The business environment is the interrelationship of all conditions,  Event and Influences that surround and affect to business.  Organisation do not function in an isolated vacuum.  They are managed by micro and macro environment.

Business environment
Business environment

 Micro environment is related to small area or immediate periphery of an organisation. It consists of internal environment and task environment.  Micro environment influences an Organisation regularly and directly.  With the micro or the immediate environment within which the firms operates, there comes the following issues'.


  1. The employees of the firm,  their characteristics and their organization. 
  2. The customer of the business. 
  3. Supplier of the firm and the link between the firm and it's supplier. 
  4. The local community. 
  5. The competition faced by the firm.
  6. The finance resources of the firm. 
The Macro environment has broader dimensions.  It consists of economic,  dimension.  It consists of economic,  technological,  political,  legal and socio cultural.  The issues concerning it are. 

  1. The threats in the competitive word in which the business operates. 
  2. The areas of technology which may cause a threat to its current range of products. 
  3. The bargaining power of suppliers and customer. 
Business environment is constituted by many factors. A firm is itself does not have much influence on the environment. But the collective behaviour of different firms may affect the environment.  The analysis of business environment assumes that environment remains external to the firm.  The internal dynamics of the firm is meant to adjust itself to the external conditions,  i.e.,  environment.