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What type of influence is legal environment on business?

Answer and explanation

Correct answer: External influence

The direct answer is A: external influence. The legal environment consists of laws, rules, regulations, court decisions, and government requirements that a business must follow. These rules are created outside the individual business, although they directly affect its decisions, costs, operations, products, and responsibilities. Therefore, legal environment is part of the external business environment. Option A is correct. Option B is wrong because internal influence comes from inside the organisation, such as employees, managers, structure, or company resources. Option C is wrong because legal rules do not affect only one person; they generally apply to businesses, consumers, industries, or the public. Option D is wrong because natural influence relates to climate, land, water, disasters, and other physical conditions, not laws. A useful distinction is: the business may respond internally, but the law itself is an external force. Exam cue: laws and regulations are standard examples of the external business environment.

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Business-EnvironmentLegal-EnvironmentClass-12Easy

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