Question

The top management of a smartphone manufacturing company recently observed that the government has ordered new safety standards for batteries used in smartphones to prevent overheating. It also noticed that the government announced a reduction in import duties on components used in mobile phones. The dimensions of business environment highlighted in the above case are:

• A. Technological and legal environments
• B. Political and technological environments
• C. Legal and social environments
• D. Political and legal environments

Hint:

Remember: Government orders or court rulings belong to the "Legal" environment, whereas government policy decisions and trade announcements belong to the "Political" environment.

Answer 1

The Correct Option is D

Step 1: Understand the question.
We need to identify which two dimensions of the business environment are reflected in the two government actions described.
Step 2: Recall the dimensions of business environment.
The business environment has five key dimensions: Economic, Social, Technological, Political, and Legal. Each reflects a different type of external force acting on a firm.
Step 3: Analyse the first government action.
The government ordered new safety standards for batteries used in smartphones. Safety standards are rules or laws that businesses must comply with. Whenever the government passes a law or regulation that companies must obey, it belongs to the legal environment.
Step 4: Analyse the second government action.
The government announced a reduction in import duties on mobile phone components. Import duty decisions are policy choices made by the ruling government based on its priorities for an industry. Such policy decisions and governmental attitudes toward trade reflect the political environment.
Step 5: Match the two actions to their dimensions.
First action (safety standards) = Legal environment. Second action (reduction in import duties) = Political environment. Together, these two form the Political and Legal environments.
Step 6: Check the options and select the correct one.
Option (A) says Technological and Legal, which is wrong because no new technology is mentioned. Option (B) says Political and Technological, which is wrong. Option (C) says Legal and Social, which is wrong. Option (D) correctly states Political and Legal environments, which perfectly matches our analysis.
\[ \boxed{ \text{(D) Political and legal environments} } \]