UGC NET COMMERCE November 2017(Paper-II) Q5 Multiple Choice Questions

Option : A
Explanation : Classification of External Environment: The external environment can be further classified into two categories: micro environment and macro environment.
Micro Environment: The micro environment consists of different types of stakeholders outside the organisation. The constitutions or stakeholders of the micro environment include customers, suppliers, creditors, distributors, dealers, etc. Although these constituents are not under the direct control of the organisation, still they can be influenced by the organisation through its policies and strategies. Any change in the micro environment affects and impinges on the organisations activities directly. That is why it is also termed as Specific (Task) Environment.
Macro Environment: The macro environment consists of constituents that are beyond the control of a business organisation. These constituents are socio-cultural, technological, economical and political (STEP) factors which constitute their own individual environments. The effect of changes in the macro environment on the business is indirect. Therefore, it is also termed as General (Societal) Environment. An example of a change in the macro environment is the passing of a legislation, which bans smoking in public places. This legislation indirectly affects the business of pubs and restaurants.
Constituents of Macro Environment: The main constituents of the macro environment are: global business environment, socio-cultural environment, technological environment, economic environment, political environment, demographic environment, legal environment and environmental concerns.

List-I	List-II
(a) Micro external environment	(i) Economic and political factors
(b) Macro external environment	(ii) Competition among diverse products targetting disposable income of consumers
(c) Non-price competition	(iii) Input suppliers
(d) Desire competition	(iv) Sponsoring of events like sports

	(a)	(b)	(c)	(d)
1	(iii)	(i)	(iv)	(ii)
2	(ii)	(iii)	(iv)	(i)
3	(iv)	(ii)	(iii)	(i)
4	(iv)	(i)	(ii)	(iii)