PYQ 3 - Learning Business Studies
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    VERY SHORT ANSWER QUESTIONS (1 or 2 Marks)

    QUESTION 1.
    What is Business Environment?

    Answer: Forces affecting the performance of an organization but outside its control are called
    as Business Environment.
    QUESTION 2.
    Which of the sector was given importance after independence?

    Answer: Public sector.

    QUESTION 3.
    How have customers benefited by increased competition after liberalization and
    globalization?

    Answer: While purchasing they get a better quality and wider choice of goods and services.

    QUESTION 4.
    What do you mean by Liberalisation?

    Answer: It means reduction in government controls and restrictions

    QUESTION 5.
    How can the firms cope up with changing technological environment?
    Answer: By developing new ways of doing things.

    QUESTION 6.
    What is meant by opportunities?

    Answer: It refers to the positive external trends that help an enterprise to improve its
    performance

    QUESTION 7.
    What do you mean by Globalization?

    Answer: Globalization means interaction and interdependence of a country with the economies
    of other countries to facilitate free flow of goods and services, capital and technology across
    borders.

     QUESTION 8.
    Which policy of Indian Government has moved India towards globalization?

    Answer: The Industrial Policy of 1991.

    QUESTION 9.
    What do you mean by Innovation?

    Answer: Producing goods and services by newly developed methods is called as Innovation.

    QUESTION 10.
    Name the economic reforms introduced to free Indian business from unnecessary controls
    and restrictions.
    Answer: Liberalisation

    QUESTION 11.
    What do you mean by disinvestment?

    Ans. When the private sector takes over public sector, it is called as disinvestment.

    QUESTION 11.
    Give one measure taken by Indian Government to introduce liberalization.

    Ans. Abolishing licensing requirements.

    SHORT ANSWER QUESTIONS (3 or 4 Marks)

    QUESTION 12.
    Explain how does the understanding of business environment help the management in the
    following:
    (a) Tapping useful resources; and
    (b) Coping with rapid changes.
    (CBSE Board 2015)
    Answer:
         (a) Understanding of business environment helps in tapping useful resources by designing the
    policies that allow it to get the resources it need, so that they can convert resources into
    outputs that the environment desires.
         (b) Understanding of business environment helps in coping with rapid changes by developing
    suitable courses of action to deal with changes taking place in the environment as well as the
    pace of change.

    QUESTION 13.
    An environmental conscious multinational company "AXN Ltd." follows certain well defined
    business principles that result to minimize the employee turnover. Following are some of the
    important environmental factors followed by 'AXN Ltd.'
    (1) Honour the law of every country in which it operates.
    (2) Respect the culture and customs of all nations.
    (3) Provide clean and safe products to enhance the quality of life throughout the world.
    (4) Develop a culture in the company that enhances individual creativity and teamwork while
    honouring mutual trust and respect between management and labour.
    From the above:
    (i) Identify and state any one general principle of management and any one dimension of
    business environment.
    (ii) Also identify any two values which the above guiding principles and environmental factors
    are conveying to the society.
    (CBSE BOARD 2015)
    Answer:
    (i) Principle of management:
    a) Stability of personnel
    b) Esprit de corps
    c) Initiative
    Dimension of business environment:
    a) Legal environment.
    b) Social environment.
    (ii) Values being conveyed:
    a) Respect for law
    b) Cleanliness and hygiene
    c) Raising standard of living
    d) Secularism

    QUESTION 14.
    ‘Accent Electronics Ltd.’ was operating its business in Malaysia. The company started
    exporting its products to India when the Prime Minster announced relaxation in import
    duties on electronic items. The company appointed retailers in India who had direct on-line
    links which the suppliers to replenish stocks when needed.
    Identify and explain the dimensions of business environment discussed in the above case.
    (CBSE BOARD 2016)
    Answer: The dimensions of business environment discussed in the above case are as follows.
    i) Economic Environment: Reference line- "company started exporting its products to India"
    Economic Environment: It comprises the economic variables such as interest rates, income,
    stock market indices that affect the functioning of the enterprises. For example, an increase in
    the income of the consumers in turn increases the demand for goods and services in an
    economy. Similarly, a fall in the interest rates of loans for consumer durables increases the
    spending capacity, and thereby increases the demand for such products.
    ii) Legal Environment:
     "Prime Minister allowed relaxation in import duties on electronic items"
     It comprises of the legislations and rules passed by the government such as
    the Companies Act, Trade union Act, etc. These legislations govern how an enterprise functions
    and behaves. Knowledge of these legislations is essential for enterprises as their noncompliance
    can lead to legal trouble for them.

