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Political Factors Affect Business Environment

There are many external environment factors affect business negatively and
positively. Business managers must address these factors and make decisions that
minimize the impact of external environment. These factors include political
factors, economic, social, technological, legal and environmental also known as
PESTLE Analysis.

Political factors and environment of a country impacts any business organization

and can also introduce a risk factor can cause the business to suffer losses or
compromise over its profit stream. Political environment can change because of the
policies and actions of the prevailing government at every level, federal to local
level. It is very important that a business should plan for the variability in the
policies and regulations of the government to maintain a stable business
environment.

Definition
Political factors are government regulations that influence business operation
positively and negatively. Managers must keep a bird’s eye view over political
factors. These factors may be current and impending legislation, political stability
and changes, freedom of speech, protection and discrimination laws are factors
affecting business operation and activities

How Political Factors Affecting Business

Environment
Political factors can impact a business by making the market environment more
or less friendly for that business. Typically, governments have a great deal of
power over businesses and many times, there is not much that businesses can do
about it.
Political factors can impact businesses in various ways. These external
environmental factors can add in a risk factor which can lead to a major loss in
business. These factors can change the entire results and hence, companies should
be able to deal with both local as well as international political outcomes.

In addition to this, political factors not only have a direct impact but, it also
impacts other factors as well which can have a significant effect on the business
and its operating environment. There are certain factors that create inter-linkages in
several ways like:

 Political decisions affect the socio-cultural environment of the country.

  Political decisions have an impact on the economic environment.
 Politicians can also influence the acceptance of new technologies.
 Politicians can also influence the rate of development of new technologies.

What Political Factors Affect Business Environment

With a change in administration policies, there arise political factors that can
change the entire business scenario. These changes can be economic, legal or
social and can include the following factors:

 Tax and economic policies: Increasing or decreasing rate of taxes is a good

example of a political component. Government regulations may raise the tax
rate for some businesses and can lower the same for others due to specific
reasons. This decision will directly impact businesses. This is why
maintaining a strategy which can deal with such situations is very important.

 Political stability: Lack of political stability within a country can

significantly impact the operations of a business. This can especially be true
for businesses that are operating on the global scale. For instance, a hostile
takeover can take over a government. Eventually, such a situation will lead to
looting, riots and general disorder within the environment. Such situations
can disrupt business operations and activities which can have a major impact
on its bottom line.

 Foreign Trade Regulations: Every business has a need to expand business

operation to other countries. However, political background of a country can
influence the desire for a business to expand its operations. Tax policies that
are particularly controlled by the government can induce a particular business
to expand operations in different regions whereas; other tax policies can
hinder the process of business expansion for some industries. Government
initiatives, which have been designed to support local businesses, might work
against international companies when the question is of their competitiveness
in a foreign region.

 Employment Laws: Employment laws are made to protect the rights of

employees and include every aspect of employer/employee relationship.
Employment law is an aspect that is very complex and involves several
pitfalls as well. When businesses’ are in touch with the latest developments in
this law, they can manage to take their business in the right direction
however, those who get it wrong needs to be completely prepared for the
expensive results it will generate. In modern corporations, employees are
almost 98% of the company for the accomplishments or lack thereof and any
 changes within employment law will, of course, have a great impact on the
business operations.

Example Political Factors Affecting Nike

Conducting a macro environment analysis, a good example of how political factors

have affected a business can be associated with Nike. Nike is globally recognized
athletic apparel, footwear, sports accessories and equipment. Nike has been very
fortunate as the government of the United States have formulated such policies that
will foster the growth of businesses. The company is enjoying stable currency and
low-interest rate conditions along with very competitive tax arrangements that help
the company in advancing growth. US government has taken initiatives with
respect to transparency in the global value chain and Nike has greatly benefited
from this. However, Nike is facing hard times in its outsourced manufacturers in
other regions like Indonesia, Thailand and Vietnam where there is an increase in
political unrest.

