I85PREP
⌘ K
WBCHSE HS Business Studies study materials
WBCHSE HS Business Studies study resources

WBCHSE HS Business Studies practice questions

One question at a time. Build your WBCHSE HS Business Studies understanding.

First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Nature and Significance of Management

Management is best described as a process because it

  1. requires a large number of employees working under one supervisor
  2. is performed only by the board of directors at the top level
  3. involves a series of interrelated functions carried out to achieve stated goals Correct answer.
  4. depends entirely on the personal wealth of the owner of the business

Explanation

Management is called a process because it consists of a sequence of interrelated and interdependent functions such as planning, organising, staffing, directing and controlling, performed continuously to reach organisational goals. The emphasis is on the systematic series of actions, not on the number of employees or the level at which it is performed.

Question 2Nature and Significance of Management

Which feature of management is highlighted when a manager in a shoe factory coordinates the efforts of production, marketing and finance departments towards a common target?

  1. Management is confined to profit-making units
  2. Management is a rigid set of rules
  3. Management is a personal hobby of the owner
  4. Management is a goal-oriented activity Correct answer.

Explanation

Goal orientation means that all managerial effort, across every department, is directed towards achieving the objectives of the organisation. Coordination of departmental effort towards a common target is the practical expression of this feature.

Question 3Nature and Significance of Management

The three levels of management in a large manufacturing company, arranged from the top downwards, are

  1. middle, top and supervisory management
  2. top, supervisory and middle management
  3. top, middle and supervisory (operational) management Correct answer.
  4. supervisory, middle and top management

Explanation

The conventional hierarchy runs from top management (board and chief executives), through middle management (departmental heads), to supervisory or operational management (foremen and supervisors). Each lower level reports to the level above it.

Question 4Nature and Significance of Management

A supervisor who explains a new machine-safety rule to workers and resolves their day-to-day grievances is mainly performing which function of management?

  1. Planning
  2. Staffing
  3. Directing Correct answer.
  4. Controlling

Explanation

Directing covers instructing, guiding, motivating and supervising subordinates in their daily work, including the handling of routine grievances. It is the function most closely associated with supervisory-level managers.

Question 5Nature and Significance of Management

Efficiency in management means

  1. completing the maximum number of tasks regardless of cost
  2. achieving targets without regard to the means used
  3. expanding the size of the organisation every year
  4. doing the work correctly with minimum waste of resources Correct answer.

Explanation

Efficiency is about doing things the right way, that is, completing work with the least possible use of resources and the least waste. It is judged by the relationship between inputs and outputs, not by the volume of tasks alone.

Question 6Nature and Significance of Management

Which of the following is a characteristic that distinguishes management as a profession rather than a mere occupation?

  1. Existence of a systematised body of knowledge and an ethical code of conduct Correct answer.
  2. Guarantee of a fixed salary to every manager
  3. Complete freedom from social responsibility
  4. Absence of any need for continuous learning

Explanation

A profession rests on a well-defined body of knowledge, a formal code of conduct and a service motive, and management shows these features in an emerging form. Salary guarantees and freedom from responsibility are not professional characteristics.

Question 7Nature and Significance of Management

A firm sets a target of producing 5,000 units in a month but actually produces 4,200 units. In terms of management concepts, the firm has

  1. achieved effectiveness but not efficiency
  2. achieved efficiency but not effectiveness
  3. achieved both efficiency and effectiveness
  4. failed in effectiveness, since the target was not attained Correct answer.

Explanation

Effectiveness refers to completing the intended task and attaining the target. Since the target of 5,000 units was missed, effectiveness was not achieved, whatever the resource use may have been.

Question 8Nature and Significance of Management

An organisation installs a new accounting software to cut the time taken to prepare monthly reports. The manager's decision reflects the principle of

  1. management as a science, since systematic knowledge was applied to solve a problem Correct answer.
  2. management as a ritual, since software must be changed periodically
  3. management as an art, since no prior knowledge was needed
  4. management as charity, since the change benefits employees

Explanation

Applying a systematised body of knowledge, tested principles and cause-and-effect reasoning to solve an organisational problem is the science side of management. The decision is based on established knowledge rather than intuition alone.

