Just like human beings, business also does not function in an isolation. Business environment means all of the internal and external factors that affect how the company functions including employees, customers, management, supply and demand and business regulations. 

Businesses function within a whole gambit of relevant environment and have to negotiate their way through it. The extent to which the business thrives depends on the manner in which it interacts with its environment. 

Decision making is a managerial process and function which is greatly influenced by the broad characteristics of business environment. These characteristics are:

• Environment is complex
• Environment is dynamic
• Environment is uncertain
• Environment is multi-faceted.
• Environment has a far reaching impact.