business environment elements – what is called a company environment? see the following continuation

Topic – business environment elements

A. Understanding the Business Environment

The environmental surroundings could be interpreted as all elements which can be interconnected and affect each other using circumstances and activities. The environmental surroundings consists of physical and nonphysical elements. Available world, physical elements such as for example technology, natural conditions and suppliers while non-physical elements may be in the form of community customs, economic conditions and norms.

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business environment elements

Business contains all activities and businesses to create a profit by giving the goods and services necessary for the economic system. The essence of any business venture could be the exchange between the buyer and the seller.

From the above two definitions we are able to draw the final outcome that the knowledge of the Business Environment are factors that could affect directly or indirectly the management of the business or business activities.

B. Division of Business Environment

business environment elements – Organizational environments may be distinguished over external environments and internal environments. The external environment includes factors that affect the corporation from beyond your boundaries of the corporation, while the internal environment includes factors within the corporation that affect the management of the organization.

The external environment of an organization is generally distinguished over the overall environment and a particular environment (also called a job environment) that features suppliers, customers, competitors, regulators, and unions. Meanwhile, the inner environment includes factors of mission vision, corporate culture, management style, organizational policy, employees, inter-divisional relationships, and informal organizations.

C. External and Internal Environmental Relations with Organizations

External environment as a source for suppliers of resources and consumers of output. Simply how much this environment can support an organization may have an effect on the organization’s operations and performance. A great relationship with suppliers will further ensure a clean influx of needed resources and satisfied customers will support demand for items and services produced.

The interior environment directly affects the degree of capability in the process which include all three subsystems in the organizational system, namely input, transformation, and output.

D. General Environment

The overall environment includes background conditions in an additional environment that can have a significant influence on the operational activities of an organization. These environments include:

Economic Conditions

Namely the overall condition of the economy linked to interest rates, inflation, currency konvertibility, per capita income level, gross domestic policy, monetary and fiscal policy, tax system, population, unemployment, wage level and other related economic indicators.

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Socio-Cultural Conditions

The typical condition of the prevailing social values concerning human rights, customs, norms, values, beliefs, languages, attitudes, behaviors, languages, religions, tastes, aspirations, educational tend and related social institutions.

Legal Conditions – Politics

Namely political ideology, party and political orgnization, forms of government, hokum, government laws and regulations that affect business transactions, agreements with other Countries, patents and trademarks.

Technological Conditions

That’s the overall condition of the development and availability of technology in the surroundings, including the advancement of science.

Natural Environmental Conditions

It is just a common condition of nature and physical environmental conditions.

The difference in these related factors is likely to be very noticeable for organizations operating internationally. The conditions in the typical environment differ a great deal in one Country with another. Successful managers of organizations operating internationally can understand these differences and assist the corporation to make the mandatory operational adjustments.

E. Special Environment

A special environment contains organizations, groups, actual people who have whom an organization must interact in order to operate and thrive. Once called a job environment, this environment is different for every single organization, with regards to the unique operating situation and domain of the organization.
Important elements in an organization’s specific environment include:


That’s, certain groups of individuals and consumer organizations or customers who buy goods from organizations and or use their services.


Certain human resources, information and finances and raw materials are needed by the organization to operate.


Certain organizations offer the same or similar goods and services to exactly the same band of consumers or customers.

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Government agencies or representatives at the neighborhood, regional and central levels as hokum penegsk and perturan that affect the operational activities of the organization.

Trade Unions

It can be an organization that gathers workers to fight for the aspirations of its members.

F. Internal Environment

They’re factors within the business that affect the management of operations. The influence of the inner environment on the corporation may be briefly ed as follows:
Vision is defined being an overview of the condition or portrait of the future (long term) that the organization should go to. In the meantime, there is a statement in regards to the intent and philosophy of the corporation or the reason behind packing a preexisting orgaization. Each amount of management must fully know what the vision and mission of the business is.

Corporate Culture

Culture is really a system of mutual values, beliefs, and habits within an organization that interacts with formal structures that produce behavioral norms within the organization. It is the social and psychological climate of corporate ebuah, and its existence can be an open or open culture. In a sealed culture the sentness of cendrung is made by a advanced of management. Managers lack trust in subordinates, plenty of secrecy across the organization’s ranks, and employees are not compelled to be creative or participate in problem solving. Conversely, in a open culture decisions are made at less amount of management, rely upon subordinates or employees is considerable and employees are encouraged to be keatif and contained in problem solving.

