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Describe, with examples, the characteristics of a nonmarket environment.
Business and Its Environment
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The nonmarket environment of a firm is characterized by four I's:
Issues are the basic unit of analysis and the focus of nonmarket action. Using the
Agricultural biotechnology industry as an example, the central nonmarket issues have been the formulation of regulatory policies for bioengineered foods and the public reaction to those foods.
Interests include the individuals and groups with preferences about, or a stake in, the issue. The principal interests are the agricultural biotechnology companies, the interest groups and activists concerned about biotechnology issues, and the public.
Institutions are defined by Douglass North (1}  as the rules of the game in a societythat shape human interactions, and these institutions provide arenas in which interests seek to influence the outcomes on issues. Government institutions include entities such as legislatures and regulatory agencies. Nongovernmental institutions include those such as the news media that provides information to society as well as public sentiment composed of societal expectations and norms of behavior that arise from ethics and culture. The Environmental Protection Agency, the Department of Agriculture, the Food and Drug Administration, and Congress are the principal public institutions in whose arenas agricultural biotechnology issues are addressed. The public sentiment about bioengineered foods is influenced by market forces as well. As the prices of agricultural products and foods rose in the late 2000s, some consumers and firms that had shunned bioengineered foods began to change their policies in response to their lower prices resulting from higher productivity and resistance to crop damage.
Information pertains to what the interests and institutional officeholders know or believe about the issues and the forces affecting their development. In the case of agricultural biotechnology, information pertains to the risks associated with individual products and with the technology itself. The public acceptance of bioengineered crops and animals is influenced by both scientific knowledge and concerns about the unknown and can differ across countries and cultures. Information is provided by firms, activists, government institutions, and the media.
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