A variety of environmental factors can influence the management in business process.  In some cases, the impact is minor, But in other situation, an environmental factor can significantly alter business management decisions.

Environmental factors affecting business management 

1. External and internal expectations 
2. Competitive environment 
3. Legal environment 
4. Economic settings
5. Social and cultural factors

External and internal expectations 

There are numerous external and internal expectations that impact the framework of business management. Executive tends to take actions that fulfill the expectations of people both inside and outside the firm.  Tradition; the customary way of doing something, plays a major role in business management decision _making.  While tradition is primary an internal expectations, a firm s image with the public influences external expections . The image of firms could impact on a variety of business management decisions. These could range from employee training decisions to merchandising practices.

Competitive environment 

The competitive environment refers to the firms relative situation in the market place. It includes such factors as how the firm rates in the market share, technology innovation, financial strength, involvement in growth industries, and the development of its human resource.  All of these factors can play a major role in business management decision. 
A firm might be financial strong, have good personnel, and dominate it's industry; yet if the company is positioned una declining industry, management may have to take aggressive actions to move the firm into new expanding market. Similarly, a firm in a growth industry may lack the financial strength to compete in the long run. So management might consider a manager with another enterprise that will correct this deficiency. 
One of the major lessons any manager must learn is that the competitive environment is not set, it is dynamic. To paraphrase the classical maxim of the TV weather forecast. "If you don't like the competitive environment that exist, just wait, it will change soon! " the real question for business management is weather or not the new setting will be more favourable than previous one. 

Legal Environment 

All societies have some sort of formal or informal legal system that regulates activities. The asset of legal mandates facing business is exceedingly complicated.  And in some cases perhaps contradictory. 
The legal environment for business management consists of federal, state,and local regulations, as well as those of foreign nations in which the business may operate.  Some aspects of the legal environment have very broad goals, which are the preservations of the competitive environment. 

Economic Environment 

Markets require purchasing power as well as people the available purchasing power in an economy depends on the current income, prices ,savings, dept, and credit available. Managers must pay close attention to major treads in income and consumer spending patterns. 

Social cultural environment 

Society shapes our beliefs ,value, and norms, people absorb, almost unconsciously, a world view that defines their relationship to themselves, to other, to organisation, to society, to nature and to the universe managers must have good knowledge I'd these factors so as to know how to operate.


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