The legal environment refers to the rules, laws, regulations, and judgments etc. The political environment of a country will mainly depend on the political beliefs and ideologies of the party in power at the state and central levels. The political environment of a country is the combination of three branches of the government – legislature, executive and the judiciary. Weather conditions, topographical elements, geographical location, climate changes and other ecological factors are a very important element in the macro environment of a business. This in turn may affect the crops and cause a shortage in raw materials such as jute, cotton, rubber etc. This change in our physical environment has started affecting the rainfall in certain regions. Let us take the example for global warming. This is especially true for manufacturing/production companies. 4] Ecology and Physical EnvironmentĮcology and physical environment play a huge part in the performance of any business. Also, the opposite is also true in case of a bust. The income will be higher, rate of interests will be low, new capital will be available etc. If there is a boom in the market then all businesses will benefit from the favorable conditions. It also sells its products and services in the same market.Ī market is never in one stable condition. A business depends on the economy for all its inputs and factors of production. The economic conditions of the economy and the performance of a business have a very close relationship. But at the same time of the technology used by the firm becomes obsolete due to such developments, then it can also be a threat to the firm. The technological developments can be a huge advantage for a firm. It includes products, manufacturing processes, techniques etc. Technology does not only confine to computers and IT services. In the times we live in, technology is constantly changing it is important that the business can keep up with the changes. Global Integration and Business Environment.Meaning, Features, and Importance of Business Environment.Browse more Topics under Introduction To Business Environment Especially in a country like India where the cultural influences are strong and complicated. So this has had a huge impact on companies.Ĭultural forces also have a significant impact on the success of a company in the long run. They work five to ten years more after sixty. So when the social environment changes it can have a direct or indirect effect on the company.įor example in recent time society has seen a shift, and people no longer retire at 60. The social values and culture of an environment play a huge role in the functioning of the company. (Source: KeyDifferences) 1] Socio-Cultural Environment A simple mnemonic to remember these factors is STEEP. Let us look at most important factors of the macro environment. It also helps them adapt to the constant changes in the environment. This will help them understand the dynamic nature of the macro environment. Primarily the company has to closely monitor the various elements of macro environment. Hence the success of the company, to a large extent will depend on the company’s ability to adapt and react to the changes in the macro environment. As a rule this environment is not controllable by the firm, it is to huge and to unpredictable to control. Macro environment is the remote environment of the firm, i.e the external environment in which it exists.
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