Question 9Nature and Significance of Management

A manager achieves targets by handling people tactfully and creatively in a unique situation. This illustrates that management is

  1. a profession, because it has a statutory licensing body
  2. an art, because it requires personal skill and practice in applying knowledge Correct answer.
  3. a charity, because it serves employees
  4. a science, because every situation can be predicted exactly

Explanation

Art refers to the skilful application of knowledge and personal creativity to particular situations. Handling people and situations with tact and originality is the artistic dimension of management.

Question 10Nature and Significance of Management

Which statement correctly describes the importance of management for an organisation?

  1. It removes the need for any planning by the owners
  2. It transfers all responsibility for results to the workers
  3. It guarantees that the enterprise will never make a loss
  4. It reduces wastage and helps the enterprise adapt to a changing environment Correct answer.

Explanation

Management matters because it coordinates resources, reduces waste, motivates people and helps the organisation adjust to changes in its environment. It improves the probability of success but cannot guarantee profit.

Question 11Nature and Significance of Management

The managerial function that establishes the framework of duties and authority relationships needed to execute plans is

  1. staffing
  2. controlling
  3. organising Correct answer.
  4. directing

Explanation

Organising identifies and groups activities, assigns duties, and defines authority and reporting relationships so that plans can be carried out. It creates the structure through which work is performed.

Question 12Nature and Significance of Management

A production manager compares actual output with the standard set in the plan and initiates corrective action when a shortfall appears. Which function is being performed?

  1. Staffing
  2. Controlling Correct answer.
  3. Organising
  4. Planning

Explanation

Controlling is the process of comparing actual performance with predetermined standards and taking corrective action to ensure that objectives are met. The comparison and correction described here are its core steps.

Question 13Nature and Significance of Management

Which of the following is a coordination-related reason why management is described as a goal-oriented process?

  1. It permits each department to pursue its own independent goals
  2. It avoids any measurement of performance
  3. It unites the efforts of individuals and groups towards predetermined objectives Correct answer.
  4. It replaces organisational objectives with personal objectives

Explanation

Management integrates individual and group effort and directs it towards predetermined organisational objectives. This unification of effort is what makes it goal-oriented.

Question 14Nature and Significance of Management

The main responsibility of middle-level management is to

  1. frame the overall objectives and policies of the enterprise
  2. supervise the daily work of individual operators directly
  3. interpret top-level plans and assign duties to supervisory staff Correct answer.
  4. perform only routine clerical work in the office

Explanation

Middle management translates the plans and policies set by top management into departmental targets and assigns work to supervisors. It acts as a link between the top and supervisory levels.

Question 15Nature and Significance of Management

Which argument best supports the view that management is not yet a fully developed profession in the way medicine is?

  1. Entry to managerial posts is not restricted to holders of a prescribed degree or licence Correct answer.
  2. Managers are never accountable to anyone for results
  3. Managers do not need any knowledge of human behaviour
  4. Management has no code of conduct of any kind

Explanation

A fully developed profession restricts entry to those with a prescribed qualification and licence. In management, anyone with the required experience may be appointed, and no statutory body controls entry.

Question 16Nature and Significance of Management

A hospital administrator uses managerial principles to allocate beds, staff and equipment among departments. This shows that management is

  1. restricted to profit-making enterprises
  2. restricted to manufacturing firms
  3. restricted to the top level of an organisation
  4. pervasive, since it applies to all types of organisations and at all levels Correct answer.

Explanation

Pervasiveness means management is universal: it applies in business and non-business organisations and at every level, wherever group effort towards a goal exists. A hospital is a clear non-business illustration.

Question 17Nature and Significance of Management

A manager follows established principles of division of work but adapts their application to the particular culture of the workforce. This best illustrates that management is

  1. neither a science nor an art, since it is only experience
  2. both a science and an art, since knowledge is applied with personal skill to a specific situation Correct answer.
  3. purely an art, since no principles are used
  4. purely a science, since principles are followed

Explanation

Management combines science and art: systematised principles provide the knowledge base, while their adaptation to a particular workforce and situation requires personal skill and judgement. The two dimensions operate together.

Question 18Nature and Significance of Management

Two firms produce the same quantity of output, but firm A uses fewer raw materials and less labour time than firm B. Which conclusion is most defensible?