    QUESTION 15.
    With change in the consumption habits of people, Neelesh, who was running, a sweets shop
    shifted to chocolate business. On the eve of Diwali he offered chocolates in attractive
    packages at reasonable prices. He anticipated huge demand and created a website
    chocolove.com for taking orders online. He got lot of orders online and earned huge profit by
    selling chocolates.
    Identify and explain the dimensions of business environment discussed in the above case.
    (CBSE BOARD 2016)
    Answer. The dimensions of business environment that have been discussed here are as follows.
    i. Social Environment- 'Change in consumption habits of people'
    Social environment refers to the social forces such as customs, traditions, social values, social
    trend etc. For example, religious celebrations provide business opportunities to many
    enterprises such as those producing sweets, decoration items, gifts etc. Similarly, in India a
    change in social trend towards western lifestyle has increased the demand for western wear,
    consumption of fast food, etc.
    ii. Technological Environment- 'Created a website chocolove.com for taking orders online'
    Technological environment comprises of the technological changes and improvements. It
    includes forces relating to scientific improvements and innovations, which provide new ways of
    producing goods and services and new methods and techniques of operating business.

    QUESTION 16.
    Explain the role of political environment in shaping the business.?

    Answer. : It includes political conditions such as general stability and peace in the country and
    the attitude of the elected government representatives hold towards businesses. Political
    stability builds confidence among business community while political instability and bad law &
    order situation may bring uncertainty in business activities.
    A business functions within the framework of political environment. Generally, government's
    policies change with the change of guard in power. Business is required to understand and
    follow such changes and also respect the orders that judiciary gives from time to time.
    For example, after globalization, Government of India allowed many companies to enter the
    Indian market for giving boost to the different industries like food processing industry etc. That
    paved the way for entry of multinationals in India on a large scale.

    QUESTION 17.
    A recent rate cut in the interest on loans announced by the Banks encouraged Amit, a science
    student of Progressive School to take a loan from State Bank of India to experiment and
    develop cars to be powered by fuel produced from garbage. He developed such a car
    and exhibited it in the Science Fair organised by Directorate of Education. He was awarded
    first prize for his invention.
    Identify and explain the dimensions of business environment discussed in the above case.

    Answer. The dimensions of business environment discussed in the above case are as follows.
    i) Economic Environment- Reference line "A recent cut in the interest on loans announced by
    banks."
    ii) Technological Environment- Reference line: "Developed cars to be powered by fuel
    produced from garbage".

    Explanations of aforementioned dimensions of business environment
    i) Economic Environment: It comprises the economic variables such as interest rates, income,
    stock market indices that affect the functioning of the enterprises. For example, an increase in
    the income of the consumers increases the demand for goods and services of the enterprises.
    Similarly, a fall in the interest rates of loans for consumer durables increases the spending
    capacity, and thereby increases the demand for such products.
    ii) Technological Environment: Technological environment comprises the technological
    changes and improvements. For example, introduction of computers and the Internet has
    changed the working style of the organisations today. Similarly, continuous improvement and
    innovations in the technology used in the production improves the quality of production.
    While on the one hand, improvement in technology provides new business opportunities for
    the enterprises; on the other hand, it is a threat for the enterprises using obsolete technology.

    QUESTION 18.
    Enumerate the benefits of understanding business environment.

    Answer. The benefits of understanding business environment are:
    (i) Enabling the identification of opportunities and getting the first mover advantage.
    (ii) Helping in the identification of threats and early
    (iii) Tapping useful resources.
    (iv) Coping with the rapid changes.
    (v) Assisting in planning and policy.
    (vi) Improvement in performance.
    QUESTION 19.
    Business environment or Environmental Scanning helps in the identification of threats and
    early warning signals." Explain?

    Answer. Environmental scanning helps an enterprise to recognize qualitative information in
    advance, which can be used to prepare it for facing likely challenges. For example, if any new
    multinational company is entering the Indian market, the manager of an Indian firm dealing
    with the same product, should take it as a warning signal. He should take measures like
    improving the quality of his product, heavy advertisement etc. to face the challenge.

     QUESTION 20.
    Mention four examples of acquisitions and mergers.

    Answer. Four examples of mergers and acquisitions are:
    (i) SRF buy Ceat's Rayon Tyre Cord.
    (ii) Parle's take-over by Coke.
    (iii) Godrej has bought over Goodnight.
    (iv) Hutch by Vodafone.

    LONG ANSWER TYPE QUESTIONS (5 OR 6 MARKS)

    QUESTION 21.
    Metlapp Networks and Technologies Ltd. is a leader in technology innovation in the United
    States, creating products and solutions for connecting the world. It has a large research and
    development team which invented the first smart watch, named as W-7. The watch besides
    showing the time also monitors few health parameters like heart beat, blood pressure etc.
    While in search of markets abroad, the company found that in India, the reform process was
    underway with the aim of accelerating the pace of economic growth. The company decided
    to take advantage of simplified export procedure and removal of quantitative as well as tariff
    restrictions in India.
    It set up its office in Jamnagar with a view to capture the Indian market. In a short span of
    time, the company emerged as a market leader. Success of the company attracted many
    other players to enter the market. Competition resulted in reduction in prices, there-by
    benefiting the customers.
    (a) In the above paragraph, two major concepts related to government policy have been
    discussed. Identify and explain these concepts.
    (b) Also, explain briefly any three impacts of these concepts on Indian business and industry.