ECONOMIC ENVMT

There are varying internal and external factors that have an impact on
businesses of all types and affect their financial performance. The combination
of small-scale and large-scale factors that can affect a company's profits is
known as the economic environment. If you're interested in a career in
economics, finance or business, it can be useful to understand exactly what
these factors entail and how they can affect different types of businesses. In this
article, explore what an economic environment is, list some of the factors that
contribute to it and provide some examples to help you understand.

The answer to 'What is an economic environment?' is

essentially the various economic factors that can
affect a company's profit and performance. These are
different depending on the nature of the business in
question. For example, factors such as the weather
might affect an agricultural business, as significant
changes could affect the growth of the crops. For a
newspaper business, factors such as the rise of the
Internet would be more likely to have an effect
because online media competes with newspapers
when advertising business. The economic
environment a company operates in includes both
macroeconomic (large-scale) and microeconomic
(small-scale) factors.

Microeconomic factors
The microeconomic environment refers to factors that have an
effect at the individual company or consumer level. They don't
affect the whole economy but can have an effect on particular
companies. Examples of microeconomic factors include:

 Competitors: Companies may see an impact on their

profits when the number of competitors in the market
changes. For example, if a new company opens that
sells a similar product at a lower rate, the more
expensive company might lose business.
 Demand: Various external factors can affect how much
demand there is for a company's products or services,
which can significantly affect its bottom line. For
example, a company that makes accessories for a
piece of technology would be likely to rethink its
strategy if that technology became obsolete.
 Market size: Market size refers to the total possible
number of sales a company can make, often over the
course of a year or other economic period. If the market
changes, it can affect the company's profits.
 Suppliers: Companies that sell products may
experience changes to their microeconomic
environment if there is a change in the materials or
 services that their suppliers can provide. This might
mean that they decide to find a new supplier.
 Supply: Changes to the availability of a particular
material that a company uses to make its products
might influence its profit margins.
 Distribution chain: Companies use various methods to
distribute their products, for example, by selling them
over the Internet or in shops. If there are any changes
to these distribution methods, such as a chain of shops
going out of business, this can affect the company's
financial performance.
 Availability of employees: All businesses need
employees to make, promote and sell their products or
services, and a change in the availability of people with
the right skills can have a big effect on a company. For
example, tech companies might need employees with
very specific skills, which could cause a problem if
these become less readily available.
 Availability of investors: Many companies rely on
shareholders and investors to provide funding. If an
investor drops out or there are fewer people investing
in companies in a certain area or business, this could
badly affect a company's ability to do business.
 Media and community: The way in which local media
and the community more widely perceive a company
can also have an effect on the company's success. Bad
press can negatively affect a company's bottom-line,
while companies that provide employment, pay taxes
and operate with social and environmental awareness
are likely to be respected within their community.

Macroeconomic factors
The macroeconomic environment concerns the economy and
includes large-scale factors that can affect many different
companies. Examples of macroeconomic factors include:
 Unemployment rates: A country's employment rate can
have an effect on the economy. A low rate of
unemployment generally indicates that the economy is
healthier.
 Inflation: Inflation describes an increase in the cost of
goods in an economy that occurs over time. Rapid
inflation is generally seen as a sign of economic
instability, while gradual inflation is a normal economic
factor.
 Interest rates: Interest rates refer to the amount of
return that money invested in a country's financial
system generates. High-interest rates indicate that the
country's currency has a higher value.
 GDP growth: GDP, or gross domestic product, is the
overall value of the goods and services that a country
produces. Economists usually calculate this annually as
a way of measuring the health of the general economy
in a country.
 Taxes: Companies are liable for various taxes and
charges that the government sets. Changes to the rates
companies pay can have an effect on the economy.
 Exchange rates: It's a normal factor of the economy
that exchange rates between different currencies
fluctuate over time. A rapid change in the exchange
rate can indicate a weak economy.
 Customers' discretionary income: Societal changes
can affect the amount of extra income that customers
have available after paying expenses such as rent and
utilities. This can have an effect on the economy, which
can become weaker if consumers have less money to
spend.
 Retail sales: Retail sales indicate how much the
population of a country is spending as a whole and is an
indicator of an economy's health. Business traders can
watch spending reports to determine whether retail
sales have dropped, which could show that the
economy is in trouble.
  International trade: The level of international trade
that a country is doing can also be a clue as to the
state of the economy. Countries that export more
products than they import can raise the price of their
goods as there is a strong demand for them, indicating
a healthy economy.
 Environmental factors: Environmental factors, such as
natural disasters, can also have an impact on the
economy. For example, spending in certain industries
might decrease after a natural disaster, such as an
earthquake, while other industries might experience an
increase in sales.

