Explain the interrelationship between business and environment.
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Environment is closely related with business. There is a constant ‘give and take’ relationship between environment and business. The business receives inputs, information and technology from the environment and gives it back in the form of outputs (goods and services).
If these outputs are accepted by the environment, the environment-business interaction continues but if they are unacceptable to the environment, firms adapt to the environmental requirements and change their operations.
The organisation has to look after the interest of stakeholders like shareholders, consumers, workers, suppliers etc. The environment also offers threats and opportunities to which organisations have to respond positively.
If these outputs are accepted by the environment, the environment-business interaction continues but if they are unacceptable to the environment, firms adapt to the environmental requirements and change their operations.
The organisation has to look after the interest of stakeholders like shareholders, consumers, workers, suppliers etc. The environment also offers threats and opportunities to which organisations have to respond positively.
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