The sum total of all individuals, institutions and other forces that are outside the control of a business firm, but that may affect its performance is known as:

Business Environment

The correct answer is option 2- Business Environment.

The sum total of all individuals, institutions and other forces that are outside the control of a business firm, but that may affect its performance is known as Business Environment.

The term business environment means the totality of all individuals, institutions and other forces that are outside a business but that potentially affect its performance. Business environment includes both specific and general forces. Specific forces (such as investors, customers, competitors and suppliers) affect individual enterprises directly and immediately in their day-to-day working. General forces (such as social, political, legal and technological conditions) have impact on all business enterprises and thus may affect an individual firm only indirectly.

OTHER OPTIONS

• Business Management involves planning, organizing, leading, and controlling within the firm.
• Business Decision Making: The process of making choices within the business.
• Entrepreneurship Development: Focuses on enhancing entrepreneurial skills and mindset.