What does social environment mean?

Social environment depends on the social constructs (generally accepted ideas and
characteristics) of the target society. It is made up of factors such as beliefs, traditions,
ethnicity, occupation, disposable income, consumption trends, and gender of consumers and
the general public.
What are the components of social environment?
The social environment is made up of components specific to the immediate population
within which the business operates. These components include occupation, organizational
structure, age, income, consumption patterns, internal customs, gender, and ethnicity.
Social Environment of a Business
What is the social environment of a business? The social
environment comprises the beliefs, desires, values, and attitudes of
consumers and public members. Other social environment examples are the
consumption patterns, desires, and behaviors of the market. This social
environment definition includes demographic factors of the market, such as:

 Occupation
 Age
 Income
 Consumption patterns
 Gender
 Ethnicity

The social environment depends on the social construct of the target

society. In this case, social construct refers to the ideas that are generally
accepted by the people. The social construct of the environment a business
operates in contributes to its success or failure. Specifically, social
environment factors influence key stakeholders, such as the employees and
customers, ultimately shaping business decisions, strategies, opportunities,
and challenges. Moreover, this environment impacts business performance
and productivity. To maximize business opportunities and address emerging
challenges, businesses must promote a positive social environment that
encourages harmony, stability, confidence, and productivity.

Notably, the social environment is a construct that depends on the immediate

population. It is a stark contrast to the natural environment. Some prevailing
social aspects are similar across cultures, but others differ entirely. For
example, an American visiting the United Kingdom may encounter a similar
social environment, but he will find a stark distinction to Western culture in
Russia or China.

Organizations must leverage social factors to maximize opportunities and

limit challenges. Nonetheless, not all aspects of the social environment can
be controlled or manipulated. These aspects are categorized as external or
internal social environment.

 External social environment — Comprises aspects that are beyond the

business's control. Society at large creates its prevailing external
factors. Operating in a multicultural social environment is more
complicated because of diverse communities with unique customs,
traditions, and values.
 Internal social environment — this social environment is specific to the
organization. It comprises the beliefs, customs, behaviours, attitudes,
values, and practices of employees and the management. Businesses
have direct control over their internal social environment.

Effects of External Social Environment

The external social environment of a business heavily impacts its strategic
operations. For this reason, firms must adapt and leverage the dominant
external social factors to enhance chances of business success. The
business must demonstrate an in-depth knowledge and understanding of the
target market's social preferences, needs, and wants. Unfortunately,
companies cannot change these social preferences, so the best option is to
adjust and align their strategic decisions with the demands of the society
they operate within.

Businesses need to keep track of the external social environment to

recognize opportunities and challenges. Keeping track will help the
management identify any potential concerns and address them before they
become an impediment to business success. Failure to do so may negatively
affect the business's operations, employees, and ultimately, revenue
generation. Notably, internal or external business environments are subject to
radical fluctuations. For this reason, managers and corporate leaders must
track these changes to minimize their adverse consequences and maximize
opportunities.
The word ‘technology’ is usually associated with the techniques, tools,
devices, and knowledge surrounding it. Technological developments and
changes raise threats and opportunities for companies. And it usually
happens quickly and dramatically, making the old obsolete and therefore
abandoned and disrupting business.

Why is the technological environment important?

The technological environment influences business success in several
ways. And in general, changes and developments create opportunities or
threats to the business.

But, just like any other external factor. Companies cannot control
technological factors. They can only respond to minimize threats and
optimize opportunities. Thus, they must be able to adapt to new
technological developments.

