Business Environment Test - 51

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.

There are generally three main objectives for business in the marketplace: competition, innovation and growth. The first two objectives are related, but competition does not necessarily yield growth.

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.

Environment scanning is the process by which organisations monitor their relevant environment to identify opportunities and threats. It finds out the influence of different factors and persons on the business.

The physical quality of life index could not be considered a major economic system.

An open economy is one where a nation that trades with the other nations in goods and services and financial assets.

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 marketing oriented production

Social environment consists of customs and traditions of the society, standard of living, taste, preference and educational levels etc. of people living in the society where business exists.

When social environment will change, it will change the demand of existing product to new one.

Globalisation refers to integrate different economies of the world.  It involves free interaction of domestic economy with rest of the world in the fields of production, trade, capital movement, exchange rates etc.

Changes in people's lifestyles, such as increased awareness for health care and higher life expectancy, lead to an increased demand for health products. This exemplifies how changes in one aspect of the environment (lifestyle) influence another (demand for health products), highlighting the inter-relatedness of various elements within the business environment.