The dimensions of, or the factors constituting, the business environment are:
A. Personal environment
B. Economic environment
C. Social environment
D. Legal environment
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (B), (C) and (D) only
The general business environment has five dimensions: economic, social, technological, political and legal. These are forces outside the firm that affect every business at the same time.
(A) Personal environment — Incorrect. This is not one of the five dimensions. The business environment is made of forces outside the firm, not a person’s own affairs.
(B) Economic environment — Correct. It covers interest rates, inflation rates, changes in the disposable income of people, stock market indices and the value of the rupee.
(C) Social environment — Correct. It covers social forces such as customs and traditions, values, social trends and what society expects from business.
(D) Legal environment — Correct. It covers the laws passed by the government, administrative orders, court judgements and the decisions of commissions and agencies.
NCERT (2026-27 Edition): “Dimensions of Business Environment Dimensions of, or the factors constituting the business environment include economic, social, technological, political and legal conditions which are considered relevant for decision-making and improving the performance of an enterprise. In contrast to the specific environment, these factors explain the general environment which mostly influences many enterprises at the same time. However, management of every enterprise can benefit from being aware of these dimensions instead of being disinterested in them. …” |