Question

How does the understanding of business environment help the management in the following?

(a) Identification of threats and early warning signals,

(b) Improving performance.

Answer 1

(a) Understanding of business environment help the management in identification of threats on time which serves as an early warning signal enabling the firms to prepare themselves to meet the threats.

(b) Understanding of business environment helps the management in improving performance as the firms can then adopt suitable business practices not only to improve present performance but to continue to succeed in the long run.