Business Environment Test - 2

Social environment refers to all the characteristics of society in which business operates. It includes the customs and traditions of the society, standard of living, taste, preferences etc.   The diwali increases the sale of sweets, crackers and clothes. Thus effects the business and comes under social environment.

Employees are an integral part of business.

Whereas A customer, investor, competitors etc are the specific forces which affects the business environment. 

Specific and general forces, Uncertainty, Relativity and Complexity are the main features of business environment.

Business environment 

• enables the firms to identify opportunities and getting first mover advantage
• helps to cope with rapid changes
• helps in improving performance

Social environment refers to the broad characteristics of the society in which a business enterprose operates.

composition of family comes under social environment , the other options are reference to legal environment and economic environment.

Liberation refers to removing licence, quota, permits and other restrictions and controls.  Liberalization reduces the control of govenment and encourages private participation

Change in agricultural prices does not explain impact of govt policy changes on business & industry.

• Presently more demanding customers are there because they are well informed
• Changes in industrial and licensing policy and entry of foreign firms increase competition
• Shift of firms policy of production oriented to societal markrting oriented production

Economic environment consists of Gross Domestic Product, Income level at national level and per capita level, profit earning rate, fiscal, monetary and industrial policy of govt etc.

Social environment consists of customs and traditions of society, the standard of living, taste, preferences and education level of people in the concerned society.  Thus it comes under social environment.

Political environment includes political conditions such as type of government in power, attitude of govt towards different groups of societies, policy changesetc. Thus it is an example of political environment.

Legal environment constitutes various laws and legislations passed by the parliament. Non compliance of laws can lead into legal problems. Thus this is an example of legal environment.