Q16. Which of the dimension of business environment have NOT been
mentioned in the above case:-
Answers
Business Environment: Definition
The term ‘business environment’ means the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its performance.
Importance of Business Environment
It enables the firm to identify opportunities and getting the first mover advantage instead of losing them to its competitors.
It helps the firm to identify threats and early warning signals which are likely to hinder a firm’s performance and take timely actions.
It helps in tapping useful resources as the enterprise designs policies that allow it to get the resources that it needs so that it can convert those resources into outputs that the environment desires.
It helps in coping with rapid changes as the managers are able to understand and examine the environment and develop appropriate courses of action.
It helps in assisting in planning and policy formulation as its understanding and analysis can be the basis for deciding the future course of action or decision making.
It helps in improving performance of an enterprise through continuous monitoring of the environment and adopting suitable business practices which help to improve both their present and future performance
It helps in improving performance of an enterprise through continuous monitoring of the environment and adopting suitable business practices which help to improve both their present and future performance
Features of Business Environment
It is a sum total of all the forces external to business firms.
It consists of both specific forces such as investors, customers, competitors and suppliers which affect individual enterprises directly and immediately in their day-to¬day working and general forces such as social, political, legal and technological conditions which have impact on all business enterprises and thus may affect an individual firm only indirectly.
All the elements of business environment are closely interrelated.
It is dynamic in nature and keeps on changing due to technological upgradations, shifts in consumer preferences or increase in competition in the market.
It is highly uncertain as it is not always possible to predict future happenings, especially when environment changes are taking place too frequently as in the case of information technology or fashion industries.
It is complex in nature as it is relatively easier to understand in parts but difficult to comprehend in its totality because it consists of numerous interrelated and dynamic conditions or forces which arise from different sources.
It is a relative concept since it differs from country to country and even region to region