Concept of Business Environment

Contents

Concept of Business Environment

After discussing the concepts of ‘Business’ and ‘Environment’ we will explain the concept of ‘Business Environment’.

Business, now-a-days is vitally affected by the economic, social, legal, technological and political factors. These factors collectively form business environment. Business environment, as such, is the total of all external forces, which affect the organization and operations of business.

Important definitions of the term Business Environment are as under –

“Business environment is the aggregate of all conditions, events and influences that surround and affect it”. – Keith Davis

“The term Business environment of a company is defined as the pattern of all external influences that affect its life and development.” -Andrws

“Business environment consists of all external and internal factors that influence the complex interaction of the market, production and finance – the basic components of the business worlds.” – J. A. Kritz and C. T. Duggan

Thus, Business environment is a set of political, economic, social and technological forces that are largely outside the control and influence of a business and that can potentially have both a positive and a negative impact on the business.

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