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Management style

The attitude and preferentiality of the boss affects what sort of task is carried out. The problem may be if the managerial design of the higher manager is different from the reduced level manager. Generally speaking, lower-level managers have to adjust to the style of the boss.


The policy sets limits as a limitation as a result of earning decisions. Policies developed by lower-level managers should really be aligned with those of higher managers. Policies in many cases are intended to ensure consistency in practice such as for example when and how performance is assessed.


Employees vary from person to person in various ways such as for example proficiency, attitude, personal goals, and personality. Consequently, an effective manager’s behavior having an employee might not be effective with another employee. In extreme cases employees may vary from each other making it almost impossible to handle as a group. In order to succeed, managers must consider differences, both individual and group.

Informal organizations

Members of the organization will encounter two types of organizations within the business, namely formal and informal.Formal organization is indicated by a chart of organizational structures and job descriptions. Informal organizations are evolving relationships and patterns of human interaction within organizations which are not officially defined. Informal organizations can have a positive or negative effect on the span of the business’s activities.

Relationships between units

Managers must properly understand the partnership between existing divisions or departments and must maximize of the relationships. If the job of a division depends on another division in the flow of work, then your manager must recognize that cooperation with other divisions is urgently needed if the job is usually to be completed efficiently or the productivity of the division desires to be improved.

G. Environment and Competitive Advantage

In accordance with Schermerhorn (1996), management’s attention in coping with complex and constantly changing external environments is increasingly devoted to the concept of competitiveness. Competitive advantage is defined as a certain advantage that enables the business to handle market and environmental forces a lot better than its competitors.


No organization is immune to the influence of economic factors. More and more today, competition to hunt down consumers and get rare resources is getting harder and more merciless. Managers should direct companies to compete and win them, both at any given time once the economy is in recession and when the economy is growing.
Therefore today’s managers must understand and follow and be tuned in to the development of the world economy. Corporate leaders now realize that competitive excellence must be performed with full understanding, both on issues and opportunities from the international dimension in management.

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Socio-cultural issues

business environment elements – Any manager who talks about the excellence of competitiveness must acknowledge the significance of people. This relates to commitment and effort in using organizational resources which will determine the highest amount of performance achievement. Good managers realize that talented and diligent workers are important to the excellence of long-term competitiveness. A manager must also make good decisions when recruiting and selecting workers from labor sources, both externally and internally.

Legal-political aspects

All efforts produced by managers to pursue competitive advantage must be done in manners which are in respect with the expectations of the community, namely to uphold ethics and social responsibility, and to be within the framework of hokum and government regulations that support those expectations.
Managers may also be required to understand various laws and regulations at the district, provincial and national levels including related government agencies. Organizations operating internationally will face greater complications because the laws and regulations vary from country to country.

Technology aspects

Today, we live and work in a century of information technology. Specifically for managers, the utilization of technology and information is a key theme of daily life. Computer and information technology continues to expand its influence on manufacturing and service processes. People genuinely believe that the excellence of competitiveness through technology is a key driver for the business in the next few years.
It should be acknowledged that the rapid ness of technology will bring about a selection of changes that continue in the wider community. As managers, employees and consumers we must strive to carry on to check out and understand every step of development and change.


Environmental issues rank second highest on social priorities after education. The outcomes of the survey show that the business world must take an active role in helping to fix the environmental problems that are now facing the entire world community. Business leaders and pogresive governments recognize that the large number of the world’s industries rely on natural resources for the base of the products it produces. They understand the huge prospect of green marketing involving the sale of environmentally friendly products.


The business environment includes a huge impact on the company’s operations and organizational management. For a manager this becomes both the opportunity and a challenge. The ever-changing environment requires management and organizations to be responsive and progressive.
So widespread and kopleksnya the surroundings faced by a company demands professionalism out of every human resource that exists in the company. Managers must always keep up with the flow of modernity, mastering technology and information in order to gain a competitive edge.
Organizations that not want to constantly learn gradually will experience setbacks and deaths from losing competition meets the demands of the market.

That is expanation about business environment elements, hopefully useful

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