Match the dimensions of business environment in List-I with the examples in List-II.
| List-I | List-II |
|---|---|
| (A) Technological environment | (I) Consumers spend more on homes and cars bought on borrowed money |
| (B) Social environment | (II) Retailers have direct links with suppliers who replenish stocks when needed |
| (C) Economic environment | (III) Business people gain confidence to invest in long-term projects |
| (D) Political environment | (IV) Urban dwellers create a demand for organic food, gyms and food supplements |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A)-(II), (B)-(IV), (C)-(I), (D)-(III)
| List-I | List-II | Reason |
|---|---|---|
| (A) Technological environment | (II) Retailers have direct links with suppliers who replenish stocks when needed | Computer links between shops and suppliers are a new method of operating that technology has made possible. |
| (B) Social environment | (IV) Urban dwellers create a demand for organic food, gyms and food supplements | The health-and-fitness trend is a social trend, and it creates demand for such products. |
| (C) Economic environment | (I) Consumers spend more on homes and cars bought on borrowed money | Low long-term interest rates make borrowing cheaper, so people buy more homes and cars. Interest rates are an economic factor. |
| (D) Political environment | (III) Business people gain confidence to invest in long-term projects | Political stability makes business predictable, so business people invest in long-term projects. |
NCERT (2026-27 Edition): “(i) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise. Short and long term interest rates significantly affect the demand for product and services. For example, in case of construction companies and automobile manufacturers, low longer-term rates are beneficial because they result in increased spending by consumers for buying homes and cars on borrowed money. …” “(ii) Social Environment: … Social trends present various opportunities and threats to business enterprises. For example, the health-and-fitness trend has become popular among large number of urban dwellers. This has created a demand for products like organic food, gyms, bottled (mineral) water and food supplements.” “(iii) Technological Environment: 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. For example, recent technological, advances in computers and electronics have modified the ways in which companies advertise their products. It is common now to see computerised information kiosks, and World Wide Web multimedia pages highlighting the virtues of products. Similarly, retailers have direct links with suppliers who replenish stocks when needed. …” “(iv) Political Environment: Political environment includes political conditions such as general stability and peace in the country 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. …” |