Business environment refers to forces and institutions outside the firm with which its members must deal to achieve the organisational purposes.
Features of Business environment
Dynamic: Business environment is dynamic in nature which keeps on changing with the change in technology, consumer’s fashion and tastes etc.
Uncertainty: Business environment is uncertain as it is difficult to predict the future environmental changes and their impact with full accuracy.
Specific and general forces: Business environment includes both specific and general forces. Specific forces include investors, competitors, customers etc. who influence business firm directly while general forces include social, political, economic, legal and technological conditions which affect a business firm indirectly.
Complexity: Business environment is complex which is easy to understand in parts separately but it is difficult to understand in totality.
Relativity: Business environment is a relative concept whose impact differs from country to country, region to region and firm to firm. For example, a shift of preference from soft drinks to juices will be welcomed as an opportunity by juice making companies while a threat to soft drink manufacturers.