Why is the understanding of business environment important for managers? State any five points.
Why is the understanding of business environment important for managers? State any five points.
The understanding of business environment is important for managers because:
(i) Determining strategies and policies: The study of the environment helps a business to develop broad strategies and long-term policies, which aims at devisings specific methods, plans, rules and guidelines leading to a desired future or goals of the organisation.
(ii) Ensuring optimum utilisation of resources : A thorough understanding of internal and external environment will enable a business to optimally utilise the resources.
(iii) Analysing competitors’ strategies : The business environment continuously keeps collecting and displaying strategies adopted by competitors so that, business can formulate effective counter-plans to face them.
(iv) Maintaining business dynamism and innovation : A business can become alert and dynamic by being aware of changes in their surroundings and can accordingly, either expand their businesses when market is favourable and / or prepare them if there are any possible unfavourable conditions.
(v) Determining strengths and weaknesses : Awareness on business environment can assist in identifying the strengths or weaknesses or positive or negative aspects which are generally in direct control of the business or the decision-maker. These aspects can be weighed and compared to determine their performance vis-à-vis their competitive standing in the market.
The understanding of business environment is important for managers because:
(i) Determining strategies and policies: The study of the environment helps a business to develop broad strategies and long-term policies, which aims at devisings specific methods, plans, rules and guidelines leading to a desired future or goals of the organisation.
(ii) Ensuring optimum utilisation of resources : A thorough understanding of internal and external environment will enable a business to optimally utilise the resources.
(iii) Analysing competitors’ strategies : The business environment continuously keeps collecting and displaying strategies adopted by competitors so that, business can formulate effective counter-plans to face them.
(iv) Maintaining business dynamism and innovation : A business can become alert and dynamic by being aware of changes in their surroundings and can accordingly, either expand their businesses when market is favourable and / or prepare them if there are any possible unfavourable conditions.
(v) Determining strengths and weaknesses : Awareness on business environment can assist in identifying the strengths or weaknesses or positive or negative aspects which are generally in direct control of the business or the decision-maker. These aspects can be weighed and compared to determine their performance vis-à-vis their competitive standing in the market.