    Answer.
    a. The two concepts related to the government policy discussed in the question are
    Liberalisation and Globalisation.
    1. Liberalisation: Liberalisation refers to the removal of controls and restrictions imposed by
    the government. They indicated the end of the famous license-permit-quota raj in India.
    2. Globalisation: Globalisation refers to the integration of economies of the world. It is the
    process associated with increasing openness, growing economic independence and promoting
    economic integration in the world economy.
    b. The three major impacts of these concepts on Indian business and industry were:
    1. Increased competition: As a result of measures such as abolition of the licensing policy,
    dereservation and encouragement to foreign direct investment, the competition faced by
    industries increased, both internally as well as externally, from foreign enterprises. This
    increase in competition was particularly felt in service industries, such as telecommunication,
    banking and insurance.
    2. Increased demand: With the increased competition, producers increasingly became market oriented. They began to produce goods keeping in mind the market demand. Therefore, the
    availability of goods and services for the consumers and the quality also increased
    tremendously. Thus, consumers gained from quality products and greater variety, and their
    demand for products increased.
    3. Change in business policies: The government policies under the new industrial policy directly
    affected the functioning of business enterprises. As a result, they altered their policies and
    operations appropriately.

    QUESTION 22.
    Social environment of business is important for a business enterprise". Explain ?

    Answer. A business is a part of the society in which it operates. The buying and consumption
    habits of the people, their languages, customs, preferences, tastes etc. are the factors that
    influence the business. The management should be aware of the changes happening in the
    business environment to exploit the right opportunities and to mitigate threats. Cooperation
    between business and society will see business boom and will help growth of professional
    managers. The failure of any business organization in adapting to changes in the social
    environment will lead to dissatisfaction amongst its customers and rejection of its products.
    This shift of demand can affect the survival of the business in the long run. For example, equal
    pay for male and female workers, demand for reservation in jobs for minorities and women etc.

    QUESTION 23.
    Enumerate any ten Positive impacts of liberalization and globalization.

    Answer. The positive impacts of liberalization and globalization are as follow:
    I. Opportunities for new entrepreneurs.
    II. Latest technology becoming available.
    III. Opening up of foreign markets.
    IV. Easy imports of capital goods.
    V. Direct investment by Indian companies abroad.
    VI. Changed attitude of labor unions,
    VII. Easy inflow of foreign capital.
    VIII. Freedom to expand and diversify.
    IX. Restructuring of industries.
    X. Widening of product choices for consumers.

     QUESTION 24.
    Explain any five negative impacts of liberalization and globalization.
    Answer. Following are the negative effects of liberalization and globalization.
    (i) Threats from multinational companies (MNCs) :With the arrival of multinationals it is
    becoming difficult for small and medium business units to even survive. The massive entry and
    consolidation to multinationals in the Indian markets is a challenge that has already forced
    some business enterprises to take the exit route.
    (ii) Destabilization of protected environment :With easier entry of multi-national companies,
    Indian business environment is fast losing its protective shield. The new entrepreneurial
    freedom is creating problems for the existing players. Even manufacturers of Maruti car could
    not retain their market share and had to remodel their products and announce heavy price
    reductions from time to time.
    (iii) Decline in public sector : Public sector is losing markets and their capacity utilization has
    declined, hampering thereby pace of country's technological and economic growth.
    (iv) Sellers' market turned into buyers' market: With the entry of foreign goods .and services,
    shortage of goods, which is a boon for the sellers, has now turned into surplus. Resultantly,
    sales/margin to any sellers have come down substantially. Buyers are now free to buy any
    product of their choice at a price they can afford.
    (v) Fall in the value of rupee : Indian rupee has been devaluing against DOLLAR, EURO and
    many other foreign currencies. This phenomenon has forced even some established exporters
    to encase their stake partly/fully.

    QUESTION 25.
    'Explain 'fiscal reforms' and 'monetary reforms' as per economic change initiated by
    Government of India since 1991.

    Answer.
    (i) Fiscal Reforms
    • Measures have been taken to bring down fiscal deficit.
    • Tax reforms have been initiated to increase revenue and tax compliance
    • Reduction in direct and indirect taxes.
    • Decrease in subsidies.
    (ii) Monetary Reforms
    •Phased reduction of statutory liquidity ratio (SLR).
    •Private sector banks allowed to set up new branches.
    •Banks have now been allowed to access capital market for raising capital.
    •Permission for disinvestment (up to 49% of total equity).

    QUESTION 26.
    Explain any five ways in which managers have responded to changes in business
    environment.
    Answer. Following are the ways in which managers have responded to changes in business
    environment:
    i) Strategic alliance, mergers and consolidation of businesses :To achieve the objectives of
    market dominance, market entry, product ranges etc., the Indian business enterprises are also
    indulging in mergers, acquisitions, amalgamations and takeovers. Initiative for the same has
    naturally come from managers of such enterprises.
    ii) Diversification spree: Managers are leading diversification of their companies into various
    fields. For example, Reliance is now also in the business of communications, retail chains etc.
    Likewise, they are bold enough to diversify into other nations too if the need arises.
    iii) Consolidation of multinationals: Many multinational companies have entered India through
    new joint ventures. For example, General Motors' entry through a joint venture with Hindustan
    Motors.
    iv) Brand Building: Companies are becoming more aggressive towards brand building. Their
    managers are spending huge amounts on the same. Focus is on securing prime positions for
    their brands, through creative media-mix, in the minds of consumers.
    v) Labor : Managers are changing their behavior towards labor. Labors have also benefitted
    through higher wages and other facilities like training to upgrade their skills and job enrichment

    QUESTION 27.
    Briefly discuss the impact of government policy changes on the business and industry.

