policy, industrial policy etc. It studies the impact of pollution on human beings and suggests national utilization of resources in a proper way so that there may be an increase in social welfare or minimization of social costs. A successful business has to identify, appraise, and respond to the various opportunities and threats in its environment. Nature of business will be influ enced by the business environment. from the environment. If the economy moves from point S to point A on the ME curve, it means more production with increase in economic activity without increased emission. Your email address will not be published. It interacts between human beings and their physical surroundings. There are many international issues like hazards of trans-boundary shipments, unwanted substances and common property resources which need international cooperation among nations. The market forces will be helpful in determining these scarce resources in most rational manner. Third, environmental quality can decrease when the rate of growth increases.

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