Business Environment: It means the totality of all individuals, institutions and other forces which are outside a business enterprise but affect its performance.
Features of Business Environment:
(i) Dynamic Nature: Business environment is dynamic in nature as it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competitors in the market.
(ii) Uncertainty: Business environment is largely uncertain as it is very difficult to predict the future happenings, especially when environment changes are taking place frequently as in the case of information technology fashion industry etc.
(iii) Totality of external forces: Business environment is the sum total of all the external forces that directly, as well as indirectly influence the functioning of the business system.
(iv) Specific and general forces: Specific forces affect individual firms directly like competitors, customers etc. General forces affect a firm indirectly like social, political forces etc.
(v) Inter-relatedness: Different elements of business environment are closely inter-related. For example, Increased awareness of health care has raised the demand for organic food and diet health drinks.
(vi) Complexity: It is relatively easier to understand the elements of business environment in parts but difficult to grasp it in totality.
(vii) Relativity: It varies from region to region, place to place and country to country. For example, Business environment varies for the saree in India compared to America.