    Answer:
    The policies of liberalisation, privatisation and globalisation by the government affect the
    functioning of the business enterprises. The following points highlight the impact of
    government policy changes on the business and industry.
    i. Increased Competition: As a result of the policies such as relaxation of the licensing policy
    and reduction of import duties, the competition faced by the domestic firms increases. India
    companies experienced competition in service industry such as telecommunication, banking,
    insurance, etc.
    ii. Increased Demand: As competition increases, the choice of goods and services for the
    consumers also increases. Thus, consumers also gain from quality products and greater variety.
    iii. Change in Business Policies: The government policies directly impact the functioning of the
    business enterprises. As a result, they have to alter their policies appropriately.
    iv. Technological Changes: As competition increases firms tend to find new and innovative
    ways to survive in the market. In such a scenario, technological improvements become
    imperative.
    v. Need for Trained Personnel: Innovations and improvement in product, application of
    improved technologies requires skilled and trained personnel. Thus, there arises a need for the
    development of human resources.
    vi. Greater Market Orientation: With increased competition, the production has become
    market oriented. That is, the enterprises produce as per the demand market.
    vii. Less Reliance on Budgetary Support by Public Sector Enterprises: To survive the increased
    competition, the public sector enterprises must improve efficiency and productivity rather than
    relying on budgetary support to cover their losses.

    On the whole, the impact of Government policy changes particularly in respect of liberalisation,
    privatisation and globalisation has been positive as the Indian business and industry has shown
    great resilience in dealing with the new economic order. Indian enterprises have developed
    strategies and adopted business processes and procedures to meet the challenge of
    competition. They have become more customer-focused and adopted measures to improve
    customer relationship and satisfaction.


