Assertion: Proper understanding of the various elements of the external environment is neccessary for the purpose of improvement in the performance of the firm.
Reasoning:Proper understanding of the various elements of the external environmen helps to take timely action to deal with threats and avail opportunities.
Reasoning:Proper understanding of the various elements of the external environmen helps to take timely action to deal with threats and avail opportunities.
Answer & explanation
Correct answer: option 1
Proper understanding of the various elements of the external environment is necessary to take timely action to deal with threats and avail opportunities for the purpose of improvement in the performance of the firm.
If a company is sensitive to the external environment, it will come out with new products and services to meet the requirements of the customers. This would build the image or reputation of the firm in the eyes of the general public. For example, call–radio taxis with additional features like GPS systems, online booking etc.