The business environmentIntroduction An organization does not exist in a vacuum. It exists in its environment, which provides it with resources and limitations. If an organization adapts to its environment, it will prosper, otherwise it will fail. An organization and its environment are interdependent and interact very intensively.o L he organization depends on its environment for the resources and opportunities necessary for its existence.o The environment provides resources to the organization only if the organization renders the desired goods and services to it.Effects of the environment on organizationsFactors Environmental impacts affect an organization in 2 ways. They set limits and pose threats, but they also provide opportunities and challenges. A change in government export policy can suddenly threaten an export-oriented organization. A reduction in the interest rate can provide cheap financing to an organization. Effect of Organization on Environment The effects of organizations on its environment are quite evident in the case of cigarette manufacturing; alcohol manufacturing, film making, pharmaceutical companies, etc. These organizations have a clear impact on their environment.Elements of the EnvironmentThe business environment in which companies operate can be divided into internal environment and external environment.A. Internal EnvironmentThis refers to all factors or forces that affect the daily activities of the company.1. Customers• As Peter Duckers said, “the ultimate goal of any business organization is to create a customer.” Today, for most products and services, the market is in the hands of the buyer. Customers e...... middle of paper ......product safety• Misleading advertising• Customer complaints3. The environment• Pollution• Noise• Restoration of land to natural uses4. Financial honesty and openness • Bribery and corruption • Corporate control and ownership • Executive pay and remuneration • Contributions to political parties Conflict between social responsibility and profitability1. Money invested in social responsibility comes from company profits.2. If shareholders do not receive what they believe to be a fair return on their investment, they are unlikely to contribute to the future needs of the company.3. Company managers are evaluated strictly on the basis of their economic performance; rewards go to managers who keep costs low. Therefore, social responsibility cannot be left to the whims of individual companies and managers must be enforced by law..