    Question 1:
    Metlapp Networks and Technologies Ltd. is a leader in technology innovation in the United States, creating products and solutions for connecting the world. It has,, a large research and development team which invented the first smart watch, named as W-7. The watch besides showing the time, also monitors few health parameters like heart beat, blood pressure etc.
    While in search of markets abroad, the company found that in India, the reform process was underway with the aim of accelerating the pace of economic growth. The company decided to take advantage of simplified export procedure and removal of quantitative as well as tariff restrictions in India.
    It set up its office in Jamnagar with a view to capture the Indian market. In a short span of time, the company emerged as a market leader. Success of the company attracted many other players to enter the market. Competition resulted in reduction in prices, thereby benefiting the customers.
    1.    In the above paragraph, two major concepts related to government policy have been discussed. Identify and explain these concepts.
    2.    Also, explain briefly any three impacts of these concepts on Indian business and industry.
    Answer:
    1.    Liberalisation and globalisation are the two major concepts related to government policy that have been discussed.
    ·         Liberalisation: These economic reforms signalled the end of the licence-pemit-quota raj and were aimed at liberalising the Indian business and industry from all unnecessary controls and restrictions.
    ·         Globalisation: Globalisation means the integration of the various economies of the world leading towards the emergence of a cohesive global economy.
    2.    The three impacts of reforms on Indian business and industry are outlined below:
    ·         Increasing competition: The Indian firms are facing lot of competition due to changes in the rules of industrial licensing and entry of foreign firms. This change is more apparent in the sectors which were earlier reserved for private sector only like banking, insurance, telecommunications, etc.
    ·         More demanding customers: With the easy availability of wider choice in purchasing better quality of goods and services due to high competition consumers have become more aware and demanding. The growing expections of the consumers has increased the pressure on the business firms.
    ·         Rapidly changing technological environment: With the entry of new firms which are far more superior in terms of technology the small firms are facing a lot of challenges. Moreover, the firms are constantly involved in innovating new products and upgrading present products with the help of better technologies in order to satisfy the customers demands.
    Question 2:
    Naman and Govind after finishing their graduation under vocational stream decided to start their own travel agency which will book Rail Tickets and Air Tickets on commission basis. They also thought of providing tickets within ten minutes through the use of internet. They discussed the idea with their Professor Mr. Mehta who liked the idea and suggested them to first analyse the business environment which consists of investors’, competitors and other forces like social, political etc. that may affect their business directly or indirectly. He further told them about the technological improvements and shifts in consumer preferences that were taking place and hence they should be aware of the environmental trends and changes which may hinder their business performance. He emphasised on making plans keeping in mind the threat posed by the competitors, so that they can deal with the situation effectively. This alignment of business operations with the business environment will result in better performance.
    1.    Identify and state the component of business environment highlighted in the above
    Para.
    2.    State any two features of business environment as discussed by Professor Mehta with Naman and Govind.
    3.    Also state two points of importance of business environment as stated by Professor Mehta in the above situation.
    Answer:
    1.    Technological Environment is the component of business environment highlighted in the above Para. Technological Environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    2.    The two features of business environment as discussed by Professor Mehta with Naman and Govind are as follows:
    ·         Dynamic nature: It is dynamic in nature and keeps on changing due to technological upgradations, shifts in consumer preferences or increase in competition in the market.
    ·         Inter-relatedness: All the elements of business environment are closely interrelated. Therefore, any change is one element may necessitate corresponding changes in the other elements as well.
    3.    The two points of importance of business environment as stated by Professor Mehta in the above situation are described below:
    ·         It enables the firm to identify opportunities and getting the first mover advantage: The dynamic business environment provides numerous opportunities for a business to evolve as per the changing needs. Therefore, early identification of the forthcoming opportunities helps an enterprise to be the first to exploit them instead of losing them to the competitors.
    ·         It helps the firm to identify threats and early warning signals: Sometimes the changes in the external environment may pose as a threat and hinder a firm’s performance. An awareness about the business environment helps the managers to identify such threats on time and take necessary decisions and action.
    Question 3:
    With changes in the consumption habits of people, Neelesh, who was running a sweet shop, shifted to the chocolate business. On the eve of Diwali, he offered chocolates in attractive packages at reasonable prices. He anticipated huge demand and created a website chocolove. com for taking orders online. He got a lot of orders online and earned huge profits by selling the chocolate.
    Identify and explain the dimensions of business environment discussed in the above case.
    Answer:
    The various dimensions of business environment being referred to in the above case are as follows:
    1.    Social environment: Social Environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
    2.    Technological environment: Technological Environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    Question 4:
    A recent rate cut in the interest on loans announced by the banks encouraged Amit, a science student of Progressive School, to take a loan from State Bank of India to experiment and develop cars to be powered by fuel produced from garbage. He developed such a car and
    exhibited it in the Science Fair organised by the Directorate of Education. He was awarded the first prize for his invention.
    Identify and explain the dimensions of business environment discussed in the above case.
    Answer:
    The various dimensions of business environment being referred to in the above case are as follows:
    1.    Economic Environment: It comprises of factors that can affect management practices in a business enterprise includes interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.
    2.    Technological Environment: It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    Question 5:
    ‘Accent Electronics Ltd.’ was operating its business in Malaysia. The company started exporting its products to India when the Prime Minister announced relaxation in import duties on electronic items. The company appointed retailers in India who had direct online links with the suppliers to replenish stocks when needed.
    Identify and explain the dimensions of business environment discussed in the above case.
    Answer:
    The various dimensions of business environment being referred to in the above case are as follows:
    1.    Political Environment: Political Environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.
    2.    Technological Environment: Technological Environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    Question 6:
