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The Business Environment
 An organisation does not exist in a vacuum. It exists in its environment, which provides resources and limitations.
 If an organisation adapts to its environment, it will prosper, otherwise it will fail.
 An organisation and its environment are interdependent and interact very intensively.
o The organisation depends upon its environment for the resources and opportunities necessary for its existence.
o The environment contributes resources to the organisation only if the organisation returns desired goods and services to it.
Effects of the Environment on the Organizations
Environmental factors affect an organisation in 2 ways. They set limits and pose threats and they also provide opportunities and challenges. A change in the government export policy may suddenly threaten an export oriented organisation. A reduction in the rate of interest may provide cheap finance to an organisation.
Effect of Organization on the Environment
Effects of the organisations on its environment are quite obvious in the case…
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…ict between Social Responsibility and Profitability
1. Money invested in social responsibility comes out of the company’s profits.
2. If shareholders do not receive what they believe to be a fair return on their investment they are unlikely to contribute to the future requirements of the company.
3. Managers of the business are evaluated strictly upon economic performance; rewards go to managers who keep costs down.
Therefore, social responsibility cannot be left to the whims of individual firms and managers must be enforced by law.