MANAGEMENT - What Are The Environmental Factors That Affect Business?

Anonymous answered

The different environmental factors that affect the business can be broadly categorized as internal ands has its own  external factors.

INTERNAL FACTORS : Internal factors are those factors which exist within the premises of an organization and directly affects the different operations carried out in a business. These internal factors are :

A. VALUE SYSTEM : It implies the culture and norms of the business. In other words, it means the regulatory framework of a business and every member of the organization has to act within the limits of this framework.

B. MISSIONS AND OBJECTIVES : Different priorities, policies and philosophies of a business is guided by the mission and objectives of a business.

C. FINANCIAL FACTORS : Financial factors like financial policies, financial position and capital structure also affects a business performance and its strategies.

D. INTERNAL RELATIONSHIP : Factors like the amount of support the top management enjoys from its shareholders, employees and the board of directors also affects the smooth functioning of a business.

The EXTERNAL FACTORS include all those factors which exists outside the firm and are often regarded as uncontrollable.. These external forces can further be categorized as MICRO ENVIRONMENT and MACRO ENVIRONMENT.

MICRO ENVIRONMENT includes the following factors.

1.SUPPLIERS : Suppliers are those people who are responsible for supplying necessary inputs to the organization and ensure the smooth flow of production.

2.COMPETITORS : Competitors can be called the close rivals and in order to survive the competition one has to keep a close look in the market and formulate its policies and strategies as such to face the competition.

3.MARKETING INTERMEDIARIES : Marketing intermediaries aid the company in promoting, selling and distribution of the goods and services to its final users. Therefore, marketing intermediaries are vital link between the business and the consumers.

MACRO ENVIRONMENT includes the following factors.

1.ECONOMIC FACTORS : Economic factors includes economic conditions and economic policies that together constitutes the economic environment. These includes growth rate, infation, restrictive trade practices etc. Which have a considerable immpact on the business.

2.SOCIAL FACTORS : Social factors includes the society as a whole alongside its preferences and priorities like the buying and consumption pattern, beliefs of people their purchasing power, educational background etc.

3.POLITICAL FACTORS : The political factors are related to the management of public affairsAnd their impact on the business. It is important to  have a political stability to maintain stability in the trade.

4.TECHNOLOGICAL FACTORS : Latest technologies helps in improving the marketablity of the product plus makes it more consumer friendly. Therefore, it is important for a business to keep a pace withv the changing technologies in order to survive in the long run.

Mohamed Himas Nilar answered

There lot of factors that affect the business
1.political
2.economic
3.technology
4.culture
5.demographic
6.government
7.competitors
8.environmental

Anonymous answered

1.) Social 
2.) Political 
3.) Financial 
4.) QoS 
5.) Product Quality 
6.) Distribution Channels 
7.) Promotional Channels 
8.) Manufacturing 
9.) Employee 
10.) Leadership

amber Jhon answered

There are various environmental factors which can impact the businesses in an economy. These environmental factors can be categorized into external and internal environment of the businesses. The internal environment of the company includes the factors which are within the company and under the control of company like product Organizational culture, Leadership, and Manufacturing(quality). On the other hand, the external factors are not under the control of the company and include Social environment, political conditions, suppliers, competitors of the company, Government regulations and policies, accounting agencies like Accounting standard board, Resources in an economy and demographics of people. 

Anonymous answered

Internal forces:
-employees
-supplier
-policy
-objective
-strategy

external forces:
-political
-economic
-technology
-social
-legal
-environment
-customer
-competitor
-cultural

Anonymous answered

Social factor always have effect on business. For example, if there are change in consumer taste then this may effect businesses products. Therefore businesses need to carry out market research to indentify customers need and want in order to develop new product.

Economics factors also have imfact on businesses for example, if the interest rate goes up then businesses need pay more for their borrowing. Every business needs loan to expand their business, therefore, they may need to pay high rate interst on it. 

Technology's constantly change and they effect businesses activities. For example, if we look back 5 to 8 years ago Tesco did not have self checkout but they do it now because of technological advancement. The effect of this is that they need to buy the technology in order to be competitive and they also need to train their staff. Technology also have positive effect on businesses as well. For example, technology may increase productivity.

Political factor like barriers to entery can be problem to bsunesses because international firm can come into market in set up as a competition.

Ellie Hoe answered

The environmental factors directly impact the companies because of their importance to the changing dynamics. A change in any of the environmental factor changes the organization's practices and affects their corporate policies. For example, competition might force company to change its pricing strategy to cope up with the competition. Change in labor laws, rules and political aspects can enable organization to revise its internal policies. Similarlly change in economic conditions can change the organization's preference for investment decisions. The change in social practices can make a product fatigue in the market and allow the firm to change its product portfolio. Hence all the environmental factors are very important for the companies operating in the business environment.