Nature of relationship between business and environment

Internal and External Environment Factors that Influences Organizational Decision Making

nature of relationship between business and environment

Linear relationship between the boss and manger and authority There is close relationship between business and its economic environment. There is a symbiotic relationship between business and theenvironmental factors , environmental factors are dynamic and a particularbusiness. It is a part and parcel of the social, political, moral and economic fiber of the country. These forces have a direct relationship with the activities of all the business.

Business Environment: Nature and Significances of Business Environment

Firms reconcile the interests of diverse groups and satisfy their demands. If management resolves these demands, it will be positively affected by the environmental forces but if it fails to satisfy these demands, it becomes a victim of the environment.

nature of relationship between business and environment

Growing firms pay high wages and dividends to their workers and shareholders to maintain harmonious industrial relations and a positive business-environment interface. This information is transmitted to environment through annual reports as a requirement of disclosure practices.

nature of relationship between business and environment

The basic function of a business enterprise, input-output conversion, is carried through active interaction with the environment. It receives inputs from the environment, converts them into outputs through productive facilities which are also received from the environment and sends them back to the environment.

A constant feedback is received from the environment to improve its performance.

Internal and External Environment Factors that Influences Organizational Decision Making

The environment offers threats and opportunities to business systems which they overcome and exploit through their strengths and weaknesses. SWOT analysis helps in integrating external environment with the internal environment.

The business and environment, thus, have much to give and take from each other.

nature of relationship between business and environment

It makes easy for the firm to know the uncertain and complex information about the external environment. Creation of Utility by Change in Form The resources provided by the external environment to the firm are returned by the firm to the society by making them useful through creating reality. The production process creates utility in the resources by the change in form, place, ownership, time etc.

nature of relationship between business and environment

To Identify Major Changes The external environment is dynamic. It is the responsibility of the firm to identify major changes taking place in the environment and adjust itself accordingly. Responsible for all Factors The business firm is responsible for all the factors as consumers, worker, suppliers, investors, government, national and international economy etc.

In other words, the firm should take decisions by safeguarding the interests of the various groups in the environment. Fulfill Needs External environment society expects from the firm to fulfill its needs. The firm which cannot fulfill the requirements of the society cannot survive for long. Changes According to Changes A business firm is the product of its environment.

Relationship between Environment and business Assignment Help Homework Help Online Tutor Help

The environment is a mix of various factors which influence the firm. Therefore, for the success of a firm, it is essential that it will change itself according to the changes taking place in the environment. Uncertainty A firm faces uncertainty and hurdles in its operations to fulfill the expectations of the external environment.

The nature of Business Environment is simply and better explained by the following approaches: In original, business is a system by which it produces goods and services for the satisfaction of wants, by using several inputs, such as, raw material, capital, labour etc.

Relationship between Environment and business

In this approach business should fulfill its responsibility towards several categories of the society such as consumers, stockholders, employees, government etc. As per this approach, business gives shape to the environment by facing the challenges and availing the opportunities in time.

The business brings about changes in the society by giving attention to the needs of the people. Significance of Business Environment: In the past, the environment of man consisted of only the physical aspects of the planet Earth air, water and land and the biotic communities.