A business environment is the overall collection of internal and external factors that impact business staffing, operations, and sales. It is the sum total of all external and internal factors that influence a business. The business environment can be divided into two categories: internal and external. The internal environment consists of factors within the organization that are in control of the business, such as employees, management, and corporate culture. The external environment consists of factors outside the organization that are not in control of the business, such as economic, political, legal, demographic, social, competitive, global, and technological factors.
The external environment can be further broken down into micro and macro environments. The micro environment includes local forces that affect the businesss ability to serve its customers, such as suppliers, customers, competitors, and other stakeholders. The macro environment includes larger societal forces that affect the survival of the organization, such as the demographic environment, the political environment, the cultural environment, the natural environment, the technological environment, and the economic environment.
Understanding the business environment is important for businesses to adapt to the social environment and change, so as to achieve the purpose of enterprise marketing. Business owners and managers must continuously study the environment and adapt their businesses accordingly to compete successfully.
