Understanding business environments Essay Example | Topics and Well Written Essays - 2250 words

Understanding business environments - Essay Example These elements include; competitors, customers, suppliers, marketing intermediaries, the general public, the economy, distributors, regulations, social and cultural factors, government activities and demographics (Lucas 2011, p.24). The internal business environment consists of the factors that are present within the business and affect the operations of the business. The elements of the internal business environment are; management, employees, production capacity of the business, the business policies, structural organization of the business, objectives of the business, the composition of its board of directors and features of the human resource department. Although the elements of the internal business environment affect how the business runs, they are not fully included as elements of the environment. P4 An economic system refers to the organization of the economy is. In a nation’s point of view, an economic system can be defined as the limited supply of elements of production such as; land, labor, capital and natural resources influence or affect the production of goods and services in the country. Because of the scarcity of these factors of production the government of that country has to make the decision of how it will allocate these resources to competing claims. To make this decision, the government would need to evaluate the opportunity cost of production of different products. After comparing the opportunity costs of producing that product, the government then makes the decision to allocate resources for production. In a command economic system the allocation and distribution of resources to certain sectors of the economy is controlled by central organizing body, usually it is the government. The government in this economic system also controls the distribution of the produced goods and services. In this economic system, the government main agenda is to try to reduce or eliminate the pursuit of profits by the producers, and ensure that basic goods and services are produced on the basis of the consumer’s needs and wants. The resources here would be allocated efficiently on the basis of social goals. This means that they