Question

A recent tale cut in the interest on loans announced by the Banks encouraged Amit, a science student of Progressive School to take a loan from State Bank of India to experiment and develop can to be powered by fuel produced from garbage. He developed such a car and exhibited it in the Science Fair organised by Direct or die of Education. He was awarded first prize for his invention.
Identify and explain the dimensions of business environment discussed in the above case.

Answer 1

The dimensions of business environment which are discussed in the given case are:

1. Economic Environment

2. Technological Environment

Economic Environment: It refers to the nature of economy (capitalist, socialist or mixed),

economic policies of the government, markets for material, labour, capital, etc., business

firms and institutions such as banks, insurance companies, transport companies, etc.,

and level of income of the people.

The economic environment of a firm also includes all markets in which it buys and sells

raises funds, gets labour, etc.

Technological Environment: It refer to the state of technology in the areas of

manufacturing, mining construction materials handling, transportation, etc. and also

information technology. Advancement in technology leads to greater productivity, higher

quality and lower cost of production for the business. However, introduction of advanced

technology requires higher capital investment.