Any factor or forces (internal or external ) that impact on our surrounding lives and belongings, known as environment. In other way, environment is the culture that an individual lives in and the people and institutions with whom they interact.
Business Environment :
A business or organizations environment is an environment in which business is conducted. Environment of an organization consists of its surroundings- anything that affects its operations, favorably or unfavorably. Organizational environment is always dynamic. It is ever changing. The environmental forces – abstracts and visibles – need a careful analysis. Systematic and adequate analysis produces information necessary for making judgments about what strategy to pursue. For making appropriate and sound strategy managers must use relevant information that directly flows from the analysis of their organization’s environment.
Classification of business environment :
The organizational or business environment classified into two broad categories.
1) External Environment : (a) General ( or remote) Environment (b) Specific or tasks or industry Environment
2) Internal Environment
Internal Environment : Internal environment of an organization consists of the conditions and forces that exist within the organization. Internal environment portrays an organization’s ‘in-house’ situations. Internal environment is much more directly controllable.
External environment : External environment consists of an organization’s external factors that affect its businesses indirectly. The organizations has no control or has little control over these factors. The external environmental factors reside outside the organization, which can lead to opportunities or threats