    After completing her MBA, Beni took up a job with a multinational company named Fortio. The company paid good salaries and perks to its employees. The wages were within the paying capacity of the company that provided the employees with a reasonable standard of living. The company also had a good work-culture and the behaviour of superiors was very good towards their subordinates. Beni was very happy in this organisation but due to long working hours, she did not have time to cook her meals. She had to depend upon outside food which was deteriorating her health.
    She observed that this problem was faced by many of her colleagues, not only in her company but also in many other companies. This was because of increase in the number of working women and non-availability of hygienic home-cooked food. She identified this as a great opportunity and decided to give up her job to supply packaged home-cooked food to office-goers at a reasonable price. At the end of the day, she also distributed the leftover food to the nearby night-shelters.
    1.    State the dimension of business environment being discussed above.
    2.    State the principle of management being followed by Fortio.
    3.    Identify any two values being communicated by the company to society in above case.
    Answer:
    1.    The dimension of business environment being discussed above is Social.
    Social Environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
    2.    The principle of management being followed by Fortio is ‘Remuneration of employees’. Remuneration of employees: The overall pay and compensation should be fair to both employees and the organization. The employees should be paid fair wages, which should give them at least a reasonable standard of living. At the same time it should be within the paying capacity of the company i.e. remuneration should be just and equitable.
    3.    The values being communicated by the company to the society are:
    ·         Justice
    ·         Ethical Behaviour
    Question 7:
    After completing his MBA from the USA, Mr. Ajay came to India to start a new business under the banner Ecom Creations Ltd. He launched a new product in e-learning for senior secondary school students in the commerce stream which already had an established market in the UK and the USA but not in India. His business started flourishing in India. As a result, more Indian companies entered into the market with other subjects also.
    Identify and quote the lines from the above paragraph which highlight the significance of understanding business environment.
    Answer:
    1.    The understanding of business environment helps in assisting in planning and policy formulation as its understanding and analysis can be the basis for deciding the future course of action or decision making.
    It enables the firm to identify opportunities and getting the first mover advantage instead of losing them to its competitors.
    ” After completing his MBA from USA, Mr. Ajay came to India .to start a new business under the banner Ecom Creations Ltd. He launched a new product in e-learning for senior secondary school students in the commerce stream which already had an established market in UK and the USA but not in India.”
    2.    It helps in improving performance of an enterprise through continuous monitoring of the environment and adopting suitable business practices which help to improve both their present and future performance.
    “His business started flourishing in India.”
    3.    It helps the firm to identify threats and early warning signals that is likely to hinder a firm’s performance and take timely actions.
    “As a result, more Indian companies entered into the market with other subjects.”
    Question 8:
    As per the directions issued by the Supreme Court, the government passed an order to ban the sale of tobacco products within the area of 200 meters of all educational institutions as:
    1.    Its consumption is injurious to health.
    2.    People are becoming more conscious about health and fitness. This indicates the government’s attitude towards this business.
    Identify the business environment under three different dimensions by quoting from above paragraph.
    Answer:
    The various dimensions of business environment being referred to the in the above case are as follows:
    1.    Legal Environment: “As per the directions issued by the Supreme Court.’
    2.    Political Environment: “The government passed an order to ban the sale of tobacco products within the area of 200 meters of all educational institutions.”
    3.    Social Environment: “Its consumption is injurious to health and people are becoming more conscious about health and fitness.”
    Question 9:
    The court passed an order to ban polythene bags as:
    1.    These bags create many environmental problems which affect the life of people.
    2.    Society at large is more concerned about the quality of life.
    The government decided to give a subsidy to the jute industry in order to promote this business. As a result,—
    ·         Innovative techniques are being developed to manufacture jute bags at low rates.
    ·         Incomes are rising and people can afford to buy these bags.
    Identify the different dimensions of business environment by quoting lines from the above particulars.
    Answer:
    The various dimensions of business environment being referred to in the above case are as follows:
    1.    Legal Environment: “The court passed an order to ban polythene bags.”
    2.    Social Environment: “The bags create many environmental problems which affect the life of people and society at large is more concerned about the,,quality of life.”
    3.    Political Environment: “The government decided to give a subsidy to the jute industry in order to promote this business.”
    4.    Technological environment: “Innovative techniques are being developed to manufacture jute bags at low rate.”
    5.    Economic Environment: “Incomes are rising and people can afford to buy these bags.”
    Question 10:
    The court passed an order that all schools must have water purifiers for the school children as:
    1.    Society in general is more concerned about the quality of life. .
    2.    Innovative techniques are being developed to manufacture water purifiers at competitive rates.
    3.    Incomes are rising and children are drinking purified water at their homes as well.
    4.    The Government is also showing a positive attitude towards the business of water purification.
    Identify the different dimensions of business environment by quoting from the above details.
    Answer:
    The various dimensions of business environment being referred to the in the above case are as follows:
    1.    Legal Environment: “The court passed an order that all schools must have water purifiers for the school children.”
    2.    Social Environment: “Society in general is more concerned about the quality of life.”
    3.    Political Environment: “The government is also showing a positive attitude towards the business of water purifiers.”
    4.    Technological environment: “Innovative techniques are being developed to manufacture water purifiers at competitive rate.”
    5.    Economic Environment: “Incomes are rising and children are drinking purified water at their homes as well.”
    Question 11:
    Just after the declaration of the results of the Lok Sabha Elections, 2009, the Bombay Stock Exchange’s price index (Sensex) rose by 2100 points in a day. Identify the environmental factor which led to this rise.
    Answer:
    Political environment has led to the rise in the sensex.
    Question 12:
    The Government of India is seriously thinking of allowing the oil-marketing public sector undertaking to fix their own prices for petrol and diesel. Which economic reform is the reason for this change in the government’s policy?
    Answer:
    Privatisation as a reform is the reason for this change in the government policy.
    ADDITIONAL QUESTIONS
    Question 1:
