Which of the following characterizes the nonmarket component of business environment?
A) It includes those interactions between firms, suppliers, and customers that are governed by markets and contracts.
B) The interactions of firms typically involve voluntary economic transactions and the exchange of property.
C) Activities in the nonmarket environment may be voluntary or involuntary.
D) Effective management in the nonmarket environment is not a necessary condition for superior performance.

Question

Quizplus · Accepted Answer

The nonmarket component of the business environment refers to those interactions between firms and their external stakeholders that are not governed by markets or contracts. These interactions may include activities such as lobbying, public relations, and corporate social responsibility initiatives. These activities may be voluntary, such as when a firm chooses to engage in corporate social responsibility initiatives, or involuntary, such as when a firm is compelled to respond to a regulatory investigation or public backlash.

Which of the Following Characterizes the Nonmarket Component of Business