Business enterprise do not function in a vacuum. Business is an integral it of the ecology and social system and therefore, its decisions and performances are influenced by a host of diverse factors. Business environment refers to all those factors and forces which lie outside a business enterprise and are beyond its control. These factors and forces exercise a significant influence on business. There is a close and continuous interaction between business and its environment. These factors exert influence upon each other and do not operate in isolation. Therefore, any business unit has to continuously scan the environment and adapt to the environment as these factors are responsible for survival and growth of firms. Important decisions related to business, such as what to do, which should be the customer's segment, who will be targeted, what strategies to be adopted, where, when and how to do business, etc., are all influenced by a number of factors, known as business environment.