Business Environment in Oman Introduction Understanding the environment

Business Environment in Oman

Introduction Understanding the environment within which the business has to operate is very important for running a business unit successfully at any place. Because, the environmental factors influence almost every aspect of business, be it its nature, its location, the prices of products, the distribution system, or the personnel policies. Hence it is important to learn about the various components of the business environment of Oman which consists of the economic aspect, the socio-cultural aspects, the political framework, the legal aspects and the technological aspects etc.

Importance of Business Environment (a) Determining Opportunities and Threats: The interaction between the business and its environment would identify opportunities for and threats to the business. It helps the business enterprises for meeting the challenges successfully. (b) Giving Direction for Growth: The interaction with the environment leads to opening up new frontiers of growth for the business firms. It enables the business to identify the areas for growth and expansion of their activities. (c) Continuous Learning: Environmental analysis makes the task of managers easier in dealing with business challenges. The managers are motivated to continuously update their knowledge, understanding and skills to meet the predicted changes in realm of business.

Static Environment Business is affected by multiplicity of factors and forces, which constitute the environment of business in Oman. As most of these factors are uncertain and also unpredictable, the business firm will not have any control over them. However, certain factors may remain fairly static.

Dynamic Environment In a dynamic environment, factors in the environment change very quickly, which cannot be anticipated easily. Oman development in the fields of transportation, communication etc. has made the world a closer one. Besides, economic environment also changes over time. In a dynamic economy, population, human wants, capital resources, technology etc. are continuously changing. Consequently, economic environment also changes. The business manager should be very alert in foreseeing the changes in dynamic factors of the environment. He should revise the business policies as per the changes forecasted.

Internal Environment Internal environment refers to the internal factors of the business. It influences the strategy of business operations and decisions. The value system of the founders of the business enterprise, the mission and objectives of Oman business organization and the business policies adopted contributing to the success of the business are all matters connected with the internal environment of the business in Oman.

External Environment External environment refers to those factors, which are outside the business. The business unit will not have any control over these factors. Almost all the factors we had discussed already under economic and non-economic environment hold good for external environment of the business. However, this external environment of business has been classified into two namely, Micro environment, and Macro environment.

Micro-Environment Micro environment includes those factors, which act and react in the immediate environment of the business enterprise. They affect the performance of the company. It includes suppliers of raw materials, marketing intermediaries, competitors in business, customers and also the public.

Macro Environment The macro environment consists of societal forces, which affect the micro environment. These are demographic factors, economic factors, technological factors and also political and cultural forces. International factors also fall within the scope of macro environment. It is obvious that the factors in the micro environment are more intimately linked or associated with the business unit than the macro factors. The micro or macro factors need not affect all the firms in a particular way.

Market Environment and Non-Market Environment We may distinguish between market environment and non-market environment. Market environment tells about how the business firm’s environment Oman is influenced by market forces like demand supply of the products of the firm, the number of firms competing in the Oman market, similar products etc. resulting in either pricecompetition or non-price competition by the competing firms. Nonmarketing environment denotes the laws enacted by the Government of Oman, social traditions and other factors.

Human Objectives Business is run by people and for people. Labor is a valuable human element in business. Human objectives of business are concerned with the well-being of labor. These objectives help in achieving economic and social objectives of business

Conclusion As a conclusion, business environment involve internal and external environment. Business environment is important for an organization to identify the weaknesses and threats. A firm maybe strong in certain areas and it may be weak in some other areas. The firm should identify weaknesses and threats so as to correct it as early as possible. This helps an organization to reduce the risk of getting failure in their operation and development in new product. PEST analysis and Porter’s Five analysis is used to find out the external environment, where, value chain analysis and SWOT analysis is used to find the internal environment of an organization.

Ø www. muscatdaily. com/. . . /Business/Oman-has-a-professional Ø www. omaninfo. com Ø https: //oxfordbusinessgroup. com Ø www. globaltrade. net/f/business/Oman/Business-Environment Ø www. omanobserver. om/business-environment-oman-gets-major-boost-eservices