I guess that most of you will agree that there is always been a constant give and take policy between business and environment as they are closely related.

Wondering how?

The inputs and information are received by business from the environment. Then the return or outputs are given back in the form of goods and services.

Amazing isn’t it?

There are various factors that must be considered by a business entity:

1.       Interests of consumers

2.       Interests of workers

3.       Interests of suppliers

4.       Interests of shareholders

In addition to these, the business organization needs to face the threats given by environment and should address them in a positive manner.

Now let us see the different ways that both these interact with one another.

1.       Sometimes business firms might decrease the production due to economic conditions. While sometime they might pile up their productions to sell them later when the economy booms.

We have also heard of situations wherein we hear that a particular good is scare. This might be an artificial situation created by firms. In this way both of them are getting affected.

2.       Have you heard about SWOT? Strengths, weaknesses, opportunities and threats helps both the entities in different ways. They integrate them together.

3.       Business firms switch to take bank loans or take money from their savings when financing organizations increase their lending rates. This adversely will force the financial firms to reduce their rates. In this manner, they both interact with each other.

4.       Business firms share their information to environment in the form of annual reports. In return they receive many information from the environment too. So what are the information? Firms gather info on developments in technology, the policies and implementations in their competitor organizations, consumers’ preferences.

As you would agree that the economy will progress only when these two have an effective interaction. This interaction needs to be continuous. This will give way to new ideas and expectations.

Courtesy:

 Business and Environment

https://www.businessmanagementideas.com/management/strategic-planning/relationship-between-environment-and-business/4787