CSEET · Economic and Business Environment · Business Environment
Which of the following is classified as an internal environmental factor of a business firm?
The firm's mission statement and organisational culture is an internal environmental factor, because it originates within the organisation and can be shaped by management. Interest rate changes, new legislation and consumer taste shifts come from outside the firm and belong to the external environment.
- AChanges in the repo rate announced by the central bank
- BThe firm's mission statement and organisational cultureCorrect
- CA new competition law passed by Parliament
- DA shift in consumer tastes across the country
Explanation
Internal factors are within the firm's control, such as its mission, values, culture, human resources and management structure. Repo rate changes, new laws and shifts in consumer tastes arise outside the firm and form the external environment.
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