How would you characterise business environment? Explain, with examples, the difference between general and specific environment.
Answers
SOLUTION :
Business environment :
Business environment is characterise as the sum total of factors and institution that operate outside the business enterprise , but may affects its performance. Business environment consists of factors that influences many enterprises at the same time.
It consists of social ,political, economic, legal and technological factors such as change in taxation , fashion, taste the consumers, increased competition , etc, which affect the working of a business significantly.
Difference between specific and general environment :
Specific environment :
- It effects individual enterprises directly.
- Investors, customers,competitors and suppliers are the examples of specific environment.
General environment :
- It has impact on all the business enterprises.
- social, political, legal and technological conditions example of general environment.
Features of business environment :
1.TOTALITY OF EXTERNAL FORCES :
Business environment is aggregative in nature because it is the sum total of all things to business enterprise.
2. SPECIFIC AND GENERAL FORCES :
Business environment includes both specific and general forces.
3. INTER RELATEDNESS :
Different elements of business environment activity interrelated. E.g increased awareness for healthcare have increased the demand of many healthcare products like sugar free ,diet Coke , cholesterol free oil, etc.
4. DYNAMIC NATURE :
Business environment is dynamic in nature as it keeps on changing whether in terms of upgradation of technologies, shifts in consumer preference , change in government policy or changes in trends and traditions.
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Answer:
Specific environment refers to those external forces that affect an organisation directly. ... General environment refers to those external forces which affect all the organizations. They do not have any effect on a particular organisation. For example, a change in the political condition that affect all the companies.