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    Business Environment and Its Classification

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    Nina Adhikari
    The document discusses business environment and how it can be classified. It defines business environment as the sum of all internal and external factors that influence a business such as employees, customers, suppliers, management, activities of the government, social trends, and economic changes. It then classifies business environment into two types: internal environment and external environment. The internal environment includes plans and policies, human resources, financial resources, relationships, labor management, and technologies within a business. The external environment consists of the micro environment such as customers, suppliers, competitors, and public, as well as the macro environment like economic, political, socio-cultural, and demographic conditions.

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    Business Environment and Its Classification

    Uploaded by

    Nina Adhikari
    247 views2 pages
    The document discusses business environment and how it can be classified. It defines business environment as the sum of all internal and external factors that influence a business such as employees, customers, suppliers, management, activities of the government, social trends, and economic changes. It then classifies business environment into two types: internal environment and external environment. The internal environment includes plans and policies, human resources, financial resources, relationships, labor management, and technologies within a business. The external environment consists of the micro environment such as customers, suppliers, competitors, and public, as well as the macro environment like economic, political, socio-cultural, and demographic conditions.

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    The document discusses business environment and how it can be classified. It defines business environment as the sum of all internal and external factors that influence a business such as employees, customers, suppliers, management, activities of the government, social trends, and economic changes. It then classifies business environment into two types: internal environment and external environment. The internal environment includes plans and policies, human resources, financial resources, relationships, labor management, and technologies within a business. The external environment consists of the micro environment such as customers, suppliers, competitors, and public, as well as the macro environment like economic, political, socio-cultural, and demographic conditions.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    247 views2 pages

    Business Environment and Its Classification

    Uploaded by

    Nina Adhikari
    The document discusses business environment and how it can be classified. It defines business environment as the sum of all internal and external factors that influence a business such as employees, customers, suppliers, management, activities of the government, social trends, and economic changes. It then classifies business environment into two types: internal environment and external environment. The internal environment includes plans and policies, human resources, financial resources, relationships, labor management, and technologies within a business. The external environment consists of the micro environment such as customers, suppliers, competitors, and public, as well as the macro environment like economic, political, socio-cultural, and demographic conditions.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Strategic Management

    1) What is Business environment?


    Answer: Business Environment is sum or collection of all internal and
    external factors such as employees, customer’s needs and expectations,
    supply and demand, management, clients, suppliers, owners, activities by
    government, innovation in technology, social trends, market trends, economic
    changes, etc.
    In a simple form all the internal and external factors that create opportunities
    and threats towards the business either directly or indirectly can be defined as
    business environment.
    Some external factors even though they are outside the business boundaries
    effects the business or brings changes in working environment.

    For example: Changes in taxes by the government can make the customers
    buy less number of products. Here the business would have to re-establish its
    prices to survive the change. Even though the business had no involvement in
    initiating the change it still had to adapt to it in order to survive or use the
    opportunity to make profits.

    2) Classify the Business Environment?


    Answer: Business environment can be classified into two types and they are
    as follows.
    Internal Environment External Environment
     Plans & Policies  Micro Environment
     Human Resources :Customers
     Financial Resources :Suppliers
     Relationship :Competitors
     Labour Management :Public
     Technologies & Resources
     Macro Environment
    :Economic activities
    :Political
    :Socio cultural
    :Demographic environment
    Internal Environment:
    Survival of a business depends upon its strengths and adaptability to the
    environment. The internal strengths represent its internal environment. It
    consists of financial, physical, human and technological resources.
    Financial resources represent financial strength of the company.

    Physical resources represent physical assets such as plant, machinery,


    building etc. that convert inputs into outputs. Human resources represent
    the manpower with specialized knowledge that performs the business
    activities.

    The operative and managerial decisions are taken by the human resources.
    Technological resources represent the technical know-how used to
    manufacture goods and services. 

    External Environment:
    The external environment consists of legal, political, socio-cultural,
    demographic factors etc. These are uncontrollable factors and firms adapt
    to this environment.

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