The concept of business environment:
Every Business is subject to the environmental that it is located, were the business is sighted will determine the growth and progress of the that business, when a business is establish in a rural environment it will attract rural customers also when a business is established in an urban areas it will attract the urban settlers. The concept of business environment trys to see how Business survive according to demography which is was established and also the factors that influence the demand and supply of such products and services. Business environment is the total sum of internal and external business activities in an economy such as demand, supply,management
, Innovation, market trends, customers and technology transfer.
Characteristics of business environment:
The characteristics of business environment are as follows;
- The government policies that exists to guide the business organizations
- Price control system
- Availability of various goods and services
- Domestic production
- Trade unions and organizations
Business environment and it importance:
Business environment is important in many ways, this include;
The increase in the gross domestic product of the country, providing the economy the opportunity to grow an develop, when the business environment is striving there will be less crime in the society were by the young people will be fully engaged and fully employed, this will not give room for any nagative thought that may result in unwanted behavior by such person.
Another importance of the business environment is that it provides room for new ideas and innovation to be henance and encourage, new products will be produce to meet the current demand and challenges face by customers and clients, variety of goods will be available for you to choose according to the present need.
Challenges of business environment:
The challenges face by business environment are mainly issues of security and unfavorable government policies which do not allow business organization to grow and flourish the way they are suppose to, the challenges of security is affecting the performance of business company's who want to expand their activities, when there is unrest businesses suffer alot because of low demand and scarcity of the factors of production such as capital,labour, land for example the current security challenges that is ravaging the world today is affecting the business environment nagatively increasing the prices of goods and services.
Secondly the unfavorable policies implemented by governments agencies has affected most business organizations, policies ranging from high taxes and unbearable Conditions to be met before one can establish a business that can be recognized and given the support needed to survive.
Thirdly the issues of finance and capital to establish a business idea that has been seen to be successful, plenty entreprenuers are willing and have the ideas of business but are not financially bouyant to venture into such Businesses because it will require a very huge funds to be established
Factors affecting business environment:
- Political factor
- Economic factor
- Society factor
- Technical factor
- Natural factor
- Global factor
- Demographic factor
Political factor;
The political activities in a particular environment of the nation affects the performance of the business tremendously, were there is political stability in an environment, Businesses enjoy good patronage because of the favourable conditions the find them self. A peaceful society were the political class provide the basic amineties such as security, good road Business flourish and investors will come and invest in such environment because of the political stability that exist in the locality the case is different when there is political unrest were by the political gladiators are on constant fight on who is to take over public office.
Economic factor;
Economic factors can influence business environment negatively or positively, when the economy is in good shape were by individuals have access to financial support from institutions responsible for providing the enabling environment for business to strive such as the nations central bank, bringing policies that are favourable. Monetary policy by government agencies helps to create an enabling environment to strive in their various Businesses. When people are employed and there disposal income is high and the standard of living is good they tend to demand for more goods and services which will in turn grow the business evironment. There will be more transactions carried out by business men and women in the the economy of that particular evironment for example when the tax rate are reduce it encourages Businesses to grow and establish more branches likewise when government pay their worker promtly it has a positive impact on the business evironment.
Society factor;
The society also is another factor that can affect business environment, when a society is hostile and are in constant conflict it affects the Business environment negatively, business men and women will not be comfortable to go about their normal business activities. A society that has no moral values were by hoodlums and theifs are targeting people stores to rop or steal from them such business environment will not be condusive for both existing and new investors that are planning to establish theri own businesses, the case will be different when the society is organize and are against bad behavior such as trouble making, stealing, fighting etc. Such business environment will experience growth and development in all areas of economic activities.
Technical factor;
The technical factors has to do with the availability of technology that can enhance the performance of Businesses in an environment. The transfer of technology from the develop countries to the developing countries is very important for the growth of businesses in those environment, this has the capacity to bring about new business opportunities that will reduce unemployment and crime in the society. Technical know how is also another factor that improve businesses, bringing new ideas into a business can affect the business positively and increase the standard of production and the quality of products and services will be guaranteed.
Natural factor;
The nature of an environment has an impact on business environment, for example a location were by they are blessed with sea, rivers will definitely affect and increase production and supply of sea foods to the community such as fishes, snails, etc ecouraging the fish market and on this nature that exist in the demography will affect the business of fisheries.
Likewise when and environment is bless with fartile land this automatically means that the production of crops will increase this products could be rice, beans, casasva, coaco, vegetables etc.
Global and demography factor;
The global factor that affect business evironment has to do with the changes of prices in the International market which can affect domestic production, for example when there is a change in the price of oil and gas in the international market it can affect the business activities of countries that are dependent on importation of goods and services, to solve this delima the country must look inward and see what they can do to be self reliant by encouraging the domestic productions of goods and services, this will give them a soft landing when there is changes in global economic activities.
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