    On 8 November 2016, the Government of India announced the demonetisation making all Rs.500 and Rs. 1,000 banknotes of the Mahatma Gandhi Series invalid past midnight. The government claimed that the action would curtail the use of illicit and counterfeit cash to fund illegal activity and terrorism. The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on the day after the announcement. The decision was heavily criticised by members of the opposition parties, leading to debates in both houses of parliament and triggering organised protests against the government in several places across India. People seeking to exchange their bank notes had to stand in lengthy queues, and several deaths were linked to the inconveniences caused due to the rush to exchange cash. After demonetisation the demand for point of sales (POS) or card swipe machines has increased. E-payment options like PayTM has also seen a rise.
    In context of the above case:
    1.    Identify and explain the various dimensions of business environment which relate to the above mentioned case.
    2.    List any through two values that the government seeks to promote through demonetisation.
    Answer:
    1.    The various dimensions of business environment which relate to the above mentioned case are outlined below:
    ·         Political Environment: Political Environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.
    ·         Technological environment: Technological Environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    ·         Legal environment: Legal Environment includes various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— centre, state or local .
    ·         Social environment: Social Environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
    ·         Economic Environment: Economic Environment comprises of factors that can affect management practices in a business enterprise includes interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.
    2.    The two values that the government seeks to promote through demonitisation are:
    ·         Transparency in dealings
    ·         Promote well being of people
    Question 2:
    Post demonitisation in a further push to cashless economy, the Central cabinet has recently approved the ordinance for paying wages via electronic means. Accordingly, the government approved to Amend Section 6 of the Payment Of Wages Act 1936, to allow employers of certain industries to make payment through the electronic mode and cheques . The new ordinance will be applicable to the public sector. Identify the various dimensions of business environment which relate to the above mentioned case.
    Answer:
    The various dimensions of business environment which relate to the above mentioned case stated below:
    1.    Political environment
    2.    Legal environment
    3.    Technology environment
    Question 3:
    Make in India is an initiative launched by the Government of India to encourage national and multinational companies to manufacture their products in India. It focuses on job creation and skill enhancement and is in twenty five sectors of the economy. Under the initiative, brochures on these sectors and a web portal were released. The initiative aims at high quality standards and minimising the impact on the environment. It also seeks to attract foreign capital investment in India.
    In context of the above case:
    1.    Identify the various dimensions of business environment being referred to by quoting lines from the paragraph.
    2.    List any two values which the Government of India wants to convey through this initiative.
    Answer:
    1.    The various dimensions of business environment being referred to in the above case are as follows:
    ·         Political Environment: “Make in India is an initiative launched by the Government of India to encourage national and multinational companies to manufacture their products in India.”
    ·         Technological Environment: “Under the initiative, brochures on the twenty five sectors and a web portal were released.”
    ·         Economic Environment: “It also seeks to attract foreign capital investment in India.”
    2.    The two values which the Government of India wants to convey through this initiative are:
    ·         High quality standards
    ·         Concern for environment
    Question 4:
    India’s retail sector has been undergoing structural changes for the last two decades. On one hand, the ‘mall culture’ has gradually become a way of life, especially in the metros and mini¬metros. On the other hand, there is accelerated growth in e-business as customers also prefer to buy products and services via the Internet, telephone and television. However, operating in either of the segments is marked by the presence of strong competitors.
    Identify the components of specific forces and general forces being discussed in the above paragraph.
    Answer:
    The components of specific forces discussed in the above paragraph are the customers and competitors.
    The components of general forces discussed in the above paragraph is the social and technological conditions.
    Question 5:
    Kapil Sharma is working as the Country Head of a company which owns a chain of malls under the name of ‘Virtuoso’ in the various parts of India. Through an analysis report of the business environment, it has been brought to his notice that in the coming years, shopping at a mall will not be a necessity for the buyers as purchases can be made online from anywhere
    and at any time with ease and at the consumer’s convenience. Hence, malls will have to provide much more than shopping to be able to attract customers. So, he recommends that ‘Virtuoso’ malls should to be restructured into recreation centres, offering more spaces to socialise, host events and concerts, and provide ample Food and Beverages options.
    Consequently the share of entertainment segment and Food and Beverages segment in the overall mall space is increased by 20%. As a result, the company gains enormously by getting the first mover advantage.
    In context of the above case :
    1.    Define the term ‘Business Environment’.
    2.    Explain the terms ‘Threats’ and ‘Opportunities’ by quoting lines from the paragraph.
    Answer:
    1.    The term ‘Business Environment’ means the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its performance.
    2.    The term ‘Threats’ refers to the external environment, trends and changes that will hinder a firm’s performance.
    “Through an analysis report of the business environment, it has been brought to his notice that in the coming years, shopping at a mall will not be a necessity for the buyers as purchases can be made online from anywhere and at any time with ease and at the consumer’s convenience. Hence, malls will have to provide much more than shopping to be able to attract customers.”
    The term ‘opportunities’ refers to the positive external trends or changes that will help a firm to improve its performance.
    “As a result, the company gains enormously by getting the first mover advantage.”
    Question 6:
    “Zero Defect Zero Effect” (ZED) is a slogan coined by the Prime Minister of India, Narendra Modi with reference to the Make in India initiative launched by the government. The slogan reflects the efficiency of production processes, i.e. the products have no defects and the process through which the product is made has zero adverse environmental and ecological effects. The ZED model aims to make India the manufacturing hub of the world and prevent the products developed in India from being rejected by the global market. Moreover, before the initiative was launched, the limits of foreign direct investment in various sectors had been relaxed. The application for licences was made available online and the validity of licences was increased to three years. Various other norms and procedures were also relaxed by the government. In the light of the above paragraph, identify and explain the major component of New Economic Policy of 1991 that are being referred to by quoting lines from the paragraph.
    Answer:
    The major components of New Economic Policy of 1991 that are being referred to are as follows:
