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 :
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 :
The dimensions of business environment highlighted in the above case are :
Show Hint
Government Order/Law = Legal.
Government Policy/Duty Change = Political.
New Machinery/Method = Technological.
Government Policy/Duty Change = Political.
New Machinery/Method = Technological.
Updated On: Jul 18, 2026
- Technological and legal environments
- Political and technological environments
- Legal and social environments
- Political and legal environments
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The Correct Option is D
Solution and Explanation
Concept:
• Business environment dimensions include Political, Economic, Social, Technological, and Legal (PESTEL).
• Legal environment includes laws, administrative orders, and court judgements.
• Political environment includes government policies, ideologies, and stability.
Step 1: Analyze the 'Safety Standards' part
The government "ordered new safety standards."
Any mandatory standard, regulation, or order issued by the government or a statutory body falls under the 'Legal Environment'.
Step 2: Analyze the 'Import Duties' part
The government "announced a reduction in import duties."
Decisions regarding taxes, duties, and trade policies are part of the 'Political Environment' as they reflect the government's current economic policy and ideology.
(Note: While it has economic impact, the *act* of the government changing the duty is a political/administrative decision).
Step 3: Combining the dimensions
Since both a regulatory order (Legal) and a policy change in duties (Political) are present, the correct combination is Political and Legal environments.
• Business environment dimensions include Political, Economic, Social, Technological, and Legal (PESTEL).
• Legal environment includes laws, administrative orders, and court judgements.
• Political environment includes government policies, ideologies, and stability.
Step 1: Analyze the 'Safety Standards' part
The government "ordered new safety standards."
Any mandatory standard, regulation, or order issued by the government or a statutory body falls under the 'Legal Environment'.
Step 2: Analyze the 'Import Duties' part
The government "announced a reduction in import duties."
Decisions regarding taxes, duties, and trade policies are part of the 'Political Environment' as they reflect the government's current economic policy and ideology.
(Note: While it has economic impact, the *act* of the government changing the duty is a political/administrative decision).
Step 3: Combining the dimensions
Since both a regulatory order (Legal) and a policy change in duties (Political) are present, the correct combination is Political and Legal environments.
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