Importance of Business Environment
In the context of India, we can explain the importance of the business environment in the following words-
(1) Achievement of goals: – The goals can be achieved only by being aware of the environment. The reality is that the goals or objectives should also be set according to the business environment; only then their achievement can be possible. The achievement of the goals set against the environment always remains doubtful.
(2) Government policies: – The effect of various policies set by the government clearly affects the business. Industrial policy, licensing policy, monetary policy, import-export policy, foreign exchange policy, etc. announced by the government of any country have an impact on business. Therefore, every businessman should keep an eye on government policies and operate his business based on that.
(3) Diversification:- Environmental analysis also helps in the diversification of business. Environmental analysis shows in which areas diversification is possible and in which areas there are more problems. Many companies in India have achieved success by adopting this policy.
(4) For the conduct of business: – The determination of what will be the business of an organization or company depends a lot on the business environment present in the economy. The business environment that exists in any economy can affect a company’s objectives and strategy.
(5) Vigilance for Hazards: – The business operates in an open environment. The fast pace of development has subordinated geographical boundaries. Economies are also opening up. In this way, we see that due to the open environment and openness of economies, where new opportunities have been received, on the one hand, on the other hand, there is always a possibility of new threats, crises, and problems arising. It is necessary to keep evaluating and studying the business environment, changes in economic policies, demand growth, and reduction, consumption propensity, purchasing, priority curve, competition, etc.
(6) Knowledge of business problems and challenges: – Before the environmental problems and new challenges dominate the business, the business must have complete knowledge of them and their solutions and tips to combat them. Consider. Based on this belief, it is necessary to deal with the problems and challenges in time and this study and analysis are very necessary.
(7) For dynamic behaviour: – The business must be aware of the external environment economic socio-political conditions and new developments along with the internal environment. For the success of the business, he must maintain himself in a position to behave continuously.
(8) For the knowledge of the international environment: – International environment also affects domestic business. Therefore, for stability, effective operation, and dynamism, etc. of business, it is necessary to study and analyze international events, impacts, and pressures thoroughly and thoroughly.
(9) Awareness of global changes: – Business organizations must be aware of the changes taking place at the world level. There are many factors like import-export policy, changes in oil prices, changes in currency values, etc., which can influence the activities of the organization to a great extent.
For example –
1. A proper equilibrium can be established between demand and supply.
2. The available resources can be properly utilized.
3. Maximum satisfaction can be given to the consumers.
4. Maximum benefit can be provided to the owners.
5. Social and environmental security can be ensured.
6. The protection of one’s own existence can be ensured.
Importance of business environment
Some more important features of the business environment are as follows:1. All External Forces: These include all external forces, institutions, and factors that are external to the business enterprises and directly affect the business operations. These are suppliers, investors, and customers.2. Common Forces: These forces are indirectly affecting business operations. Social, political, technological, and legal conditions are indirectly affecting the business environment.3. Dynamic: It means to keep changing. The external and internal environment is highly resilient hence it is necessary to continuously scan for the smooth running of the business.4. Complex: It is very difficult to know the impact of the external environment on organizations or business enterprises. Sometimes the change is minor but the impact is huge. For example, if the government policy changes the tax rate to 4%, it can affect the income of the company by a huge amount.5. Uncertainty: It is difficult for businessmen to predict the changes in the environment because we know that the environment is changing very fast, for example, this fashion industry, etc.
- Business environment definition and its Nature
- Importance of business environment
- Components of business environment
- Strategic management
- Social responsibility of business
- Business ethics
- Corporate/Organisational Culture
- Economic System
- Features of Indian economy
- Public sector in Indian economy
- Role of public sector in Indian economy
- Problems related to public sector in Indian economy
- Economic planning in India