Business Environment and Types of Business Environment

In this article we have given details of Business Environment and Types of Business Environment .

Business Environment

Environment refers to all external forces, which have a bearing on the functioning of business. Environment factors “are largely if not totally, external and beyond the control of individual industrial enterprises and their managements.

The business environment poses threats to a firm or offers immense opportunities for potential market exploitation. Environmental business solutions will give way to the environmental business opportunities.

Types of Business Environment

Environment includes such factors as socio-economic, technological, supplier, competitor and the government. There are two more factors, which exercise considerable influence on business. They are physical or natural environment and global environment.

Technological Environment

Technology is understood as the systematic application of scientific or other organized knowledge to practical tasks. Technology changes fast and to keep pace with it, businessmen should be ever alert to adopt changed technology in their businesses.

Economic Environment

There is close relationship between business and its economic environment.
Business obtains all its needed inputs from the economic environment and it absorbs the output of business units.

Political Environment

It refers to the influence exerted by the three political institutions viz., legislature executive and the judiciary in shaping, directing, developing and controlling business activities. A stable and dynamic political environment is indispensable for business growth.

Natural Environment

Business, an economic pursuit of man, continues to be dictated by nature. To what extend business depends on nature and what is the relationship between the two constitutes an interesting study.

Global or international Environment

Thanks to liberalization, Indian companies are forces to view business issues from a global perspective. Business responses and managerial practices must be fine-tuned to survive in the global environment.

Social and culture Environment

It refers to people’s attitude to work and wealth; role of family, marriage,
religion and education; ethical issues and social responsiveness of business.


Guest Author: ayoemmajed18 Aug 2014

I am really grateful for this post.thanks a lot.

Guest Author: happiness20 Oct 2014

list and explain categorization of business

Guest Author: kriya07 Nov 2014

I got a project on business environment am confused as to which topic is good am a FYBMS students please can you help me.

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