Introduction to Business Environment
Business environment is composed of two words ‘Business’ and ‘Environment’. In economic sense ‘Business’ means human activities like production, purchase or extraction or sales of products or services that are performed to earn money. Meanwhile ‘Environment’ means the aspect of surroundings. Business environment is the set of conditions institutional, political, economical, legal or social that is uncontrollable and affects the functions of the organization. Business environment consists of two components: external environment and internal environment. Internal environment includes of 5 M’s like management, money, machinery, material and man. On the ...view middle of the document...
a. To make (produce) items or goods to be sold: e.g. shirt factory, shoe factory, furniture maker, jeans factory, computer manufacture, boat builder and dairy farmer;
b. To provide services to be sold: e.g. banks, building societies, dentists, police, hospitals and insurance companies.
All organizations are affected by the environment (both nationally and internationally) and by the government of the day. They react and interact to each other and to professional bodies such as those of accountants and solicitors.
Thus the nature and types of organization will be constantly changing and developing in reaction to environmental changes; a business that starts as a sole trader may develop into a partnership, then a limited company, then become part of a group of companies, then be taken into state ownership and then, following a change of government, be privatized and returned to the status of a company.
Sole traders are single individuals carrying on a business on their own. Such businesses are usually small, although large ones with some managerial delegation do exist. The sole trader earns the profit or covers the losses of his or her venture.
The mission of a sole trader is to provide a service for a client and charge for that service. As with definition, a sole trader is usually a person who works under the listing of a business they legally own, control and 'provide' for - they pay their own gains tax (No matter how much), and own, and are the company as its registered. This can also be known as self employed. They are, however, responsible for any debts which may happen, and cannot rely on the financial protection of being employed.
A partnership is two or more persons associated for the purpose of a business or profession. It is one stage beyond the sole trader and often arises from the need to introduce more capital or to combine skills. Like a sole trader, the partners exert considerable influence over the business and are fully liable to outside parties in the event of financial failure.
Partnership missions provide opportunities to live out God’s call for fellowship with new friends down the street and around the world. It is an investment in our partners, ourselves and the church sending us as we explore how God is at work through our partners.
There are multiple ways to experience partnership missions:
* Choose a project
* Join another team
* Explore a relationship with a people group
Companies or corporations are distinct artificial ‘persons’ created in order to separate legal responsibility for the affairs of a business from the personal affairs of the individuals who own or operate it. Since a company exists only to establish legal responsibilities, it can only be created, operated and dissolved in accordance with the legal rules governing it (e.g. the Companies Acts in the UK).
Consequently, the business debts and liabilities are those of the...