Mention and explain any four environments under which a business operates.
Explanation
Environments under which a business operates are:
(i) Technological environment: Technological changes make previous material obsolete, hence businesses adjust to changes in technology.
(ii) Legal environment: The business has to operate bearing in mind that the legal provisions such as decrees, rules and regulations that affect its operations are to be obeyed.
(iii) Social environment: Changes in the social environment affect consumers’ attitudes and lifestyle which invariably affect their purchasing and consumption habit.
(iv) Physical/Climatic environment: Changes such as desert encroachment, drought, erosion, river pollution and depletion have effects on business organisations.
(v) Cultural environment: Culture has a bearing on consumption patterns. The type of goods to purchase and the values held by consumers are determined by culture. Some do not take alcohol while others do.
(vi) Political environment: Government policies determine business practices and investment climates in an economy. The priority of the political party in power would definitely affect business operations negatively or positively.