External Environmental Factors In Business

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Environment means surrounding. Business establishes grows or operates and dies in an environment. It exchanges resources in the environment. It collects inputs i.e. man money, materials, machines etc. and provides output i.e. goods and services in the environment. There are events or situations that occur and affect the way a business operates, either in a positive or a negative way and are called as an 'environmental factors.' There are two types of environmental factors: internal environmental factors and external environmental factors. Internal environmental factors are events that occur within an organization. Generally speaking, internal environmental factors are easier to control than external environmental factors. External environmental…show more content…
An organization mission statement reveals the organization’s intention to secure its survival through development growth and profitability of the business. It is basic and implied objectives of the most organizations. It is of utmost importance at the time of beginning of a venture and in economic downturn. All types of enterprises will be interested in more than mere survival in market. Stability Stability is one of an important, cautious and conservative objective of firm. A good and steady enterprise always minimizes its managerial tensions and reduces its dynamic nature decisions which are taken from managers for managing business. It is less susceptible to the resistance and hostility of external environment. It requires comparatively less managerial efforts and…show more content…
(ii) General: These forces affect all the firms of an industry equally, e.g., social, political, legal and technical situations. (3) Interrelatedness: The different factors of business environment are interrelated. For example, let us consider that there is a new government has got majority and they have implemented change in the import-export policy. In this case, the factors like forming of new central government is a political change and change in the import-export policy is an economical changes respectively. Thus, a change or modification in one factor affects the other factor. (4) Dynamic Nature: It is clear that environment is a mixture of many factors and changes in some or the other factors continue to takes place that produces changes in other factors so environment is treated as dynamic. (5) Uncertainty: Business environment is dynamic in nature, nothing can be predicted with certainty. The strategic managers who determine the business strategy consider the likely changes beforehand which is a risky job. For example, as we are well versed with the technical changes that are very rapid, it is difficult to anticipate
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