Explain any four features of business environment.

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.

Business environment has the following features: 

1. Totality of external forces: Business environment’s sum total of all things external to business firms and, as such, is aggregative in nature. 

2. Specific and general forces: Business environment includes both specific and general forces. Specific forces such as investors, customers, etc, affect individual enterprises directly and immediately in their day-to-day working. General forces such as social, political conditions have impact on all business enterprises and thus may affect an individual firm only indirectly. 

3. Inter-relatedness: Different elements of business environment are closely interrelated. One element of the environment affects the other. For example, new health-aware products such as diet coke, fatfree cooking oil, etc changed people’s lifestyles. 

4. Dynamic nature: Business environment is dynamic. It keeps on changing whether in terms of technological improvement, shifts in consumer preferences, etc. 

5. Uncertainty: Business environment is largely uncertain because it is difficult to predict future happenings. 

6. Complexity: Since business environment consists of numerous interrelated and dynamic forces that arise from different sources, it is relatively easier to understand in parts but difficult to grasp in its totality. 

7. Relativity: Business environment is a relative concept. It differs from country to country and even from region to region.

Business environment can be defined as the sum total of external factors that influence the functioning of a business enterprise. 

The main features of Business Environment arc given below: 

Specific and general forces: Business environment is made up of both specific and general forces. General forces such as economic, social, political, legal conditions indirectly influence the business operations. Whereas specific forces refers to customers, competitors, investors etc. which have a direct effect on the day-to-day working of the business.

Dynamic nature: Business environment is dynamic in nature i.e., it keeps on changing. Entry of new competitors in the market, development of new technology , shifts in the preferences of consumers are examples of environmental changes.

Complexity: Business environment is complex because it consists of several interrelated elements which keeps on changing. Many forces constitutes the business environment. 

For example, it is difficult to know the impact of economic, social, political, technological and other forces on changes in demand for a product or service.

Uncertainty : Business environment is very uncertain as one cannot predict future events particularly changes in technology and fashion which occur fast and frequently. Its dynamic nature makes it more challenging to handle uncertainty.