All living things, including humans, live in the environment. Besides Natural environment, people's environment includes family, friends, peers and neighbors. This way Also included are man-made structures such as buildings, furniture, roads, and other physical infrastructure. People do not live in a vacuum. They constantly interact with the environment to live their lives.
Like humans, businesses also don't operate in isolation Vacuum.Enterprises operate within the limits of the whole gambit of the relevant environment and must agree on their way through it. The degree to which a business thrives depends on how it interacts with its environment.A business that constantly remains passive in relation to the corresponding changes in the environment, doomed to gradual disappearance in oblivion. To be successful, a business must not only recognize various elements of the environment, but also respect, adapt to, or manage and influence them. Businesses must constantly monitor and adapt to their surroundings environment to survive and thrive. Violations in The environment can pose extreme threats or open up new opportunities for the company. A successful business must identify, evaluate, and respond to various opportunities and threats in their environment.
As stated above, the success of any business depends on adapting to the environment, in which it functions. For example, when There is a change in government policy, businesses must make the necessary changes to adapt to the new policy. Similarly, a change in technology can make existing products obsolete, as we saw that the advent of computers replaced typewriters; Color television has made black and white television out of Fashion. Again, a change in fashion or taste Buyers may be displaced by market demand for a particular product, for example, demand for jeans has reduced sales of other traditional clothing. All these aspects are external factors that are outside business control. Thus Business units must adapt to these changes in order to survive and succeed in business. Hence, it is very important to have a clear understanding of the concept the business environment and the nature of its various components.
Business Environment Definitions
The term "business environment" refers to external forces, factors and institutions that are beyond the control of the business and affect the functioning of the business enterprise. To These include customers, competitors, suppliers, government, social, political, legal and technological factors, etc. Although some of these factors can have an immediate impact on influence on a commercial firm, others may act indirectly. Such Thus, the business environment can be defined as a general environment that has a direct or indirect impact on the functioning of the business. She is can also be defined as a combination of external factors such as economic factors, social factors, political and legal factors, demographic factors, technical factors and etc., which are uncontrollable in nature and affect the business decisions of the firm.
The business environment has been defined Bayard O. Wheeler as "the totality of all external factors for firms and industries that affect their organization and activities."
According to Arthur M. Weimer, The business environment encompasses the "climate" or set of conditions, economic, social, political, or institutional, in which business transactions are conducted.
According to Gluck and Jauch, "the environment includes factors outside the firm that may lead to opportunities or threats to the firm.Although there are many factors, the most important ones are are socio-economic, technological, suppliers, competitors and government."
According to Barry Richman and Melvn Copen, "The environment is made up of factors that are to a large extent, if not entirely, external and beyond the control of individual industrial plants and their Management. As a matter of fact These are the 'giving' factors within which firms and their management must operate in a particular country, and they often vary greatly from country to country."
From the above It follows above that the business environment consists of internal and external factors that either pose a threat to the firm or provide opportunities for its implementation Activities.
The concept of the business environment
A trading company is an open system. He gets resources from the environment and supplies its goods and services to the environment. There are different levels of environmental forces Environment. Some are close and internal forces, whereas others are external forces. External forces may be linked to the national level, regional level or international level. These environmental forces provide opportunities or threats to the business community. Every business organization tries to use available opportunities and counter threats that arise in the business environment. Business organizations can't change the external environment, they just react. They change their internal business components (internal environment) to take advantage of external opportunities and counter external environmental threats. Therefore, it is very important to analyze the business environment, to survive and succeed for businesses in their industry. Therefore, the vital task of managers is is an analysis of the business environment so that they can adhere to an effective business strategy. Business The firm receives human resources, capital, technology, information, energy and raw materials from society. This follows government regulations and rules, social norms and cultural values, regional agreement and global alignment, economic rules and tax policies Government. Such Thus, a business organization is a dynamic entity as it operates in a dynamic business environment.
Features of the business environment
Based on the above discussion The features of the business environment can be summarized as follows.
Business Environment is a combination of all factors in relation to a business firm that significantly affect their functioning.
The business environment covers factors such as customers, competitors, suppliers, government, and social, cultural, political, technological, and legal conditions.
Business Environment dynamic in nature, that is, constantly changing.
Changes in the business environment are unpredictable. Very much It is difficult to predict the exact nature of future events and changes in the economic and social environment. ,
Business The environment differs from place to place, from region to region, and from country to country.
The importance of the business environment
There is a close and continuous interaction between the business and its environment.This is Interaction helps to strengthen the firm and use its resources more efficiently. How As stated above, the business environment is multifaceted, complex and dynamic in nature and has a far-reaching impact on the survival and growth of the business. That To be more specific, a proper understanding of the social, political, legal and economic environment helps businesses in the following ways:
Identifying the strengths and weaknesses of the firm: the business environment helps to identify the strengths and weaknesses of a person, taking into account technological and global changes Identify opportunities and threats. The interaction between the business and its environment identifies opportunities and threats to the business. This helps enterprises to successfully solve their tasks. Determining the direction of growth: interaction with the environment leads to the opening of new frontiers of growth for commercial firms. This allows the business to identify areas for growth and expansion of its operations. Lifelong Learning: Analysis The environment makes it easier for managers to solve business problems. Managers are motivated to constantly update their knowledge, understanding, and skills to keep up with the projected changes in business. Image building: Understanding the environment helps business organizations improve their image by showing their sensitivity to the environment in which they operate. Meeting with Competitors: Helps firms analyze competitor strategies and formulate their own strategies accordingly.
The relevance of the concept of the business environment
In business, all activities are organized as well as carried out by people to meet the needs of consumers. Thus, it is an activity carried out by people for people that means that people occupy a central place around which all activities revolve. This means that business is people, and a person is always a dynamic entity that believes in change, and perhaps it is correct to say that the only certainty today is change. It is very difficult for today's and especially tomorrow's businessmen and managers to keep abreast specific changes to keep abreast of the latest developments in the business field and maintain its survival and sustainability in the market. Therefore, the study of the business environment is of paramount importance for managers and practitioners.