Flexibility and responsiveness in adapting to new technologies are

essential. Early adopters often achieve a higher market share and earn
higher returns. They scan trends and technological changes to map
potential opportunities and threats, including their impact on the competitive
landscape.

Threat and opportunity scanning is the first step before a company

formulates a strategy. After understanding what threats and potential
opportunities are coming, they try to utilize or build new resources to
maximize internal strengths to optimize opportunities while minimizing
threats to internal weaknesses. That way, the company can build a
sustainable competitive advantage.

Several reasons explain why the technological factor is important. Let’s

take three reasons.

First, technological changes have brought new business models and made
old ones irrelevant. A good example is how e-commerce replaces the
“brick-and-mortar” business model.

Second, new technologies contribute to changes in production processes.

It is not only related to more advanced machines and equipment. But, it
also stimulates companies to develop new, better techniques because
technology often makes what was once impossible possible. Computer
Aided Manufacturing (CAM) is an example.

Third, technological changes advance communication channels.

Information technology contributes to reducing operating costs and time,
operating efficiency, and becoming a critical managerial tool in business
decision-making. For example, email allows companies to send messages
to suppliers instantly without going through the mail. The Internet has made
it possible for businesses to adopt the official business concept.

How technology factors impact the business

Technological changes not only affect products and how they are
marketed. But, it also affects business in several ways.

For example, in a production process, technology can increase total output

through increased productivity. Companies can produce more output per
unit with the same inputs as before.

In addition, new technologies contribute to reducing operating costs. For

example, adopting robotic technology reduces labor. In addition, it also
reduces waste with higher precision and reduces human errors.

Increases in output and cost reductions ultimately contribute to increased

supply, product variations, and reduced prices. Thus, consumers have
more choices to match the money in their pockets.

The technology also allows companies to produce new products. For

example, internet technology enables book publishers to launch e-books.

Although some have positive impacts, technological advances also pose

risks and threats to business. It makes old products obsolete faster. For
example, smartphones with high-resolution cameras reduce interest in
conventional camera products, making them all-purpose.

Now, let’s break down how technological changes are affecting business.

Product selling techniques. For example, more stores are turning online.
The change had a significant impact on their sales strategy.
Product manufacturing method. For example, automation through
robotics and computer-assisted machines replaces human hands.

Market research. Advances in technology gave rise to what we call big

data. Marketers find it easier and more accurate to analyze the market with
database systems because they can access more data, enabling them to
plan their marketing better.

Company management and operations. For example, the Internet and

electronic devices have led to remote working, such as working from home,
as a common practice today. So, employees do not need to come to the
office to work. Instead, they can do it at home, as long as they are
connected to the Internet.

Ways to communicate. Many new channels are emerging to facilitate

companies in communicating with stakeholders. Websites, social media,
and email are examples.

Need for new expertise. For example, companies increasingly need data
analysts and programmers to collect, process, and interpret data and
process digital information. They are increasingly required to develop data-
driven decision-making.

Changing consumer needs and wants. For example, buying a data

package for communication services is a new need for consumers because
they must stay online daily.

Changing consumer behavior. For example, the Internet makes

consumers more price-conscious because they can easily and
inexpensively compare products without physically seeing them.

Bring up new competitors. Technology gives rise to competitors with new

business models. E-Commerce is a good example.

Examples of how technological change is

transforming business
Research and development (R&D) has driven innovation in various
business areas, including those related to products, business processes, or
production techniques. The results are 3D printers, smartphones, electric
cars, and self-driving cars.
Big data allows companies to access more accurate data, which enables
them to plan and make better decisions.

Technology allows companies to capture data from various sources,

including internal networks, websites, and social media. Advances in
analytical techniques, software, and computer processing capabilities have
allowed them to extract deeper information from this data.

E-Commerce allows consumers to shop anywhere and anytime via their

smartphone. It saves them cost and time.

For example, they no longer need to visit a retail store. In addition, they find
it easier to compare prices between products, reducing switching costs and
strengthening their bargaining power.

