state any three points which clarify how understanding of business environment help managers
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Answer:
Failure to understand the environmental factors for business shall create number of problems, which in fact are difficult to solve. It will reduce the profit margin and will make the opportunities for expansion to slip. But a proper appreciation of the environmental factors will bring many benefits. They are as follows:
1. Successful Conduct of Business
The business executive can successfully conduct the business operation. Since chances for losses are minimized, the firm can withstand in the long run, widen its financial base and face competition more effectively. All these finally lead the business venture to a grand success.
2. Opening of New Avenues
Environment opens fresh avenues for the expansion of new entrepreneurial operations. When the business climate is favorable, new ideas, schemes and ventures may be put into action. The firm can utilize its resources advantageously and derive the maximum benefits.
3. Chances for Growth
By identifying itself with the changing situations and environment, the firm can gain the popular support and win the confidence of the consumers and others. This popular support will produce many chances for growth and development of the firm.
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