Monday, July 27, 2009

Category of the Business Environment

Generally, Environment is classified into two broad categories i.e. Internal Environment and External Environment. Similarly the business environment is also classified into two categories
i.e. a) Internal Business Environment
b) External Business Environment

First, what is internal business environment? As the name suggests, the internal business environment refers to the factors and the forces within the business that affect in the business and the business activities. E.g. Capital, Human resources, information form the various financial statements, workers, etc. This sort of business environments helps in finding out the strengths and the weaknesses of the business.

Next category is External Business Environment. External business environment is the factors and the forces outside of the business that may be related to the national level, regional level or international level. For E.g. Political environment, Economic environment, Social Environment, Technological Environment can be taken as the external business environment. These sorts of business environments provide opportunities or threats to the business.

Business organizations cannot change external environment but they can just react. They can change their internal business environment to grasp the external opportunities and face the external environmental threats.

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