  1. Firm B is more efficient because it uses more resources
  2. Firm A is more efficient, though effectiveness cannot be judged from the data given Correct answer.
  3. Both firms are equally efficient because output is the same
  4. Firm A is more effective but less efficient than firm B

Explanation

Efficiency is judged by the input-output relationship: with the same output, fewer inputs mean greater efficiency. Effectiveness concerns whether the intended target was achieved, and the data say nothing about targets, so it cannot be assessed.

Question 19Nature and Significance of Management

Which sequence correctly reflects the interrelated nature of the management functions?

  1. Directing, staffing, controlling, planning and organising, in that fixed order
  2. Planning, organising, staffing, directing and controlling, with control feeding back into planning Correct answer.
  3. Controlling, planning, directing, staffing and organising, with no feedback
  4. Staffing, controlling, planning, organising and directing, in that fixed order

Explanation

The functions form a logical sequence beginning with planning and ending with control, and control results feed back into revised planning. This interdependence, rather than a rigid one-way order, defines management as a process.

Question 20Nature and Significance of Management

A company appoints a qualified manager who holds a recognised management degree and follows the profession's code of conduct. This best supports the argument that management is

  1. a charitable activity, since codes of conduct serve society
  2. emerging as a profession, since formal qualifications and ethical codes are being adopted Correct answer.
  3. a pure science, since a degree proves scientific certainty
  4. an art, since qualifications are irrelevant to practice

Explanation

The growth of formal management education and the adoption of codes of conduct show that management is developing professional features, though entry is still not legally restricted. This is why it is described as an emerging profession.

Question 21Principles of Management

Frederick W. Taylor's principle of 'scientific selection of workers' in management mainly stresses which of the following?

  1. Selecting only those workers who accept the management's wage rates without negotiation
  2. Selecting supervisors on the basis of seniority rather than technical competence
  3. Selecting machines and tools before deciding which workers will operate them
  4. Selecting workers scientifically by matching each person's physical and mental qualities to the task Correct answer.

Explanation

Taylor held that each job should be studied and workers chosen so that their abilities fit the requirements of the task, replacing arbitrary hiring. This scientific selection, combined with training, was meant to raise efficiency and reduce wasted effort. It is a distinct principle from his ideas on standardisation and differential piece rates.

Question 22Principles of Management

In Henri Fayol's classification of managerial activities, which function involves dividing work into tasks, grouping them and assigning authority?

  1. Controlling
  2. Coordinating
  3. Commanding
  4. Organising Correct answer.

Explanation

Fayol identified organising as the function of building the structure of the enterprise: dividing work, grouping activities, and establishing authority and responsibility relationships. Controlling checks performance against plans, while commanding directs subordinates and coordinating unifies effort. Organising is therefore the structural function.

Question 23Principles of Management

A manager tells a subordinate, 'Do not accept any order from the accounts department regarding payment vouchers; report only to me.' This instruction best illustrates which principle of management?

  1. Scalar chain
  2. Unity of command Correct answer.
  3. Esprit de corps
  4. Unity of direction

Explanation

Unity of command states that an employee should receive orders from only one superior, so that responsibility is fixed and confusion avoided. The manager here is preventing a second boss from issuing orders to the same subordinate. Unity of direction, by contrast, concerns one head and one plan for activities with the same objective.

Question 24Principles of Management

According to Fayol, which principle suggests that a worker should receive a fair remuneration that satisfies both the employee and the organisation?

  1. Subordination of individual interest
  2. Stability of tenure
  3. Equity
  4. Remuneration of employees Correct answer.

Explanation

Fayol's principle of remuneration of employees holds that pay should be fair to both the workers and the firm, providing reasonable living standards while keeping the organisation viable. Equity concerns kind and just treatment, and stability of tenure concerns keeping personnel in place. Fair pay is therefore the specific principle involved.

Question 25Principles of Management

Under Taylor's differential piece-rate system, a worker whose output falls below the standard is paid at a rate that is:

  1. Fixed at the ordinary day wage regardless of output
  2. Equal to the rate paid to workers who meet the standard
  3. Lower than the rate paid to workers who meet the standard Correct answer.
  4. Higher than the rate paid to workers who meet the standard

Explanation

Taylor's differential piece-rate system offered a high rate per piece for output at or above standard and a distinctly lower rate for output below standard. The gap was intended to motivate workers to reach the standard output. It is thus a penalty-and-incentive scheme rather than a flat day wage.

