CSEET · Economic and Business Environment · Business Environment
A manufacturer in Pune finds that a new government notification has banned a chemical it uses as raw material. Under the classification of the macro environment, this change is best described as part of which environment?
A government ban on a raw material is a legal and regulatory action, so it belongs to the political-legal environment. This environment covers laws, rules, and policy decisions of the government that businesses must comply with, unlike economic, social or technological factors.
- AEconomic environment
- BSocio-cultural environment
- CPolitical-legal environmentCorrect
- DTechnological environment
Explanation
A government ban or notification is a regulatory action, which falls under the political-legal environment comprising laws, regulations and government policies. It is not mainly an economic variable such as income or inflation, nor a change in social values or technology.
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