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The term business is understood and explained in different

ways by different people.

For some, business is an activity, for some it is a method of

transacting, for some others, it is a method of money
making and some people argue that business is an
organized activity to achieve certain pre-determined goals
or objectives

Dictionary meaning of business is: the act of buying and

selling of goods and services, commerce and trade.

Based on all these meanings of justness, we may define

business as: gainful activity through which various
elements of society conduct exchanges of the desirable
things.
But now a days, business is viewed more as a profession or
occupation.

From the days of family owned business, we have reached a

stage of professionals and experts starting and running
business.
It could also be noted that business administration and
business management have emerged as the most
prospective field of study and occupation.

Unlike the olden days, a number of interests are involved in

business today, viz. owners, investors in business,
suppliers, customers, employees, government, stake
holders, administrators, managers, strategists, executives,
and so many others.
Hence, every business activity has to meet the goals or
aims or objectives of these various groups of people. That in
fact, has made business a most complicated activity.
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Business involves activities, which links an organization with outside

world.
Within an organization, a business is governed by the behaviour of its
employees, management or decision makers.
But externally a business is influenced by a score of factors, which
range from customers to competitors and government. Therefore, a
business cannot be independent of the influence of these external
factors.
It should also be noted that a business has absolute control over all the
internal factors, it has no control over the external factors. So often it
becomes necessary for business houses to modify their internal
decisions and policies, on the basis of the pressure from external
factors This highlights the need to be ever-cognizant of changes and
influences of external factors so as to conduct business on healthy
lines.
It is in this context that business environment assumes all significance.
Business environment therefore refers to the influences and pressures
exerted by external factors on the business. The following Figure would
help to understand the various factors which constitute the business
environment.
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