Question 26Principles of Management

Fayol's principle of 'centralisation' is best described as:

  1. Physical concentration of all employees in a single office building
  2. Complete decentralisation of all decisions to the lowest level of the organisation
  3. Central control of the organisation's cash and bank accounts
  4. Concentration of decision-making authority at the top, with the desirable degree varying by situation Correct answer.

Explanation

Centralisation refers to how far decision-making authority is concentrated at higher levels of the hierarchy. Fayol treated it as a matter of proportion, noting that the appropriate degree depends on the size of the concern and the quality of subordinates. It is an authority-distribution concept, not a physical or financial one.

Question 27Principles of Management

Which statement correctly pairs a feature of management with its meaning?

  1. Management is goal-oriented because every organisation pursues objectives and management directs effort towards them Correct answer.
  2. Management is intangible because its results are visible only in the form of orders issued
  3. Management is a group activity because only the managing director performs managerial work
  4. Management is a continuous process because it stops once the annual plan is prepared

Explanation

Goal-orientedness means that management exists to achieve the objectives of the enterprise, so all managerial effort is directed to defined goals. Management is also intangible, continuous and a group activity, but the paired meanings in the other options distort these features. The correct pairing links the feature to its accepted meaning.

Question 28Principles of Management

'Management is a profession' is a statement that is best qualified by noting that:

  1. Management requires no specialised knowledge and depends only on experience
  2. Management is a profession because managers must complete a compulsory internship before practice
  3. Management has a statutory licensing body that every manager must join
  4. Management has a body of knowledge and a service motive but entry is not restricted by law Correct answer.

Explanation

Management has a systematised body of knowledge, associations and a service motive, yet there is no legal restriction on becoming a manager and no single compulsory code enforced by statute. It is therefore often described as a profession in a limited or emerging sense. The absence of statutory licensing is the key qualification.

Question 29Principles of Management

A firm's production manager and marketing manager disagree about whether to launch a new product, and the issue reaches the chief executive, who decides. This is an example of:

  1. Span of control being widened
  2. Decentralisation of authority
  3. Delegation of responsibility without authority
  4. Resolution of conflict through the chain of command Correct answer.

Explanation

When a dispute between two managers is escalated upward and settled by a higher authority, the hierarchy or chain of command is being used to resolve conflict. Fayol noted that such differences are best settled by superiors who have the authority to decide. The situation does not by itself decentralise authority or alter spans of control.

Question 30Principles of Management

Which of the following is a technique of scientific management associated with Frank and Lillian Gilbreth rather than with Taylor?

  1. Functional foremanship
  2. Standardisation of tools and materials
  3. Motion study to eliminate unnecessary movements in a task Correct answer.
  4. Differential piece-rate wage payment

Explanation

Motion study, breaking a task into elementary movements and removing wasteful ones, is associated with the Gilbreths, who also developed the concept of the 'therblig'. Taylor's contributions include the differential piece rate, functional foremanship and standardisation. The Gilbreths' work complements but is distinct from Taylor's.

Question 31Principles of Management

In Taylor's functional foremanship, the 'route clerk' and the 'instruction card clerk' belong to which group of bosses?

  1. The gang bosses who supervise groups of workers
  2. The planning side of the workshop Correct answer.
  3. The inspection staff who check finished output
  4. The speed bosses who set the pace of machines

Explanation

Taylor divided the workshop into planning and production sides, each with four specialist bosses. The route clerk, instruction card clerk, time and cost clerk and disciplinarian sit on the planning side. The speed boss, gang boss, repair boss and inspector belong to the production side.

Question 32Principles of Management

Which of Fayol's principles is most directly violated when a subordinate is held responsible for a task but is given no authority to use the resources needed for it?

  1. Authority and responsibility Correct answer.
  2. Initiative
  3. Scalar chain
  4. Order

Explanation

Fayol insisted that authority and responsibility go together: whoever is made responsible for work must be given the authority to carry it out. Holding someone accountable without matching authority creates an unfair position and weakens accountability. The other principles deal with order, initiative and the line of communication.

Question 33Principles of Management

Which of the following best explains why management is regarded as both a science and an art?

  1. It is neither a science nor an art because it cannot be taught or practised
  2. It uses systematic knowledge and principles, yet their application requires skill and judgement in particular situations Correct answer.
  3. It is an art because it depends entirely on intuition and has no organised body of knowledge
  4. It is a science because it has laws passed by the legislature and an art because it uses colour and design

Explanation

Management qualifies as a science because it has an organised body of principles developed through observation and experiment. It is an art because these principles must be applied with skill, creativity and judgement to specific people and situations. The two are complementary rather than exclusive.

