CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
A company studies how changes in government policy, election outcomes and political stability may affect its investment plans. Which component of the business environment is the company analysing?
The company is analysing the political environment. Government policies, election results and political stability shape business decisions such as investment, taxation and regulation. Technological, natural and socio-cultural factors concern innovation, physical resources and social values, so they do not describe this analysis.
- ATechnological environment
- BPolitical environmentCorrect
- CNatural environment
- DSocio-cultural environment
Explanation
Government policy, elections and political stability are the core elements of the political environment. Technological, natural and socio-cultural environments deal with innovation, resources and society's values respectively, so they do not fit this case.
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