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Business Environment — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesBusiness Environment4 Marks
Question
‘Accent Electronics Ltd.’ was operating its business in Malaysia. The company started exporting its products to India when the Prime Minister announced relaxation in import duties on electronic items. The company appointed retailers in India who had direct on-line links with the suppliers to replenish stocks when needed.
Identify and explain the dimensions of business environment discussed in the above case.
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Answer

Dimensions of, or the factors constituting the business environment include economic, social technological, political and legal conditions which are considered relevant for decision-making and improving the performance of an enterprise .The dimensions explained in the above case are as follows:
  1. Political Environment: Political environment includes political conditions such as general stability and peace in the counn try and specific attitudes that elected government representatives hold towards business. The significance of political conditions in business success lies in the predictability of business activities under stable political conditions. On the other hand, there may be uncertainty of business activities due to political unrest and threats to law and order. Political stability, thus, builds up confidence among business people to invest in the long term projects for the growth of the economy.
  2. Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.

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