Which of the followings are correct about business environment?

A. Business environment is the sum total of all things external to business firm
B. Business environment is the sum total of all things internal to business firm
C. Customers and suppliers are general forces of business environment
D. Customers and suppliers are specific forces of business environment
E. Different parts of business environment are inter-related

Choose the correct answer from the options given below.

A, D and E only

The correct answer is Option (4) - A, D and E only

A. Business environment is the sum total of all things external to business firm- This is correct. Business environment is the sum total of all things external to business firms and, as such, is aggregative in nature. 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.

B. Business environment is the sum total of all things internal to business firm- This is incorrect. Business environment is the sum total of all things external to business firms and, as such, is aggregative in nature.

C. Customers and suppliers are general forces of business environment- This is incorrect. 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.

D. Customers and suppliers are specific forces of business environment- This is correct. 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.

E. Different parts of business environment are inter-related- This is correct. Different elements or parts of business environment are closely interelated. For example, increased life expectancy of people and increased awareness for health care have increased the demand for many health products and services like soft drinks, fat-free cooking oil, and health resorts. New health products and services have, in turn, changed people’s life styles.