Question 34Principles of Management

Fayol's principle of 'subordination of individual interest to general interest' requires that:

  1. Trade union interests should determine the organisation's objectives
  2. The interests of the organisation as a whole prevail over the interests of any individual or group Correct answer.
  3. The interests of the senior-most manager prevail over all other considerations
  4. Individual employees' personal goals should replace organisational goals

Explanation

The principle holds that the general interest of the enterprise must take precedence over the personal or sectional interests of individuals and groups within it. This requires managers to reconcile conflicting interests and set an example. It does not mean that any single powerful person's wishes override everything else.

Question 35Principles of Management

A company increases the number of subordinates reporting to each supervisor from six to fifteen without providing additional support. Which consequence is most consistent with principles of management?

  1. Unity of command is strengthened because fewer supervisors are needed
  2. The organisation becomes more decentralised because supervisors have more people under them
  3. The scalar chain shortens automatically, improving communication
  4. The supervisor's span of control widens, making close supervision and coordination more difficult Correct answer.

Explanation

Span of control refers to the number of subordinates a superior can effectively supervise. Widening it without support tends to overload the supervisor and strain coordination and control. The change does not by itself shorten the chain of command, strengthen unity of command, or decentralise authority.

Question 36Principles of Management

Which criticism of Taylor's scientific management is most widely accepted?

  1. It placed excessive emphasis on worker participation in setting production standards
  2. It ignored the human and psychological aspects of workers and treated them mainly as parts of a machine Correct answer.
  3. It opposed the separation of planning from execution in the workshop
  4. It rejected the use of time study and standardisation of work methods

Explanation

A standard criticism is that scientific management concentrated on efficiency and technical method while neglecting the social and psychological needs of workers, encouraging a mechanistic view of labour. It also separated planning from execution and relied on close supervision. The other options describe the opposite of Taylor's actual approach.

Question 37Principles of Management

The principle of 'esprit de corps' in Fayol's list is best promoted by which managerial action?

  1. Issuing separate and conflicting instructions to different teams
  2. Rotating managers so frequently that teams never form
  3. Encouraging open communication and team harmony so that staff pull together Correct answer.
  4. Using divide-and-rule tactics to prevent employees from combining

Explanation

Esprit de corps means union is strength: managers should foster team spirit, harmony and a sense of common purpose among employees. Open communication and cooperation build this unity. Tactics that divide staff or create confusion work against the principle.

Question 38Principles of Management

Which statement about the levels of management is correct?

  1. Supervisory management is mainly concerned with translating top-level plans into day-to-day operations and supervising workers Correct answer.
  2. Supervisory management determines the organisation's long-term strategy and policies
  3. Middle management is responsible only for setting the organisation's overall objectives
  4. Top management spends most of its time on routine shop-floor supervision

Explanation

Supervisory or operational management works at the point of production, overseeing workers and converting plans into daily tasks. Top management sets overall objectives and strategy, while middle management links the two levels. Assigning strategy to supervisors or shop-floor duties to top management reverses the levels.

Question 39Principles of Management

A manager applies Fayol's principles flexibly, adjusting them to the size, technology and culture of the firm instead of treating them as fixed rules. This reflects which characteristic of management principles?

  1. They are statutory rules enforceable in a court of law
  2. They are contingent or situational in application Correct answer.
  3. They are based on the personal whims of each manager
  4. They are rigid and must be applied identically in every situation

Explanation

Management principles are guides to action rather than absolute rules; their application depends on the situation, so they are described as contingent. Managers must judge which principle and what degree of it suits the case. They are not statutes and are not matters of personal whim.

Question 40Principles of Management

Which of the following correctly distinguishes 'unity of direction' from 'unity of command'?

  1. Both terms refer only to the physical arrangement of the workplace
  2. Unity of direction concerns one head and one plan for a group of activities with the same objective, while unity of command concerns one superior for each employee Correct answer.
  3. Unity of direction concerns one superior for each employee, while unity of command concerns one plan for a group of activities
  4. Both terms mean that an employee may report to several superiors at once

Explanation

Unity of direction is about having one head and one plan for a set of activities that share a common objective, so that effort is not duplicated. Unity of command is about an individual employee receiving orders from only one superior. The two concepts are related but address different aspects of organisation.