Robotics allows companies to design, construct, and operate production

facilities with minimal human assistance. That enables them to produce on
a mass scale. In addition, precision increases due to less human error.

3D printers allow us to quickly create models and product prototypes. We

can also use them to make jewelry, tools, and toys.

Social media changes the way consumers interact with others. Moreover,
it facilitates them to disseminate information more quickly, cheaply, and
massively. For example, companies use it to stay connected with their
consumers.

In addition, social media gave rise to viral marketing. Companies design

engaging messages and encourage consumers to share them. The impact
can be significant due to its wide exposure, making products popular
quickly with low promotional costs.

Introduction

Business activity has been a basic process of society since humans

found the barter system. Like all other societal processes, business
activity and allied processes have also evolved. Technological
advancements and changes have played an instrumental role in
evolving business processes and activities.
The impact of technological change on business activity has been
significant since the emergence of the internet. Through the use of
information technology, consumers may purchase from anywhere in
the world with the touch of a button. Small firms can now compete
on an equal footing with larger organisations because of the
development of technology.

Servers to mobile devices are utilized by small enterprises to acquire

an advantage in the market and strengthen their competitive
edge.This article discusses about the impact of technological
change on the business activity in the broader sense

Modern Communication Technology

With the aid of technology, communication has been continually

evolving. Communication is a basic need as well as the capability of
people. In the business world, communication is essential for
coordination, and quick communication is essential for maximising
productivity.

Modern communication trends for company activities are produced

by the adoption of cutting-edge telecommunications and internet
technologies, which enhance internal business efficiency and
coordination. Modern communication technology benefits
organisations both inside and externally.

Today's communication tools and applications, such as Microsoft

Teams, Zoom, etc., make it possible for huge teams to work
together and efficiently finish complicated projects. Communication
tools serve a wide range of commercial and professional activities,
from webinars for clients to business meetings with workers.

Remote Work Environment

The transition from physical to digital workplaces has also been

aided by technological advancements. With the aid of technology,
not just procedures but also workspaces are becoming remote and
digital. Technology use has a significant impact on workplace
culture in corporate organisations. The majority of contemporary
firms are moving towards a hybrid or remote work culture that
offers professionals work freedom.

Positive Impact on Employees Productivity

The positive effects of technology on business operations include

increased employee productivity and a decrease in the need for
manual labor in many processes. Any company's success or failure
will be significantly influenced by how technology affects business
activity. Businesses that adopt new technologies have the potential
to lower costs and boost profits. These technological improvements
can even reduce the cost of a service.

Conclusion

Earlier, a company would need to invest thousands of dollars to

start a business. But thanks to technological advancements, the
world has become more accessible. In addition, it allows businesses
to make better decisions. A business’s ability to adapt to changes is
essential.

In addition, new technologies provide a better work environment

for employees. Some industries are more responsive to the latest
changes than others, while others are more resistant. If businesses
are unable to stay abreast of the latest trends, they can lose their
competitive advantage.

How Legal Factors affect Business Environment

The business legal environment plays a very important role in determining the
success of any businesses around the globe. The government taxes that are being
imposed among other regulatory measures help to promote economic growth and
to protect consumers from exploitation and other illegal factors. Prior to
establishing or when in the process of running a business, accordingly,
it is imperative to understand the role of regional tax measures, legal factors
affecting business and regulatory measures in the determination of how your
business is affected. Another measure to help your business adapt to legal issues in
its environment is the understanding of regulatory measures and to account for all
your regional economic analysis.

Business Legal Environment Definition

In the legal environment of a business, we are looking the key areas, particularly
where law changes and how legal aspects affect businesses. All these legal factors
are contained in the legal environment of a business.

Legal Factors Affecting Business Environment

Organizational Law
The organizational law is the first type of business law that we will talk about here.
Any business that is organized as a legal entity is subject to the state law that
governs its operation and conduct. There are different types of business entities.
For example, corporations, limited partnerships, partnerships, limited liability
partnerships, limited liability limited partnerships and limited liability companies
all of which have different legal status and issues.

