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Questions and Answers
Which one of the following best defines the Business Environment?
Which one of the following best defines the Business Environment?
- The factors affecting both internal and external operations of a business organization. (correct)
- The factors affecting the financial performance of a business organization.
- The factors affecting the external operations of a business organization.
- The factors affecting the internal operations of a business organization.
What does the External Business Environment include?
What does the External Business Environment include?
- Factors and elements related to competition.
- Factors and elements within the organization.
- Factors and elements affecting the financial performance.
- Factors and elements outside the organization. (correct)
What does the Internal Business Environment refer to?
What does the Internal Business Environment refer to?
- Factors and elements outside the organization.
- Factors and elements within the organization. (correct)
- Factors and elements related to competition.
- Factors and elements affecting the financial performance.
What considerations are linked with the external environment?
What considerations are linked with the external environment?
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What should a company's strategy and approach to operations be aligned with?
What should a company's strategy and approach to operations be aligned with?
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Study Notes
Definition of Business Environment
- The Business Environment refers to the internal and external factors that influence a company's operations and decision-making processes.
External Business Environment
- Includes factors outside the organization that can affect its performance, such as:
- Economic factors (e.g. inflation, recession)
- Political factors (e.g. government policies, regulations)
- Social factors (e.g. consumer behavior, culture)
- Technological factors (e.g. advancements, innovations)
- Environmental factors (e.g. climate change, natural resources)
Internal Business Environment
- Refers to the factors within the organization that can affect its operations and decision-making, such as:
- Company culture and values
- Management structure and leadership
- Employee skills and competencies
- Financial resources and management
- Physical assets and infrastructure
External Environment Considerations
- Linked to the external environment are considerations such as:
- Market trends and competitor analysis
- Customer needs and expectations
- Government policies and regulations
- Social responsibility and ethics
- Economic and environmental sustainability
Alignment of Strategy and Operations
- A company's strategy and approach to operations should be aligned with the external environment, taking into account:
- Market opportunities and threats
- Customer needs and expectations
- Environmental and social responsibilities
- Economic and technological trends
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