The term 'Business Environment' includes sum total of all forces, that are :

Outside business only

The correct answer is option (2)- Outside business only.

The term 'Business Environment' includes sum total of all forces, that are outside business only.

The term business environment means the totality of all individuals, institutions and other forces that are outside a business but that potentially affect its performance. Business environment includes both specific and general forces. Specific forces (such as investors, customers, competitors and suppliers) affect individual enterprises directly and immediately in their day-to-day working. General forces (such as social, political, legal and technological conditions) have impact on all business enterprises and thus may affect an individual firm only indirectly.