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Chapter 1
Chapter 1
CHAPTERCHAPTER-1
BUSINESS ENVIRONMENT
Business Environment Consist Of All Those Factors That Have A Bearing On The Business
INTRODUCTION
1. 2.
Business environment is a wide concept. Business firm is a micro economic unit. Every firm operates under the given environmental atmosphere. There are some factors that affect the activities of business. The firm individually cannot operate by avoiding these factors however the firm have to work under this given environment. A firm has to get adaptability with two types of factors: Internal environmental factors External environmental factors
INTERNAL ENVIRONMENT
BUSINESS DECISION
EXTERNAL ENVIRONMENT
TYPES OF ENVIRONMENT
Environmental factors may classified into two types of environment The internal environment The external environment
1. 2.
INTERNAL FACTORS
The internal factors are generally regarded as controllable factors because the company has control over these factors It can alter or modify such factors as its personnel, physical facilities, organization and functional means, such as marketing mix, to suit the environment.
EXTERNAL FACTORS
The external factors are beyond the control of a company. The external factors are such as the economic factors, socio cultural factors, government, legal factors, demographic factors etc.
A firm may not sometimes have complete control over all the internal factors. Also it is sometimes possible to change certain external factors Some of the external factors have a direct and intimate impact on the firm (suppliers and distributors) These factors are classified as micro environment factors. These factors also known as task environment and operating environment. There are other external factors which affect an industry very generally (industrial policy, demographic environment, general environment) These factors are classified as macro environment factors. These factors are also known as general environment or remote environment
INTERNAL ENVIRONMENT MICRO ENVIRONMENT/TASK ENVIRONMENT/OPERATING ENVIRONMENT MACRO ENVIRONMENT/GENERAL ENVIRONMENT/REMOTE ENVIRONMENT