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Which is the correct medium level analysis of legal environment?

Answer and explanation

Correct answer: Laws not only give penalties but also affect cost opportunity and strategy

Direct answer: Option A is correct. The legal environment means the laws, rules and legal decisions that influence business. Its effect is much wider than punishment. Step by step: a law may require a company to use safe materials; meeting that rule can increase cost. The same rule may create an opportunity for certification or safer products. Managers must therefore consider legal duties while choosing products, prices, contracts, workers and business strategy. Option A is correct because it includes penalties, costs, opportunities and strategy. Option B is wrong because every business must follow relevant laws. Option C is wrong because laws do not change weather; weather belongs to the natural environment. Option D is wrong because laws do not merely decide customer names. Memory cue: legal environment means ‘rules, risks, costs and opportunities’.

Related tags

Business-EnvironmentLegal-EnvironmentClass-12Medium

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