CSEET · Economic and Business Environment · Business Environment
Which of the following best describes the 'business environment' of a firm?
Business environment is the total of all internal and external forces, factors and institutions that influence a business's working and performance. It is broader than assets, legal rules or profit alone, which are only parts of it or outcomes of it.
- AOnly the machinery and buildings owned by the firm
- BThe sum total of all external and internal forces, factors and institutions that affect the functioning of a businessCorrect
- COnly the government rules that apply to the firm
- DThe profit earned by the firm in a year
Explanation
Business environment covers all individuals, institutions and forces, both inside and outside the firm, that influence its operations and performance. Limiting it to assets, laws or profit gives a partial view and is therefore wrong.
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