(a) Identify four environmental factors that affect business
(b) Explain how each of the factors mentioned in (a) above affects business operations
(a) Environmental factors which affect a business are:
(i) International environment
(ii) Economic Environment
(iii) cultural environment.
(viii) Political and legal.
(b)(i) Demographics environment: The size and structure of the population determine what to produce and the quantity to be produced.
(ii) Infrastructural environment: For the objectives of a business to be achieved, there must be infrastructural facilities like seaports, roads, railways, electricity etc.
(iii) Economic environment: This includes income distribution, expenditure patterns and saving capacity. The type of economic system adopted whether capitalism, socialism and mixed economy will have a significant influence on the firm.
(iv) Technological environment: This makes installed machinery and equipment obsolete, hence businesses adjust to changes in technology.
(v) Political environment: Government policies and actions determine business practices and investment climates in an economy.
(vi) Ecological environment: Physical and climatic changes such as erosion, pollution, desert encroachment etc., affect business organisations.