Question

Define the term Business Environment. Describe in detail the types of Business Environment.

Answer 1

Intro:-

It is sum total of external internal factors that influence a business.it refers to any kind of internal or external forces which have an effect on the functioning of the business in a positive or negative way.

there are three types of business environment mainly:-

✓internal environment

✓external environment

$\underline Internal Business Environment:-$

The internal business environment includes physical assets, human, financial and marketing resources, technological supports, the management etc. Financial resources represent the financial capabilities of the organization, while physical resources are an indicator of physical assets which include machinery, production plant, and buildings etc which convert the input into output.

Human resources are a very crucial factor in the internal business environment. The managerial decisions are taken by human resources while technological resources represent the technical knowledge which is used in the manufacturing of goods and services. Internal environment consists of the factors which are controllable and which can be changed according to the requirements of the external environment. There’s been a drastic change in the internal environment in the last decade or so. The contemporary work environment does not help the employees to be more productive and the Internet is your organization that suffers.

That is the reason why organizations have started to adopt a more flexible way of working by making necessary changes in the internal environment. Write from given liberty of wearing informal clothes at the workplace to having Gyms and even work from home facilities, the internal environment has become more employee friendly rather than work friendly because organizations have realized that the true potential lies in the human factor. Google is the benchmark of one of the best companies providing the best internal environment to their employees.

$\underline External Business Environment:-$

The external environment is relatively watched compared to the internal business environment. It is composed of various organizations institutions and other forces which operate beyond the control of the organization. It is further classified into external micro and external macro environment.

External Micro Business Environment: Microbusiness forces have a major impact on the operations of a business. For example, suppliers have a huge impact on the pricing of the products. Also, a competitive firm will start a price war in an industry which is relatively small but if the rival firm is a big one then the competitive firm will hesitate to initiate the price war. Following are important factors of micro external environment:

Answer 2

Here is your answer.....