Securities Law
If a business is seeking to obtain financing through different types of investors, it
may be subject to legal issues such as security law. For instance, a decision to offer
promissory notes, a type of loan to your investors, will subject the legal factor
affecting business to state and federal regulations and security laws.

Every company issues securities and a growing body of law suggests that non-
manager interest in a limited liability company is also considered to be securities
legal factors. As it is, most small businesses should not worry about business legal
factors like federal and state security laws affecting them negatively. But if such a
business has plans to raise capital through platforms such as public offerings or
online funding.

Contract Law
If the intention is to enter an agreement with another person or entity, then contract
law is binding. This also has a special area that is involved directly with factors
affecting business, for example, government contracts, which is also known as
government procurement laws.
Consumer Protection Laws
Some businesses act unfairly towards their consumers. For this reason, most
countries have consumer protection laws that are aimed at ensuring that consumers
are protected. Here are examples;

 Weight and Measures Act: These laws ensure that the goods sold are
weighed on Standard weighting equipment.
 Trade Description Act: This law ensures that it is illegal to deliberately give
misleading impression about products.
 Consumer Credit Act: According to this Act, consumers should be given
information of the credit agreement and should be made aware of the interest
rates, length of loan while taking a loan.
 Sale of Goods Act: This Act declares that It is illegal to sell products with
flaws or problems and that any goods sold conforms to standards.
Employees Protection laws
Different governments have passed laws to protect the interest of employees. These
laws protect them against unfair discrimination at work and when applying for
jobs. It ensures that no one is discriminated against on the basis of such things as
race, religion, sex, age, or colour.

Laws regarding health and safety at workplaces

Below are a few laws in regards to employees’ working conditions

 Employees receive protection from dangerous machines.

 At the workplace, employees should be given clothing and equipment that
meet the highest safety standards.
 Employees should have a reasonable temperature at their workplaces.
 The highest hygienic standards at the workplace and washing facilities should
be met for the sake of employees.
 Employees to have enough breaking periods while working.
Security against haphazard termination of employees
It is illegal now for businesses to dismiss the employees for joining trade unions or
for expecting a baby unless you choose to ignore the new legal factors in business
which will have repercussions on your business. Before dismissal of any worker,
there has to be warning with proper reasons, otherwise, the case may be treated as
an unfair dismissal.

Immigration Laws
After a pestle analysis research, economists concluded on findings that aspects of
immigration positively contribute to a society. For instance, lately, American
societies have shifted to a more educated, high tech lifestyle. Therefore, only a
few of these well-educated citizens are willing to work at low paying jobs such as
janitors and farm workers (The Immigration Debate).
The immigrants that come to the United States are usually willing to work at these
low wage jobs that most Americans would not be comfortable doing. So, if it
happened that the United States did not have the immigrants willing to work these
jobs, businesses would be limited to two options; close their business or raise
wages.

In this case, the immigrants provide a ready source of relatively affordable labour
that keeps the cost of business low and elevating profits. More labour leads to more
output thereby leading to consumers buying more products. All these legal factors
affecting businesses contribute greatly to the gross domestic product of the United
States.

Government Procurement Laws

The government, through its contracting rules regulations and procedures, dictates
the way businesses work with it. It not only actively encourages small businesses
to participate in expressing interest when it purchases products and services, but it
also goes to great lengths and spends lots of money in outreach programs to find
good, qualified small businesses to be its suppliers in order to avoid legal factors
that would affect their business. Normally, it provides information that helps small
businesses to bid with minimal risk, thereby managing the legal factors in the
business.

