2. • Definition: Business Environment means a
collection of all individuals, entities and other
factors, which may or may not be under the control
of the organization, but can affect its performance,
profitability, growth and even survival.
3. Business Environment is sum or collection of all internal and external
factors such as:
Employees Customers Needs
and Expectations
Supply and
Demand
Management
Clients Suppliers Owners Activities by
Government
Innovation in
Technology
Social Trends Market Trends Economic
Changes, Etc.
These factors affect the function of the company and how a company works
directly or indirectly.
4. Types of Environment
On the basis of the extent of intimacy with the firm ,
the environmental factors may be classified into
different types:
1. Internal
2. External
5. Internal Business Environment
• The internal business environment comprises of factors within the
company which impact the success and approach of
operations. Unlike the external environment, the company has
control over these factors.
• It is important to recognize potential opportunities and threats
outside company operations. However, managing the strengths of
internal operations is the key to business success.
6. Cont.…
The role of company leadership is an essential internal factor. Your
leadership style and other management style impact organizational
culture.
Some cultural implications which result from leadership approaches
are:
• Value of employees
• The positive nature
• Effectiveness of communication level of family-friendliness
7. Cont.….
The strength of employees:
The strength of employees is also an essential internal business
factor. Check if employees are motivated, hard-working and
talented. They will produce better results compared to an
unmotivated and less talented workforce. The processes and
relationships between and within departments can also improve
effectiveness and efficiency.
8. The Positive Nature:
• In a high performing workplace, the workers not only have talent,
but they also work better together. The employees and departments
collaborate on ideas and resolutions.
• The internal factors basically include the inner strengths and
weaknesses. Internal factors can affect how a company meets its
objectives. Strengths have a favorable impact on a business.
Weaknesses have a harmful effect on the firm.
9. Effectiveness of Communication:
• In the workplace, one of the most important skills to possess is
good communication. Employers value employees who can
communicate effectively; it means they are able to listen to others,
as well as successfully relay their own ideas and opinions. While
listening and speaking are important in effective communication,
there are other skills that are vital to good communication in the
workplace.
