Skip to page content

Business Environment — Part 2: Dimensions and Demonetisation

Beta

Lesson

Dimensions of business environment

Part 2 — the five dimensions of the general environment, and demonetisation (2016).

In this lesson you will

Classify changes into the economic, social, technological, political and legal dimensions
Distinguish the political environment from the legal environment
Explain the concept and features of demonetisation and how it affected businesses

Part 2 at a glance

Diagram

The five dimensions

Table of the five dimensions of business environment and what each includes: economic, social, technological, political and legal
Dimension	What it includes
Economic	Interest rates, inflation, incomes, money supply, stock market, tax rates
Social	Customs, traditions, values, lifestyles, health and education levels
Technological	Scientific improvements and innovations: new ways of producing and delivering
Political	Stability of government, law and order, government's attitude to business
Legal	Acts, rules and court decisions that business must follow

Concept

Economic environment

Table of economic changes and their likely effects: falling interest rates encourage investment and credit buying, rising inflation raises costs, rising incomes raise demand
Economic change	Likely effect on business
Interest rates fall	Cheaper loans: more investment and credit buying
Inflation rises	Costs rise; buyers may cut spending
Incomes rise	Demand rises for many goods and services