Dimensions of Business Environment:
(i) Economic Environment: It consists of gross national product, corporate profit, inflation rate, productivity, employment rate, balance of payment, interest rates, rate of taxes and consumer income, debt and spendings. Economic environment has stronger influence over organisation's policies and actions.
(ii) Social Environment: It describes characteristics of the society in which the organisation exists. Literacy rate, customs, beliefs, values, lifestyle, demographic distribution and mobility of population are part of the social environment. It is important for managers to remember that although changes in the attributes of a society may come either slowly or quickly, changes will come inevitably.
(iii) Political Environment: It comprises those elements which are related to governmental affairs e.g., attitude of government towards various industries, lobbying efforts by corporate groups.
(iv) Legal Environment: It consists of legislation that has been passed by parliament and state legislature. This component prescribes rules and regulations for all the members of the business community.
(v) Technological Environment: Under this component, new approaches of producing goods and services, new procedures as well as new equipments are included. For example, computerization of business and industries is a fashion today.
