Question

Why is it important for business enterprises to understand their environment? Explain briefly.

Answer 1

It is important for business enterprises to understand their environment because of the following reasons :
(i) It helps business firms to identify opportunities and get the first mover advantage.
(ii) It helps business firms to identify threats and get warning signals.
(iii) It helps in coping with rapid changes.
(iv) It helps in planning and policy formulation.