Question

Factors influencing business environment (economic and non economic)

Answer 1

Economic environment of business includes all those forces which have an economic impact on business. Business enterprise which has to play its role under the existing economic environment is an economic institution. It works, with the objective of profit maximization.

Therefore, economic decisions of business enterprise are determined by both micro and macro-economic environment. But the economic environment of business normally reflects the prevailing economic system and thereby it gives more emphasis on macro-economic environment.

Answer 2

Macro environments are the organizations which obliquely influence the company's performance and operating condition.

All businesses, whether national or international, are influenced by the changing business conditions prevailing in the market. Among the many commercial agents concerning business, some are; business rates, command, and accumulation, depression, inflation, etc.

The non-economic conditions incorporate a political system, administration policies, legal structure social system, cultural conditions, demographic factors, technological advancement and the natural surroundings of the nation.