What is the business environment and why is it followed around uncertainty?
Organisations constantly need to build models and follow strategies around uncertainty. This because, the business environment has a dynamic nature, it keeps on changing. Uncertainty can be managed only with the correct information and sufficient knowledge about the problem. Brexit is an example of a micro-economic event that influences a company’s operating situation and which consequences are still unable to be predicted. With the Brexit Referendum in 2016, businesses both UK and European Union organisations are facing a deep period of uncertainty which will continue in the years ahead as until UK-EU relationship won’t be defined.
Consequently, there will be implications for supply chains, import and exports and employment. Businesses need to be prepared to deal with uncertainty and tackle new challenges that UK’s withdrawal from the EU will bring.
First of all, is important to define the concept of business environment. The term ‘business environment’ includes all the external forces, factors and institutions which affect the functioning of an organisation but are out of its control. For this reason, the external environment is complex, volatile and interactive which influence a Businesses’ location, the prices of products, the distribution system and the personnel policies. The Brexit case is one of this external factor which it cannot be ignored in any meaningful analysis of business activity.