Concept of Business Environment | Organization Environment Interface | the major forces that affect organization environment relationships |Mero Solution

 

Concept of Business Environment :

Business environment refers to all internal and external forces that influence on the development, performance and results of a business organization. Environmental forces determine the effectiveness of an organization must adjust to or deal with these environmental forces in order to survive and succeed.

Q.What are the major forces that affect organization environment relationships? Describe the forces.
OR ,
Organization-Environment interface :

ANSWER :
All organizations operate in a macro that is general environment, which is defined by the most general elements in the external environment that can potentially influence strategic decisions of the organization. They create opportunities and threats to the organization. Therefore the major forces that affect organization environment relationships are general environment. They are as follows:

i. Economic environment:
The economic environment of business is largely determined by the economic planning and control, national income, industrial policies, monetary and fiscal policies, investments, savings, inflation, and international economic activities reflect economic environment. The economic environment dramatically affects company's ability to functions effectively and influences their strategic choices,

ii. Political environment:
Political environment is related to management of public affairs. Political environment mainly refers to the political structure, composition of bureaucracy, and ideology of the ruling government. Political philosophy can be democratic or autocratic. Democracy provides greater role to private sector. The political systems that exist in a country influence business organizations.

iii. Legal environment:
Legal environment refers to all the legal principles and policies that affect organizations activities. It is the framework of laws, regulations and court decision intended to encourage and control business activities, Thus, government opportunities, through tax laws, economic policies, and international trade rulings, can affect business.

iv. Socio-cultural environment:
Socio-cultural forces consist of the attitudes, beliefs, and values of individuals and groups in society. As the values, customs, and tastes change in the society change, our life is also changes by new things. Life styles and social values promote social change. It affects product choice.

v. Technological environment:
Technology consists of skills, operating methods, system ad tools that are designed to make work more efficient. It also largely influences organization by creating changes in jobs, skills, life styles, products, production methods and processes. Information technology, automation, computerization, and new material have influenced organization.