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CSEET · Economic and Business Environment · Business Environment

A listed company's board decides to change its internal organisational structure and revise its HR policy to improve productivity. Simultaneously, the government announces a new labour code affecting all employers. Which pairing is correct?

The structural change and HR policy are internal factors, as the company's board decides them and controls them. The new labour code is an external factor, since the government imposes it on all employers. Classification depends on the source and controllability of a factor, not its effect.

  1. ABoth the structural change and the labour code are internal factors
  2. BStructural change is an internal factor; the labour code is an external factorCorrect
  3. CStructural change is an external factor; the labour code is an internal factor
  4. DBoth are external factors because both affect productivity

Explanation

Organisational structure and HR policy are decided by the firm, so they are internal and controllable. A labour code is imposed by the government on all employers, so it is external and uncontrollable by the firm. Option D wrongly judges by effect rather than by source.

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