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The Business Environment


The business environment has been described as the framework within which a business operates and competes. There are two main facets to the business environment-the internal environment and the external environment. The internal environment covers aspects of the business that deal with the utilisation of resources from the external environment to manufacture products which are then sold to its customers.{{more}} The external environment consists of all outside institutions and forces that influence or can influence the business’ ability to achieve it goals and objectives. Some of the main factors in the external environment are competitive, economic, political, technological and cultural forces.

A business manager should be skilled in knowing how to analyze and improve the ability of his business to survive and develop in the changing business environment. He must be able to identify, evaluate, and respond to the various opportunities and threats in the environment.

Having a sound management system enables the manager to have the right tools to analyse the occurrences that are taking place in the business environment and at the same time help him to meet the needs of his customers. It is necessary that constant monitoring and adjustment to the environment take place if the enterprise is to survive. It must be noted that any instability in the business environment has the ability to either threaten the existence of the firm or create for it new opportunities. It is therefore, necessary, that managers be able to anticipate changes in the business environment and come up with the right strategy to create the best fit between the business’ strengths and the opportunities in the environment. Where adjustments are needed, it is expected that the manager will be able to make the necessary accommodations in the business environment without compromising the viability of the business.

– Submitted by the Centre for Enterprise Development Inc. (CED) a non-profit company that provides business development services to the local private sector.

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