A business firm is an open system. It gets resources from the environment and supplies its goods and services to the environment. Business Environment is the most important aspect of any business. The term ‘business environment’ connotes external forces, factors and institutions that are beyond the control of the business and they affect the functioning of a business enterprise. These include customers, competitors, suppliers, government, and the social, political, legal and technological factors. While some of these factors or forces may have direct influence over the business firm, others may operate indirectly. It is dynamic in nature. It helps in identifying business opportunities, tapping useful resources, assists in planning, and improves the overall performance, growth, and profitability of the business. It helps in identifying opportunities and making first mover advantage. Early identification gives an opportunity to an enterprise to be the first to identify opportunity instead of losing them to competitors. There are various types of business environment like Micro Environment and Macro Environment.

Sahreen Younis Ahanger

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