7/31/2019 Features of Business Environment

1/1

Features of Business Environment

(1) Environment is the Surrounding Situation: Business environment means the surrounding situation within which

business organization has to operate. It is a sum total of cultural, political, economical, social, physical, technological,

legal and global forces which move around the business organization. These forces collectively create a socio-

economic-political situation called business environment. Environment is an inseparable part of business which can

not operate in vacuum.

(2) Environment is Complex: Business environment has now become extremely complex and the governmentintervention has become more frequent. Business environment is a complex phenomenon and also difficult to grasp

and face in its totality. This is because it is governed by external factors. Environment develops by chance and not by

choice. In addition, the environment factors vary from country to country. The business environment in India and in

USA may not be identical.

(3) Environment is Dynamic: Business environment is dynamic and perpetually evolving. It changes frequently due

to various external forces i.e. economic, political, social, international, technological and demographic. Such

dynamism in the environment brings continuous change in its character. Business enterprises have no alternative but

to operate under such dynamic environment. The only remedy is adjust business as per environmental changes.

(4) Environment is Multi Faceted: Environmental changes are frequent but their shape and character depends on the

knowledge & experience of the observer. A particular change in the environment may be viewed differently bydifferent businessmen. This change is welcomed as an opportunity by some organizations while some others take it as

a threat for their survival.

(5) Environment has Long Term Impact on Business: Environment has long lasting impact on functioning of

business organizations. Their growth and profitability depends upon the environment under which they have to

operate. Environment influences business enterprises. Such influences may be positive or negative & may affect the

profitability, efficiency & development of business.

(6) Environment Needs Minute Study by Business Organizations: Every business organization has to study

changes constantly taking place in the environment forces. This facilitates easy adjustments of business as per

environmental changes. Such adjustment is necessary for its survival and growth. Environmental factors are, by and

large, external as well as uncontrollable. In view of these constraints businessmen have to study the environmentminutely and face it boldly. The success of business depends on its ability to adjust itself with the local, national and

international environment.

(7) Environment Influences Business Organization: Business organizations have limited capacity to influence

business environment as it is the result of government policies and social and technological changes which are

basically external variables.

(8) Environment and Business Planning go Together: Business environment and business planning are closely

related concepts. In fact, planning is necessary in order to derive maximum benefit from favorable environment.

Similarly, planning is useful for dealing with the problems created by unfavorable environment.

(9) Environment needs Adaptability: Business have to learn adjust with ever changing business environment. One

of the basic laws of nature is that adaptability is the price of survival. In the prehistoric ages, the dinosaur and the

mastodon two of the strongest and largest animal that ever lived, perished, while the insignificant cockroach

survived. The reason was that those mighty animals could not adjust themselves to changes brought about by the

passage of centuries, while the cockroach could. Businessmen have to adjust with the prevailing environment. This

adaptability is the price or the key survival in the business world.

(10) Business Environment Changes Regularly: The environment factors changes regularly. The business

environment in India is totally different as was in past. Future environment is the product of past & present environ