Dimensions of Business Environment:

(i) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise.

(ii) Social Environment: The social environment of business include the social forces like customs and traditions,values, socialtrends, society’s expectations from business, etc. Traditions define social practices that have lasted for decades or even centuries.

(iii) Technological Environment: Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.

(iv) Political Environment: Political environment includes political conditions such as general stability and peace in the coun-try and specific attitudes that elected government representatives hold towards business. The significance of political conditions in business success lies in the predictability of business activities under stable political conditions. 

v) Legal Environment: Legal environment includes various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— Centre, state or local. It is imperative for the management of every enterprise to obey the law of the land.