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Questions and Answers
Which of the following is an element of the internal business environment?
Which of the following is an element of the internal business environment?
- Global market trends
- Technological innovations
- Corporate culture (correct)
- Customers' preferences
What is considered as part of the micro environment of a business?
What is considered as part of the micro environment of a business?
- Economic factors
- Technological innovations
- Intermediaries (correct)
- Globalization
The macro environment of a business includes broad forces affecting only one specific business sector.
The macro environment of a business includes broad forces affecting only one specific business sector.
False (B)
Mention one aspect of the external business environment related to sociocultural factors.
Mention one aspect of the external business environment related to sociocultural factors.
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Study Notes
Business Environment
- The business environment consists of internal and external factors that influence a business's operations and performance.
Internal Environment
- Employees: skills, attitudes, and productivity
- Management: leadership, strategic vision, and decision-making
- Corporate Culture: values, beliefs, and behaviors
- Physical Resources: facilities, equipment, and technology
- Impact: directly controllable by the business, influences operational efficiency and morale
External Environment
Micro Environment
- Factors directly affecting the business
- Customers: needs, preferences, and feedback
- Suppliers: quality, pricing, and reliability
- Competitors: market position, strategies, and performance
- Intermediaries: distributors, agents, and brokers
- Public: media, pressure groups, and local communities
Macro Environment
- Broad forces affecting all businesses
- Economic Factors: inflation, interest rates, and economic cycles
- Technological Factors: innovations, automation, and R&D
- Political and Legal Factors: regulations, policies, and political stability
- Sociocultural Factors: demographics, lifestyle changes, and cultural trends
- Environmental Factors: climate change, sustainability, and resource scarcity
- Global Factors: globalization, international trade policies, and global market trends
Importance of Business Environment
- Understanding business structure and its environment is crucial for strategic planning, risk management, and long-term success
- Businesses must continuously analyze and adapt to their internal and external environments to thrive in a dynamic market
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