Every member or institution which affects, or is affected by the business is an element of the environment of the business. The elements or components of the business environment are grouped or classified by different scholars in different ways. An entrepreneur by any promising investment idea exploits the opportunities in the environment and must assess his comities. Promising entrepreneur of manager should continuously forecast and appraise the environment to be successful and effective in the competitive environment. Below, a classification of the environmental factors has been presented.
Socioeconomic Factors
Economic and 2psociety environment or socio factors of the environment are very impotent for on. Every wants to earn wants through business operation. Knowledge of the socio environment and skill to analyze and of the environment affects the success of any entrepreneur.
Social factors including the socio– cultural attitudes, education, aspirations and desires, beliefs and customs. Social values and norms, social groups and institutions, historical background , cultural heritage, population growth, attitudes towed woman deduction and employment, age shifts in population, the conservativeness or rigidity in human behavior, attitudes toward saving and, consumption of refulgence in human social economic and environmental variables for an entrepreneur to be considered in business planning.
After social factor, economic factors are important for the management of the business. Economic factor including all economic variable or features of any economy, especially , state of the economy, annual growth rate, economic system, economic philosophy, cyclical flections q inflation rated and balance of payment, economic policy, economic condition and economic relations etc.
A country may be poor or rich; developing, underdeveloped or developer. The natural resources base, educational developments technical know-how, per-captain income balance of trade, bank and other financial institutions, etc. may be favorable or unfavorable. for any business operation. Hence , socio-economic condition assists the business operation to a great extent. If socio-economic is not favorable, then business development may be hampered.
Government and Political Factor
The philosophy, sincerity of the government affects the business to a great extent. In international arena today for gain investment is a mode of rapid development. Today, the policies of some government can attract for gain investment may, while that of others cannot .Government by its framework or fiscal policy monetary policy, export and import policies policy programs subsidies affects the operation and success of the business. Government’s sincere and hearty patronage accelerates the business and economic development of any country.
Political system, public opinion, democracy, government attitude toward political freedom of press, personal liberty, transparent political etc affect business development. Business should follow existing norm, and try to develop the prevailing system.
Technological Factors
Today business is very competitive. Improved technology reduces product’s cost and increase profit. Butter technology in the competitor’s hand may make one’s technology obsolete and lees viable. Emergencies of new technology, access to indigenous or foreign technical know are very challenging factors for the entrepreneur. Japan is an economic superpower in the world, because of her improved technology, managerial knows how and hard working attribution of the Japanese. India follows a protection oriented economic policy and tries to develop indigenous technology. Bangladesh depends heavily on import, which is an impediment to developed of indigenous technology.
Supply and Cooperation Factors
Business processes raw materials to product finished goods. So availability of raw materials, abundance of natural resources, uninterrupted supply of raw materials and suppliers affect the success survival and existence of the business. Favorability natural resources cause business envelope. A violability of raw jute helped the establishment of the “Adamjee jute Mill ” the biggest jute mill in the world, in Bangladesh, now shut down and Narayangonj, a repower the just trading center of Bangladesh, was called the Dundee of the east during the British period. The petroleum caused the development of petro-chemical indirectly and business in the Arabian Peninsula. So the availability of raw materials and its cost, availability of raw materials and its cost availability and cost of energy availability and cost of money influence and affect the business decisions and operations. Competition is important in the business environment. Competition enhances skills, but makes survival of the business challenging. The marketing policies and practices, the entry barriers, the degree of the different ion and homogeneity of products, the availability of substitute and complement goods the competitors policies and strategies, the government’s awareness and attitude to control malpractice in the competition, etc . Constitute the completion factors in the environment and affect business operation and development.
Other Factors
Legal framework n also impotent factors in the business environment. The legal heritages, the laws of the land, the sincerity and enforcing agencies, etc., are also important factors of the environment. The physical infrastructure., and the, road, bridge, transportation, telecommunication, etc, and the financial infrastructure banking company, insurance house, money market and capital market or stock exchanges the instruments in the financial market and the marketability of those; the religious patience, politeness of the public sentiment, etc ., cause the environment favorable or unfavorable for the business. Thus environment factors affect and contribute to the development and sustainability of the business in any region.