Explain the following business environments as they affect business. (i) Legal environment (ii) Political environment (iii) Economic environment (iv) Cultural environment – NABTEB QUESTION

(i) 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.

(ii) Political environment: Government policies determine business practices and investment climate in an economy. The priority of the political party in power would definitely affect business operations positively or negatively

(iii) Economy environment: This involves income distribution, expenditure patterns, inflationary trends and saving capability of consumers. These affect business activities as consumers buy more during the era of boom, and vise versa. Companies fold up during recessions and employees are retrenched as businesses operate below capacity.

(iv) Cultural environment: This could be social or religious. Changes in cultural environment affect consumers’ attitudes and lifestyle, which invariably affect their purchasing and consumption habits.