Business Studies Part I
Business Studies Part II

Business Environment: Dimensions

Dimensions of the business environment include economic, social, technological, political and legal conditions which are considered relevant for decision-making and improving the performance of an enterprise.

Various Factors Constituting the General Environment of Business

  1. Economic Environment: It comprises of factors that can affect management practices in a business enterprise. It includes interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.
  2. Social Environment: It includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
  3. Technological Environment: It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating business.
  4. Political Environment: It includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.
  5. Legal Environment: It includes various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— center, state or local.

The various dimensions of business environment being referred to in the above case are as follows:

  1. Social environment: Social Environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
  2. Technological environment: Technological Environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.

The various dimensions of business environment being referred to in the above case are as follows:

  1. Economic Environment: It comprises of factors that can affect management practices in a business enterprise includes interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.
  2. Technological Environment: It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.