Types of Business Environment – Introduction to Management (ITM)

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Business EnvironmentTypes of Business Environment
Principles of Management (POM)
Third Semester | Second year
BSc.CSIT | Tribhuvan University (TU)

Business Environment
Environment means the surrounding, external object, influences or circumstances under which someone or something exists. It can be defined as total of internal and external factors to an organization that affects it.  Generally everything in and out of business organizations that affect, influence it can be considered as business environment.

It consists of all components of the surroundings of a business organization, which affect or influence its operation and determine its effectiveness. The effectiveness depends upon the ability to deal and adjust with environmental forces. It encompasses the climate or set of conditions, economic, social, political or institutional in which business operations are conducted.

Environment is dynamic and changes according to time, so it is complex and difficult to forecast. For smooth operation on business organization or to sustain in challenging environment, management needs to estimate and forecast environmental influence. It is necessary to maintain regular monitoring on environmental changes to grab opportunities and understand probable threats and challenges. It cannot exist and operate without environment. It is beyond the control of individual. These are internal or external forces that affect the organization’s performance. Every business organization obtains inputs from environment, transforms them into output and again supplies to the environment.


Internal Environment

External Environment

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