Question

Long Answer Type Question:
How would you characterise Business environment?

Explain with example the difference between general and specific environment.

Answer 1

Features of business environment (i) Totality of External Forces Business environment is aggregative in nature as it is the sum total of all things external to business firms. (ii) Inter-relatedness Different elements of business environment are closely related to each other, e.g., increased awareness of health care have increased the demand for many health products. (iii) Dynamic Nature The business environment is highly dynamic keeps on changing. Sometimes there is a change in technology tastes and preference of consumer etc. (iv) Uncertainty The environment cannot be predicted. It is highly uncertain and unpredictable. (v) Complexity Since there are many elements of business Environment and they are inter-related and dynamic in nature Therefore, it becomes very difficult to understand them as a whole. Difference between Specific and General Environment There are two types of forces operating in business environment specific and general Specific forces affect the individual enterprises directly and immediately e.g., customers, suppliers. General forces affect the firms and only indirectly e.g., social conditions in political conditions.