Answer the following question.
‘Konark Ltd.’ Is an electronic good manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a competing electronic good manufacturing enterprise, ‘Nova Ltd.’ situated in Mumbai. Both Konark’s and Nova’s operations are affected directly by the investors, customers, competitors, and suppliers, which are unique to their respective locations. In addition to this, individual firms of this field are affected indirectly by the factors like the money supply in the economy, the composition of the families, the technological changes, etc.
1) Identify and state the feature of the concept discussed in the above paragraph.
2) Also, state any four points of importance of this concept.
1) The feature of the business environment discussed in the above paragraph is specific and general forces. Specific forces refer to the external forces or institutions which exist outside an organisation and with which an organisation has to interact during its working course. General forces refer to those external forces which exhibit broad trends and conditions affecting all organisations.
2) Points highlighting the importance of the business environment for business enterprises:
- Accumulating useful resources: Environment offers itself as a source of inputs such as raw material, machinery, and labour for the running of an organisation. In return, the business supplies the environment with its output. This is possible only if the enterprises have an understanding of what the environment desires and what it can offer.
- Adjusting to changes: the Business environment is dynamic in nature and is prone to numerous socio-economic changes. A careful analysis and understanding of the environment help an enterprise to adapt with these changes and to take timely action.
- Formulating plans and policies: Understanding and analysing opportunities and threats help a business frame suitable plans and policies in view of the current scenario.
- Improving performance: The main aim of analysing and understanding the environment is to improve a firm's performance and efficiency. The future of an organisation depends on how closely it bonds with the environment and thrives to survive its ever-changing policies.