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Business Environment

Meaning of business environment

Business environment are circumstances or factors that influence business operations.
These factors could either be within the control of business and are referred to as internal business environment or are beyond the control of the business and are referred to as external business environment.

Internal environment

Internal environment refers to the factors within the control of the business.

Human resources ;

They are important in an organization in that they take an active part in production. Workers/employees with the relevant skills promote the success of the business

Financial resources;

The availability of finances enables a business to acquire relevant facilities required to achieve its objectives.

Management styles;
this is the formal arrangement of day to day activities and relationships of people in such a way that work is directed towards the achievements of set objectives. A business that is managed well will be successful.

Goals and objectives;

These are targets set by the managers of a business to be achieved. A business unit will only succeed if it has clear objectives which it strives to achieve.

Physical resources ;

These are tangible facilities such as buildings, machinery, motor vehicle etc which belongs to the business. When these facilities are made available and are organized properly they contribute to the success of the business



By the end of the topic you should be able to:

a) explain the meaning and purpose of a business

b) identify the various business activities

c) identify various types of business environment

d) explain how the various business environments influence a business.

Business And It's Environment

By the end of the topic you should be able to:

a) explain the meaning and purpose of a business.

b) identify the various business activities.

c) identify various types of business environments.

d) explain how the various business environments influence a business.

Business Environment

Meaning of environment

Meaning of a business

A business refers to any activity that is undertaken with an aim of making a profit.

Meaning of Environment

Environment refers to the surrounding or circumstances that influence something.
Meaning of business environment
Business environment are circumstances or factors surrounding a business which can influence its operations.
Business environment can either be internal or external.

Click sub-headings on the menu bar (above) to see examples of business environment.

External Environment

External environment refers to those factors beyond the control of the business

Economic environment

Economic environment refers to a situation that influences consumers'willingness and ability to buy goods and services for example salaries and prices of goods and services. Favourable economic environment will promote the success of business.


Population refers to the number of people in a given area. An increase in population will lead to an increase in demand for goods and services hence success of the business.

Cultural values.

These are the practice that regulates behavior of a society for example customs and beliefs. Culture dictates how people live and the products they consume. Business units should assess peoples' culture for them to serve them appropriately


This is where firms are trying to outdo each other in their business activities for example in selling their products. A business that will not be able to compete effectively will not succeed.

Government policy
This refers to rules and regulations that affect the business for example taxes and licenses. Favourable government policies will promote the success of a business.

Technology refers to the application of scientific knowledge in the process of production of goods and in the provision of services. Use of modern technology will facilitate success of the business.

Physical environment

Thisincludes infrastructure(roads,communication,power,and water,climate,relief(mountains,valleys) etc.Favourable physical environment will enhance business expansion

external business environment.

Insert a drawing of a business enterprise in rectangular form.
The edges should be fenced and have an entry gate more information on the script
Check script;

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