Concept of business environment can be well understood by those who are part of a business. They come across daily a large number of people and several situations. They deal with clients, contractors, suppliers, importers, taxmen, regulators, laborers, managers, trade unionists, supervisors, bosses, owners, directors, board members etc on daily basis. Sometimes they have to fulfill a huge order working day and night and some other times they have to sit idle because of slump in business activities. As the purpose of every business is same i.e to earn profit therefore the nature of environment they face daily is almost the same. We can say that every business has a competitive environment where each one tries to excel others just to top the rank in profitability.
Why concept of business environment
The proper interpretation of the business environment concept helps businessmen to adjust with day to day changing situations for the sake of smooth running of their businesses. Its proper grasp helps policy makers incorporate changes in their policies to update them up to the changing trends of business and industry. Therefore, clear perception of the concept of business environment is an auxiliary tool for the managers, policy makers and business leaders to adapt to all changes with an objective of smooth functioning of their business concern.
In stiff competitive environment it is necessary to remain alert to happenings of surroundings in order to respond them quickly and to keep pace with recurring changes. A stock broker has to revise his or her commission tariff if there is regulator’s announcement to put ceiling on brokerage fee. Similarly an importer has to be vigilant of external environment specially the political and economical conditions of the country where from goods are being imported. Therefore, vigil over the external and internal business environment helps businessmen avoid lagging behind competitors if there are major changes in any aspect of the overall industry where they are operating their businesses. For this purpose unambiguous perception of the concept of business environment is must.
In external sectors of the business which are based on imports and exports, one has to keep watch on both global and local business environment. Though it needs extensive monitoring to remain updated with what is going on globally and locally at the fronts related to one’s business but its importance cannot be downplayed. In a typical local industry of any business too, apart from knowledge of local business environment, it is equally important to look into global affairs related to one’s business like textile industry at local level has to update its production plan according to the demand and supply at global level.
Benefits of the concept of business environment
With the clear business environment concept the proper review of both external and internal milieu at every stage of business is vital for the ultimate growth of the business. Efficient managers keep on reviewing policies and plans of business first to see their smoother implementation and secondly to modify them according to the changing scenario at the global and national level. However, such practices are adopted on long-term basis while in the medium and short run no any big changes are usually observed in larger business concerns. In small businesses it is likely that changes may be adjusted in plans on short term basis as well.Do You Like This Post?