Skip to content

News Alert:

Whether in Freezone or Mainland, Corporate Tax registration is must!

Email

info@bsauditing.com

Phone

+971 4 570 7357

Whatsapp

+971 52 322 6455

BS Auditing Observation: How Business Environment Affects Business Health

  • by

Bader Saleh Auditing of Accounts was established in the UAE in 2006, offering its auditing, Accounting, and Tax consultancy services. A highly experienced and professional team of experts ascertain quality services to its clients without compromising quality and guarantee 100% client satisfaction, whether small or big. BS Auditing has a track record of providing excellent services and tailor-made solutions in corporate, financial, and technical fields.

Operating in the UAE for more than 15 years and a client base in the JAFA, DAFZA, RAKEZ, Hamriyah, and SAIF Zone, our professionals have been through every thick and thin environment the businesses in the UAE have gone through in the past one and a half-decade. Based on these observations, BS Auditing analyzed the effects of the environment on the overall business health here in UAE.

What is a Business Environment?

Factors both macro & micro, internal and external closely related to the activities of a business constitute to make a Business Environment. These factors impact the business results directly and can have both negative and positive effects, which depict the business’s performance and growth.

How Business Environment Effects Business Health

A business must always be considered an individual, just like us humans. Its needs, want, and reaction towards any change is very similar to us humans; if the environment is favorable, the business tends to grow at a pace as it should, whereas if a business gets to face an unfavorable or harsh environment, it will show the negative signs as well.  In the case of a business, unlike humans shows the sign of the change it goes through whenever it experiences a change in macro or micro, internal or external, but cannot react to those changes.

Here, the role of people operating the business is commonly known as management. It is the common responsibility of the owners and management together to preempt and forecast any change that the business may have to encounter in the future and take necessary steps to get the business ready to face the upcoming challenges without taking much of a hit if the environment is unfavorable and to make the best of the opportunity it comes across vice versa.

Making the First and Right Move

BS Auditing has observed that a business can make the best of any situation created by the macro/micro, external/internal if the management preempts the change before time and takes the right decisions. E.g., India has one of the largest telecom sectors in the world, Airtel a telecom company there through observing their business environment, where the user of its services plays a vital role in environment building, identified the need for a faster network, especially in terms of the internet, they made the right move and were the very first company to introduce 4g technology to the Indian market. Although other service providers followed its footsteps, Airtel had an edge in financial and customer base aspects.

Helps Identify Threats and Timely Warning Signals

BS Auditing believes through its experience that if a business can identify upcoming threats and has an effective warning signal system intact, such a business can very well handle any situation that it comes across.

Consider a business operating very well in ICAD-II in Abu Dhabi but has not secured an electricity connection. Its operations are dependent on the Diesel fuel generators; it is the core responsibility of its management to have a comprehensive system in place that forecasts the Diesel requirement and be efficient enough to manage the optimum Diesel inventory.

Due to the negligence of an individual or a system glitch, Diesel was not ordered in time before the Eid holidays, and the factory is supposed to start its production operation on the second day of Eid. It is for sure that it will have to sacrifice at least a day’s production since the supply won’t be possible before the 3rd day of Eid.

An efficient system and warning system enables the business to withstand any circumstances generating positive results even if the odds are not in its favor.

Environment Tapping

The environment provides the inputs for any business it is exposed to. Both Internal and External environmental factors are being referred to here. The quality of inputs that the business, if offered, translates into the quality of output the business presents in reaction.

The environmental inputs are finances, workforce, power/energy, raw materials, natural resources, etc. External inputs from the “External/Macro Environment” for a business. Making perfectly balanced choices from the offered external inputs is the duty or responsibility of the internal environment, i.e., owners, management, machinery, and workforce employed for the business or the “Internal/Microenvironment.”

This reaction to the environment, both external/internal macro/micro, is termed Environment Tapping.

Prompt Reaction to the Rapid Change in Environment

Any business’s positive or Negative response is attributed to the rapid change in the environment it is exposed to. The business environment is changing rapidly, never experienced before, whether technological, economic, weather, or human behavior. The pace of all the changes is rapid.

Declining brand loyalties, market saturations, global competition have resulted in a more demanding customer base in all the fields of business; rapid response to these ever-changing and demanding external forces that a business is exposed to calls for a suitable response from the business at the shortest possible time. All the businesses flourishing today in the U.A.E market and around the globe have established and redesigned their response systems to offer a prompt and desirable response to their respective external environments. 

Improved Performance

Environment change result in performance improvement of an intelligent business. Smart, efficient, and lean internal environment smartly and effectively respond to external environmental factors.

B.S Auditing, during its operations, has observed that whatever is the like, favorable or unfavorable, internal environment of smart and intelligent bushiness have managed to yield positive results either in the form of positive financial results if the environments have been or just surviving the odds in case environments had hit the businesses hard.

Conclusion

If the business has made the best out of its positive environments, the books will speak for themselves, depicting healthy profits. In contrast, if the environments were unfavorable, business intelligence and competence are depicted by its books in the form of heavy losses if the business is “dull” and “break evens” if an intelligent is on the table.

The accountants and auditors at BS Auditing are well aware of the business environment’s effects on the overall performance. Our expert team members can help you in all business operations and planning perspectives.

 Feel free to contact us:

• Office # 0641, Tamani Arts Offices, Business Bay, P.O. Box 111390, Dubai, UAE

• +971 4 570 7357

• +971 58 108 5690

• info@bsauditing.com

Leave a Reply

Your email address will not be published. Required fields are marked *