The entrepreneurial environment is the aggregation of all those external conditions and effects, which affect the life of living beings and development entrepreneurship. So There are many characteristics of entrepreneurial environment.
Characteristics of Entrepreneurial Environment
Following characteristics of entrepreneurial environment may be visualized:
1. Integral Part of Human Life
The environment is an integral part of human life because man is born, nourishes and develops in the environment.
The environment is the aggregate of all those external conditions and effects, which has an influence on human life and its development.
2. Environment is Affected by Various Factors
The environment includes various factors or elements, physical, economic, social, political, cultural, technological, moral, statutory and others.
These factors not only affect each other but also affect the environment and also get affected by the environment.
Related: 11 Non-Economic Environments Affecting Business Environment.
3. Dynamism or Change-Ability
The environment is dynamic, and not stable or everlasting, because:
- Regular and new changes take place in all types of environment.
- The policies, methods, and Systems go on changing from time to time.
- The strategies, policies, and objectives also go on changing, with changes in all factors.
4. Regular Contact with Environment
For every person, it is essential to keep himself regular in contact with the environment, so that knowledge about changes and happening in the environment may be observed.
He may work or may get the work done, in accordance with changes in the environment. I like two-way communication.
5. A Person is the Product of Environment
Human beings are the products of the environment. A person works basically according to the environment, whether good or bad, in which he gets birth and develops.
He also tries to adjust himself according to the environment.
However, he may make slight changes in the environment, using his intelligence, knowledge, capacities, conduct, and behavior. But, possibilities of basic changes remain low.
Related: 16 Factors Affecting Economic Environment (With Examples).
The environment is uncontrollable since it is the composition of such factors which are beyond the control of the business, like government policy, statutory controls, social structure, politics, and foreign cooperation, etc.
Although the entrepreneur tries to control them with his knowledge, experience, skills, and efficiency, it is not normally possible to make significant changes.
7. Geographical Areas
Environments are of two types: internal and external.
The entrepreneur is capable to control the internal environment (supplies, consumers, employees, competitors, and intermediate) etc.
But external environment (political, economic, Technical, statutory) have a large geographical area, which reduces or increases the scope of the Institution.
“Environment includes all those external factors, which lead the institution towards opportunities and risks.”
8. It Brings the Challenges
The environment in present scientific age put challenges before human beings.
The scope of the entrepreneur has significantly enhanced.
Special attention in all countries is being paid to the production and use of Computer technology, communication, data processing, use of atomic energy industry and new technology, etc.
Various challenges like environmental balance, control of anti-social activities, worldwide pressures, providing dignity to human resources, and safeguarding of human health are emerging in the dynamic environment.
Related: 15 Importance of Entrepreneurship (in Modern Economy).
9. Relationship with Goals and Functions
The environment has a relationship with the goals and functions of the person or the entrepreneur of the institution.
The environment of any organization is the association with external knowledge, conditions, effects, and forces, which have a relationship with the objectives and functions of that organization.
10. Compulsion of Changes
Each Organisation and institution is the result of its environment.
The form of the institution is determined by the environment.
Since the environment or its components are dynamic and changing, it is necessary that the institution should make changes in its policies and programmes, accordingly.
For example, the changes in tastes of the consumer’s fashion, designs, Lifestyle, the standard of living, governmental laws, and Systems, employees, investors and the interests of The Financial Institutions compel the business Institutions to make suitable changes accordingly.
Related: 15 Roles of Entrepreneur as Innovator (Explained).
11. Responsible Towards all Elements
The entrepreneur is responsible for all components or elements of Environment, Government, consumers, the common man, employees, investors, government organizations, competitors, Institutions, society, and the nation.
Interests of all them are to be kept in mind. in this decision making for a business organization.
12. Creation of Utility
Whether the entrepreneur gets from the environment for his work, he returns back to the environment.
In this process, he carries out the transformation of resources so that various types of utilities may be created like the place, form, time and rights, etc.
These utilities satisfy the needs and expectations of the customers.
13. Exchange of Information
Every entrepreneur also exchanges information with the environment, along with the exchange of sources.
This information may be related to economic, social, political and moral aspects. He manages, in accordance with this information.
Besides, the entrepreneur also provides information to the environment and its various groups like the government, consumers, investors, Employees, Associations and the common man, on day to day basis.
This way, the entrepreneur exchanges information with the environment.
Related: 20 Importance of The Study of Business Environment.
14. Environment is Geographical or Social
The environment may be geographical or social, the Geographical environment includes geographical conditions, climate, physical, energies, natural vegetation, mountains, Plateau, Plains, oceans, rivers, waves, and ports, etc.
Whereas social environment includes traditions, systems, value, social customs, Outlook towards Comforts and conventions, devotion towards family, love for art, educational standards, lights of power, affection, and friendship, etc.
15. Other Elements
1. The Environment provides various opportunities to the entrepreneur. He carries out various activities perceiving the environment. He accepts the challenges, removes the obstacles and attempts to make the environment balanced.
2. He lives and works in uncertainty. Future events may be assessed, to a certain extent, by studying the environment. But, The entrepreneur cannot make him fully assured.
3. The environment specifies the extent of the work of the entrepreneur, controllable components and restrictive pressures, etc. within which the entrepreneur has to work.
4. Every entrepreneur has to satisfy the requirements and Expectations of his environment. An Entrepreneur who cannot fulfill them may hardly expect to exist and rather persists.
5. The proper study of the environment, proper assessment of external effects and Predetermination of external changes and opportunities are very difficult for the entrepreneur.
Thus, now you know the important characteristics of entrepreneurial environment.
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