Question 41Business Environment

Which component of the business environment includes inflation, interest rates and the money supply?

  1. Technological environment
  2. Social environment
  3. Legal environment
  4. Economic environment Correct answer.

Explanation

The economic environment covers macroeconomic forces such as inflation, interest rates, credit availability and national income that shape costs and demand for a firm. These monetary and price variables directly influence purchasing power and the cost of capital.

Question 42Business Environment

A company studies the customs, values and buying habits of families in a region before launching a product. Which dimension of the business environment is it examining?

  1. Social environment Correct answer.
  2. Political environment
  3. Legal environment
  4. Natural environment

Explanation

The social environment comprises customs, traditions, values, family structure and lifestyle patterns that determine what consumers consider acceptable and desirable. Studying buying habits and family customs is therefore a study of social forces.

Question 43Business Environment

Which feature best describes the business environment as a whole?

  1. It affects only large companies
  2. It is dynamic and keeps changing continuously Correct answer.
  3. It is static and changes only rarely
  4. It is fully controllable by management

Explanation

The business environment is dynamic because technology, consumer tastes, laws and economic conditions change constantly, so a firm must keep adapting. It is also largely beyond the control of any single enterprise.

Question 44Business Environment

A firm's managers forecast demand using past sales data and internal reports. This activity belongs to which area?

  1. Natural environment analysis
  2. Internal environment analysis Correct answer.
  3. Legal environment analysis
  4. External environment analysis

Explanation

Internal environment analysis uses information generated within the firm, such as sales records, production reports and employee capabilities. Past sales data and internal reports are internal sources, so they belong to internal analysis.

Question 45Business Environment

Which of the following is an element of the micro environment of a business?

  1. Customers of the firm Correct answer.
  2. The rate of inflation in the country
  3. The national government's fiscal policy
  4. Technological change in the industry

Explanation

The micro environment consists of actors closely linked to the firm and directly affecting its operations, such as customers, suppliers, competitors and intermediaries. Customers are such an immediate actor, whereas inflation and fiscal policy are broad macro forces.

Question 46Business Environment

A state government announces a subsidy for firms setting up units in a backward district. Which part of the business environment does this represent?

  1. Political and legal environment Correct answer.
  2. Natural environment
  3. Technological environment
  4. Social environment

Explanation

Government policy decisions such as subsidies and incentives flow from the political environment and are given effect through legal and administrative measures. A subsidy announcement is therefore a political-legal environmental factor.

Question 47Business Environment

Why does understanding the business environment help a firm identify opportunities and threats?

  1. It ensures government will grant all licences
  2. It removes the need for planning and forecasting
  3. It gives early signals about changes that can be turned into advantage or guarded against Correct answer.
  4. It guarantees that competitors will not enter the market

Explanation

Environmental scanning provides early warning of changes such as new technology, shifting tastes or new regulation, letting a firm exploit favourable openings and prepare for adverse ones. It informs strategy but does not guarantee outcomes.

Question 48Business Environment

A firm studies the number of competitors, their pricing and their product range before entering a market. This is an analysis of which element?

  1. Publics
  2. Suppliers
  3. Competitors Correct answer.
  4. Intermediaries

Explanation

Competitors are firms offering similar goods or services, and their number, pricing and product range define competitive rivalry in the micro environment. Examining these factors is competitor analysis.

Question 49Business Environment

Which of the following best explains why the business environment is described as uncertain?

  1. Environmental forces interact and change in ways that cannot be predicted with certainty Correct answer.
  2. Consumers never change their preferences
  3. Firms have complete information about future events
  4. Government always informs firms of future policy

Explanation

Environmental forces such as technology, politics and consumer taste interact and evolve unpredictably, so managers cannot forecast future conditions with full confidence. This unpredictability is what makes the environment uncertain.

Question 50Business Environment

A firm installs automated machinery to cut production time. Which aspect of the environment is it responding to?

  1. Legal environment
  2. Social environment
  3. Economic environment
  4. Technological environment Correct answer.

Explanation

The technological environment includes advances in machinery, automation and production methods that firms adopt to improve efficiency. Installing automated machinery is a response to technological change.