VOCABULARY. physical item – материальные предметы

physical item – материальные предметы

shareholder – акционер

business activity – деловая активность, коммерческая деятельность

self-sufficient – самодостаточный

basic existence – примитивное существование

traded those goods for others – обменивали одни товары на другие

businesses – зд. Предприятия

Business Environment – деловая среда, условия ведения бизнеса

Conditions – условия

Enterprise – предприятие

The term Business Environment is composed of two words ‘Business’ and ‘Environment’. In simple terms, the state in which a person remains busy is known as Business. The word Business in its economic sense means human activities like production, extraction or purchase or sales of goods that are performed for earning profits.

The aim of all business is to combine the factors of production to make products which will satisfy people’s wants. These products can either be goods– physical items such as cars and shoes which we can touch and see – or they can be services, such as insurance, tourism or banking.

What would life be without business activity? In simple, undeveloped societies, businesses do not exist. Everybody attempts to do everything for themselves – they are self-sufficient. With their own plot of land and by their own efforts, such as hunting, they attempt to survive and produce enough for their own needs. This is a very basic existence. By a gradual process of specialization, people began to concentrate on what they were best at. They then traded those goods for others made by people who had skilled in other areas. In this way, businesses began to be formed, and trade and exchange of goods expanded. In today’s world, most people work in one job for a weekly wage. With this money, they are able to purchase a wide range of goods and services produced by many different businesses.

Businesses can be small – just one person, for example – or large. Some businesses employ thousands of people with operations in many different countries. Businesses can be privately-owned or owned by the state. They can be owned by one person or by thousands of shareholders. Whatever their size and whoever owns them, all businesses have one thing in common – they combine factors of production to make products which satisfy people’s wants.

Business activity therefore:

- combines scarce factors of production in order to produce goods and services

- produces those goods and services which are needed to satisfy the needs and wants of the population

- employs people as workers and pays them wages to allow them to consume products made by other people.

On the other hand, the word ‘Environment’ refers to the aspects of surroundings. Therefore, Business Environment may be defined as a set of conditions – Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization. Business Environment has two components:
1. Internal Environment
2. External Environment

Internal Environment includes 5 Ms i.e. man, material, money, machinery and management, usually within the control of business. Business can make changes in these factors according to the change in the functioning of enterprise.

Those factors which are beyond the control of business enterprise are included in external environment. These factors are: Government and Legal factors, Geo-Physical Factors, Political Factors, Socio-Cultural Factors, Demo-Graphical factors etc.