CHAPER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Individuals have needs and business organizations exist to satisfy the needs and wants of the
society. An appropriate method toward understanding form of business ownership will require the
provision of conceptual frame work for the word BUSINESS.

BUSINESS in a capitalist economy can be described as the sum of all the activities involve in the
production and distribution of goods and services for profit. This definition implies that business
assume responsibilities for two of the basic human activities; Production i.e. Fabrication of
physical objects through the use of men, machine, and material and distribution of these
product/service as the consumers. The second implication of the definition is that all business
organizations should strive to make profit. They are not charitable organizations, they must make
profit in order to survive and continue to provide employment for workers and good returns to the
owners.

Functionally, Business means those human activities which involve production or purchase of
goods with the object of selling them at a PROFIT. In the work of Uric and Hunt , a Business is
any enterprise which makes, distributes or provides any articles or service which other member of
the community need and are able and willing to pay for.

1.2 OBJECTIVES OF STUDY

The objectives of this research are as follow;

1. To provide a basic understanding on the concept of business environment.

2. To determine the problem impose by the influence of business environment in an
Organization.
 3. To recommend solution on environmental problems as they affect business
4. To recommend measure in order to make the environment more conducive for business

1.3 STATEMENT OF PROBLEM

The major focus of this study is to find out the extent at which business activity is influence by its
environment. To this end, the study will address itself for a number of specific problems which
include the following;

The impact of environment on business

The extent to which business activity are independent of some of the forces of the
environments.
How the business react to the change in business environment
How the business activity in any way influenced the environment

1.4 SCOPE OF STUDY

The study will look at the effect and impact of business environment on Cadbury Nigeria plc.

It will also look at the general view of business as applicable in Food & beverages companies in
Nigeria with emphasis on the type of internal and external environment.

1.5 SIGNIFICANT OF THE STUDY

The study will help the public and the private organizations realize the importance of the business
environment if the higher profits are to be obtained. It will also help in solving managerial
problem between management and workers. This study will also x-ray the problem of losses
experienced by firms using wrong statistics in establishing a business in an
undearly environment, this usually lead to the folding of such companies. The recommendations
will help to minimize the frequency occurrence of company liquidation and smoothen operations
of the organization increase in production and yield more profits.

1.6 LIMITATION OF THE STUDY

The researcher could not get the necessary information required for the project writing as the
respondents were unnecessarily secretive.

Time constrain was another limitation of the study.

1.7 DELIMITATION OF THE STUDY

Business is an inevitable activity in an economy. The factors that affect the business location
differ, base on the environment in which the target audience or markets are situated. Precise or
generalize environmental factors affecting business location cannot be conclusive.

The student who is making the research project must be friendly with the management of the
organization in order to carry out the research successfully. Limiting factors like the lack of
cooperation from organization to assist the researcher with information/data and also the financial
capacity has led to the restrict of the researcher.

1.8 RESEACH QUESTION

The major question of the research is highlighted below:

What types of businesses do organizations pursue?

How many lines of products do they manufacture?
Is there any change in the state of equipment used?
 Has the religion of the people has an impact on business location?
Is there after sale services to customers?
Is the location of business affected by the customer?
Do you think the relationship between the trade union and management is cordial?
Does the nations state of economy have any serious effect on job security?
Does the foreign exchange rate has impact and affect sales volume?

1.9 DEFINITION OF TERMS

ENVIRONMENTAL FACTORS:- It is the totality of forces and entities that surround and potentially
affect the growth and development of an organization. Environmental forces can be divided into
two; Macro and Micro environments

MICRO ENVIRONMENT:-These are the immediate environmental factors of the business

organizations e.g. the employee, shareholder, customer, etc.

MACRO ENVIRONMENT:-These are the forces that the organization cannot control or influence or
manipulate, e.g. demography, national or physical forces, etc.

ENVIRONMENT LOCATION:- This is geographical area where the business organization is being
influenced by the micro and macro environment factors.

INFLATION:- This is defined as continuous and persistent rise in general price level resulting in
reduced purchasing power for the consumer. During this period, money is devaluated in terms of
what it can buy or purchase.

FISCAL POLICY:- It is concerned with deliberate action which the government of a country takes
in the area of spending money and or levying taxes with the objective of influencing macro-
economic variables such as the level of national income or output, the aggregate demand level,
the general level of prices etc. in a desired direction.

MANAGEMENT:- It is a process of designing and maintaining an environment in which individuals

working together in groups can accomplish pre-selected missions and objectives effectively and
efficiently.