13B quiz: Concept of Environment
Document Summary
Environment literally means the surroundings, external objects, influences or circumstances under which someone or something exists. The environment of any organisation is the aggregate of all conditions, events and influences that surround and affect it. davis, K, the challenge of business, (new york: mcgraw hill, 1975), p. 43. Environment refers to all external forces which have a bearing on the functioning of business. The environment includes factors outside the firm which can lead to opportunities or a threat to the firm. A slight change in the reserve bank of india"s monetary policy can increase or decrease interest rates in the market. A slight shift in the government"s fiscal policy can shift the whole demand curve towards the right or the left. Importance of business environment: environment is complex: The environment consists of a number of factors, events, conditions and influences arising from different sources. All these interact with each other to create new sets of influences: it is dynamic:
