Business Environment : What Kind of Factors That Affect The Business Performances

May 23rd, 2010 by admin Leave a reply »

Business Environment : What Kind of Factors That Affect The Business Performances Image

One of the business value is business environment. It is important for us to understand the business environment that will lead of to do the best in business performances. This article will give some information towards some factors that might be affect on the business performances. Understanding the economic condition in some country is important to analyse the business environment around the world. It reflect to the level of production and consumption for a particular country. There two main types economic condition ; macroeconomic condition and also microeconomic condition.

Macroeconomic condition means the overall economic states of a country, while the macroeconomic condition focus on condition in particular business or industry. So, that is why, the economic condition that will influence our business performance is the macroeconomic condition. Well actually the business performance of most firm depends on the three macroeconomic factors: economic growth, inflation, and interest rate. First is economic growth, as we know the changing of economic growth for some country can changes in the general level of economic activity. For the example, when the change of general level of economic condition is higher that normal, the total income level of all U.S workers is relatively high, and then there will be higher volume of spending on products and service, and finally the firms that sell products and services should get high revenue. The condition will be different if the general level of economic activity is negative or lower than the normal. Next is inflation, it can increase the general level of prices over spesific of time. It can affect on company’s operating expenses and company’s revenues. Last is interest rate. It represent the cost of borrowing money that can make the firm get a high profitable. For the example is firm may postpone expansion and other  projects when interest rates are too high. Beside that interest rate can also influence the firm’s revenue .

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