Seven essential characteristics of business environment are: 1. Totality of External Forces 2. Specific and General Forces 3. Inter-Relatedness 4. Dynamic Nature 5. Uncertainty 6. Complexity 7. Relativity!

1. Totality of External Forces:

Business Environment is the sum total of all the external factors that influence the functioning of the business.

Hence, it can be called as the comprehensive mega force consisting of all external inputs.

2. Specific and General Forces:


Business Environment is made up of both specific and general forces. Specific forces refer to the customers, competitors, investors etc. which have a direct effect on the day to day working of the business while the general forces refers to social, political, legal, technological and other forces which indirectly affect the operations of a business.

3. Inter-Relatedness:

Various elements of business environment are very closely related to each other. For example, at present there has been an increase in demand for products like diet colas, fat free cooking oil, sugar free products etc. due to increase in awareness for good health among the consumers.

4. Dynamic Nature:

Business environment is dynamic in nature i.e. it keeps on changing. For example, change in government policies, change in taste and choice of the consumer, change in technology etc. Such changes could be triggered by internal or external factors.

5. Uncertainty:

Business environment is very uncertain as one cannot predict as to what will happen in future especially in case of fashion industry, film industry and information technology. Its dynamic nature makes it all more challenging to handle uncertainty.

6. Complexity:


Many forces constitute the business environment. Thus, it becomes very difficult to know exactly the relative influence of a particular force (social, economic, technological etc.) on the functioning of a business enterprise as all these factors are related to one another.

Managers constantly need to simplify this complexity as much as possible all the time. For example, if there is change in demand of a product, it becomes very difficult to determine the separate influence of social, political, technological, economic or legal forces etc. on such a change.

7. Relativity:

Different countries and different regions have different business environment. Thus, business environment is a relative concept. For example, technology in Japan differs from that in India or say Pakistan, China etc. Hence, a multinational enterprise has to keep this aspect in mind while formulating its policies for different countries.