Just for the noting; you can find out how much the government bought the last 5 to
10 times, who they bought from, and how much they paid. If you tried looking for
such information elsewhere as legal factors in business, it will be very hectic for
you to get

Environmental Factors Affect Business

Marketing strategy is a very important aspect of making a business successful. The
absence of a clear strategy, setting up meaningful objectives and goals can be very
difficult. While drafting a Marketing strategy, conducting a macro environment
analysis within which the business is operating will help in determining the
outcomes of a strategy. This analysis includes political, economic, social-cultural,
technological, legal and environmental factors that affect business.
To analyze the six macro factors, we conduct PESTLE analysis and SWOT
analysis. These strategic analysis tools consider all the factors that may affect the
business operations. This is worth mentioning that PESTLE analysis responds to
external factors while SWOT analysis responds to both internal and external
factors to the organization.
Definition of Environmental Factors
Environmental factors can be explained as identifiable elements within the cultural,
economic, demographic, physical, technological or political environment which
impacts the growth, operations and survival of an organization. Environmental
factors can be both internal as well external for the business. External factors can
include economic and technological factors whereas; internal factors may include
value system, objectives or internal relationships of a business.
How Environmental Factors Affect Business
Every business, whether large or small, is affected not only from internal
organizational factors but, from several external factors. Company have no
control on external environment. Developing marketing strategies should include
considering environmental factors so an accurate picture of the market trends and
environment can be presented and to understand as to where the company is
standing. Ignoring environmental aspects is similar to walking on a path where
there are unsuccessful marketing and lost revenues which can ultimately impact the
health of the business brand.

Examples of Environmental Factors Affecting

Business
Environmental Policies. Environmental policies are considered the major external
factor that can impact the strategy of a business. Environmental policy is the
commitment of a business to the regulations, laws as well as other policy
mechanisms that are concerned with environmental issues. Environmental policy
impacts businesses because the law implies organizations to change their
operational procedures and equipment so as to meet those standards which can cost
businesses some good amount of money.
Climate Change. Climate change became an insidious threat to businesses as its
pace can be recognized only when it is taken into consideration on the basis of
decade-after-decade. Increasing issue of global warming and adverse weather
conditions in the recent few years, it is difficult for companies and organizations to
operate equally in every type of weather condition. Businesses that are directly
dependent upon adequate water supply e.g., field sports or agriculture will be
affected adversely if climatic changes resulted in reduced rainfalls. Even
consumers are becoming aware and keen about this factor and are prone towards
those brands which are saving the environment or supporting this cause.
Green Agenda. Business-related activities impact the environment; however, the
environment also has an effect on businesses and the market environment. Now
enterprises have realized that in order to achieve business goals, there is a need to
draft environmental-friendly policies. Green agenda is a plan where enterprises
manage their operations in such a way so that there is minimal negative impact on
the local or global environment. In order to be environmentally responsible,
corporations need to devise plans and procedures in their operations and activities
which is beneficial not only company but, for the overall environment as well.
Pollution. Pollution can also have an impact over business strategies. Pollution
may cause some major environmental events which can result in the disruption of
supply chains or an increase in the cost of raw material. Organizations need to
monitor such events and develop contingency plans so as to deal with them.
Availability of natural resources. Amongst external environment factors, this
factor refers to the physical environment of a business. Natural resources are very
important for most businesses and many corporations have natural resources as
their major raw material. Lack of natural resources can hinder an organization’s
producing ability and hence its output.
Recycling. Recycling is another aspect of a greener environment. The cost of
dumping waste in landfills is increasing and is resulting in not only shortage of
wastages but, it also provides harm to the environment. Recycled materials not
only results in making the production process cost-effective but, it also helps the
business to save some money and helping the environment.
Waste Disposal. Although, there has been a positive trend towards recycling of
waste materials, still there is several businesses which dump wastage in landfills.
This not only increases their cost of dumping waste but, is also harmful to the
environment in which the business operates. Businesses, in order to meet their
bottom line, should first look at producing less waste and use fewer resources
which will reduce their production cost along with making the corporation
sustainable.
Examples of How Environmental Factors
Affect Tesco
Companies are facing increased pressure by government agencies to address
environmental issues. furthermore, companies must respond to these issues in ways
that benefit society.

Now Tesco encourages its consumers to shop at tesco.com. Tesco Van Drivers will
not only use fuel-saving routes but also collect unwanted plastic bags from
customers and recycle them.

Also, Tesco is committed to use renewable sources and generate 100% of its
electricity by 2030. The company promises to minimize upto 50% carbon footprint
by 2020.