CSEET · Economic and Business Environment · Business Environment
In the study of business environment, which of the following is classified as an element of the internal environment of a firm rather than its external environment?
The mission and objectives set by the board of directors belong to the internal environment because they originate inside the firm and are controllable by it. Repo rate, tax rates and household income are external factors outside the firm's control.
- AChanges in the repo rate announced by the central bank
- BMission and objectives set by the board of directorsCorrect
- CA new Goods and Services Tax rate notification
- DRising disposable income of households
Explanation
Internal environment comprises factors within the firm's control such as mission, objectives, organisational structure, and human resources. Repo rate changes, tax notifications and household incomes are external forces that the firm cannot control. Hence the board's mission and objectives are the internal factor.
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