Business means those activities which are performed to earn profit and generate wealth. These activities include manufacturing of goods, trading of goods and providing services.
So business is an economic activity, which is related with continuous and regular production and distribution of goods and services for satisfying human wants to earn profit. These business activities link an organization with the outside world.
The term business environment means the sum total of all forces and factors which are internally and externally affecting the business.
Every business organization operates in its unique environment. Environment influences business and also gets influenced by it. A business cannot function free of interacting and influencing forces. Success of every business depends on how it adapts itself to the environment within which it functions.
FEATURES OF BUSINESS ENVIRONMENT ARE-
• Totality of external forces
• Specific and general forces
• Dynamic nature
• Multi- faceted
IMPORTANCE OF BUSINESS
• First mover advantage
• Identification of threats
• Coping with rapid changes
• Improving performance
• Giving direction for growth
• Meeting competition
• Image building
• Continuous learning
A vision statement describes the desired future position of the company. Vision statement is where you want your business to reach at. It is a future dream for your business.
A Vision Statement defines what business will do and why it will exist tomorrow. Vision Statement must inspire and motivate staff, create confidence, and represent business by articulating a common vision of the future.
Vision is your ultimate goal, your mission is how you will get there. Your mission explains why your business exists. Mission statement must be easy to understand.
It can be crafted in the following steps:
— What does your company do?
— Who do you do it for?
— Where do you exist?
— How does it do it?
— Why does your company do it?
TYPES OF BUSINESS ENVIRONMENT
Internal environment is sum total of all the forces with in the business organization. Internal environment contains the owner of the business, the shareholders, the managing director, the non-managers, employees, the customers, the infrastructure of the business organization, and the culture of the organization
Components of internal environment
It includes 6 Ms i.e.
• Man (Human Resource).
• Money (Financial Factors).
• Marketing Resources.
• Machinery (Physical Assets).
• Management Structure and Nature.
• Miscellaneous Factors
External environment of a business organization is sum total of all entities that exists outside its boundaries and have significant influence over its growth as well as on its survival.
Types of external environment
These online MCQ mock tests and MCQ questions includes all main concepts of the chapter (Business Environment) in CS Foundation Business Environment and Entrepreneurship computer based MCQ Exam.