Elements or Dimensions of Business Environment:
- Economic Environment: Interest rates, inflation rates, change in income of the people, stock market and the value of rupee are some of the economic factors that can affect management practices in a business enterprises.
- Social Environment: The social environment of business includes the social forces like customs and traditions, values, social trends, society’s expectations from business etc. Traditions define social practices that have lasted for centuries. For Example- Diwali, Id, Christmas and Guru Parv in India.
- 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. For Example- recent technological, advances in computers and electronics have modified the ways in which companies advertise their product.
- Political Environment: Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives to hold towards business.
- Legal Environment: Legal environment includes various legislation passed by the government administrative orders issued by government authorities, court judgments as well as the decisions rendered by the various commissions and agencies at every level of the government centre, state or local.
