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What is Environmental Appraisal? What are the Stages Involved in Appraisal?

For finding business's available opportunities and risks, environmental appraisal is needed. Environmental appraisal means to analyze all the factors of business environments. Following are the main stages involved in environment appraisal.

1st Stage : Factors Affecting Environmental Appraisal

Following are the main factors affecting environmental appraisal

a) Factors relating to environment

We can not evaluate equally two organisation in same environment. we have to study every organisation's complexity and flexibility.

b) Factors relating to Organisation

Age of organisation will affect our environmental appraisal. We also see the organisation's size for doing business and its market type. What are the services and products, it is providing?

c) Factors Relating to Strategies

Policy makers  play  important role in appraisal. Age, education and experience of policy maker  will affect the environmental appraisal.

2nd Stage : Identification of Environmental Factors 

In second stage we have to identification of environmental factors on the basis of following issue

a) Critical Issues

b) High Priority Issues

c) Low Priority Issues

3rd Stage :  Structuring the Environmental Appraisal 

This is the third stage of environmental appraisal. In this stage, we create the structure of environmental appraisal. One side of structure will be our strengths and other side will be our weaknesses. By comparing both, we estimate our surviving power in the environment of business. 



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Objective of Business Environment

Following are main objectives of business environment:
1. Knowledge of Information 
By studying the business environment, we can know the changes of business. This information is very useful for our business. Every businessman should aware current environment of business. With this, he can think the future of his business in such environment. 
2. Basis of Decisions 
One of main objective of the study of business environment that it can provide all the information which is needed for taking good decisions. Suppose, you completed your internal business environment study. With this study, you can take decision relating to purchase, sale, salary and price because you know your competitor, you know your suppliers and you know your customers. 
3. Helpful in making of Policies 
For making good business policies, we need to know and scan business through business environment. 
4. Technological Planning 
Today, technology is changing very fastly. 3 years ago, I have to search software for downloading …

Limitation of Business Environment Analysis

Following are main limitation of business environment analysis:

1. Unexpected and Unanticipated Events 

We can not tell unexpected and unanticipated events in business environment analysis. Sometime, business has to face unexpected happenings. So, there will no benefit of business environment in these cases.

2. No sufficient Guarantee

Business environment analyst does not give any guarantee whether all events will happen as per estimation in business environment.

3. Uncritical Faith 

Sometime data may be incorrect. So, decisions on basis of these analysis may be risky for business.

4. To much information

Sometime too much information relating to business environment analysis will create the doubt in businessmen.

Technological Environment

Definition of Technological Environment :-

“Technological Environment means the development in the field of technology which affects business by new inventions of productions and other improvements in techniques to perform the business
 work. "