    1.    Liberalisation: These economic reforms signalled the end of the licence-pemit-quota raj and were aimed at liberalising the Indian business and industry from all unnecessary controls and restrictions.
    “Moreover, before the initiative was launched, the limits of foreign direct investment in various sectors had been relaxed. The application for licences was made available
    online and the validity of licences was increased to three years. Various other norms and procedures were also relaxed by the government.”
    2.    Globalisation: Globalisation means the integration of the various economies of the world leading towards the emergence of a cohesive global economy.
    “The ZED model aims to make India the manufacturing hub of the world and prevent the products developed in India from being rejected by the global market.”
    Question 7:
    It is interesting to know that the menu items of the multinational food chains are customised to suit the general palates of the local people in the region. When McDonald’s started its business in India in the year 1996, the company went through a complete localisation strategy. McDonald’s changed its product menu to accommodate the vegetable burger given the large vegetarian population. It also altered its store design and even reduced the product price by close to fifteen per cent. Also , the “McAloo Tikki burger” is not available anywhere but in the Indian outlets of McDonalds.
    Identify the relevant feature of business environment being discussed above.
    Answer:
    Relativity is the relevant feature of business environment which is being discussed above.
    Question 8:
    Eco-friendly products are gaining power as the consumers’ awareness about environmental issues has increased over the years and they are conscious about choosing products that do not have adverse effects on the environment. They are now more conscious about the carbon emission and climate change effects, and want themselves to be ‘seen’ as a green advocate among their peers. In such a scenario, it has become a challenge for the companies as they have to not only meet the needs of the consumers but also ensure that their products are safe and environment friendly. As a result, there is growing need for better and advanced technologies to works as a catalyst in this regard.
    1.    Identify the relevant feature of business environment being discussed above.
    2.    Describe briefly any three points which highlight the importance of business environment and its understanding by managers.
    Answer:
    1.    Inter-relatedness is the relevant feature of business environment which is being discussed above.
    2.    The three points which highlight the importance of business environment and its understanding by managers are described below:
    ·         It enables the firm to identify opportunities and getting the first mover advantage: The dynamic business environment provides numerous opportunities for a business to evolve as per the changing needs. Therefore, early identification of the forthcoming opportunities helps an enterprise to be the first to exploit them instead of losing them to the competitors.
    ·         It helps the firm to identify threats and early warning signals: Sometimes the changes in the external environment may pose as a threat and hinder a firm’s performance. An awareness about the business environment helps the managers to identify such threats on time and take necessary decisions and action.
    ·         It helps in tapping useful resources: As the enterprise designs policies that allow it to get the resources that it needs so that it can convert those resources into outputs that the environment desires.
    Question 9:
    In the year 2016, the State Government of Kerala had made it mandatory for anganwadis hostels and canteens in educational institutions to secure the Food Safety and Standards Authority of India (FSSAI) licence to ensure food safety. As the educational institutions also get categorised as food business operators in the event of the annual turnover of the hostels, they run exceeding Rs. 12 lakh per annum.
    In context of the above case:
    1.    Identify and explain the various dimensions of business environment being referred to here.
    2.     List any two values which the State Government of Kerala wants to convey through this initiative.
    Answer:
    1.    The various dimensions of business environment being referred to in the above case are as follows:
    ·         Political Environment: Political environment includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business.
    ·         Legal Environment: Legal environment includes various legislations passed by the government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government -Center, State or Local .
    2.    The two values which the State Government of Kerala wants to convey through this initiative are:
    ·         High quality standards
    ·         Good health
    Question 10:
    Postage stamps have been unveiled to commemorate 140 years of existence of the country’s first stock exchange the Bombay Stock Exchange (BSE). The setting up of BSE is considered to be the greatest revolution that took place in the financial markets in India as it acts as a key driver for economic growth of a country. This is due to the fact that there exists a strong corelation between economic growth and capital accumulation.
    In the context of the above case:
    1.    Identify the dimension of business environment of India being referred here.
    2.    State any three factors which broadly affect the dimension of business environment of India as identified in part (a) of the question.
    Answer:
    1.    Economic environment is the dimension of business environment of India being referred here.
    2.    The three factors which broadly affect the economic environment of India are stated below:
    ·         Stage of economic development of the country.
    ·         The economic structure in the form of mixed economy which recognises the role of both public and private sectors.
    ·         Economic planning, including five year plans, annual budgets, and so on.
    Question 11:
    The organic food market in India is growing at 25-30 per cent which reflects a clear shift in consumer tastes and preferences. The current growth in the organic food market is driven by multiplicity of factors like rising health consciousness, changing lifestyles, increase in disposable income and growing availability of organic food products in shopping malls, retail outlets and online.
    In context of the above case:
    1.    Identify and explain the features of business environment being referred to here.
    2.    By quoting phrases from the paragraph identify the various components of general forces which have led to a growth in the organic food market.
    Answer:
    1.    The features of business environment being referred to in the above case are as follows:
    ·         Dynamic nature: It is dynamic in nature and keeps on changing due to technological upgradations, shifts in consumer preferences or increase in competition in the market.
    ·         Inter-relatedness: All the elements of business environment are closely interrelated. Therefore, any change is one element may necessitate corresponding changes in the other elements as well.
    2.    The various components of general forces which have led to a growth in the organic food market are as follows:
    ·         Social: “rising health consciousness, changing lifestyles”
    ·         Economic: “increase in disposable income”
    ·         Technological: “growing availability of organic food products in shopping malls, retail outlets and online.”
    Question 12:
    Anurag, aspires to work with a socially and environmentally committed company as he does not want to work just for monetary benefits but also the brand value of the company he works for in the society matters a lot to him. Therefore, he has joined Cerebra Integrated Technologies a Bengaluru-based Infotech company. The company has built India’s largest e-waste recycling plant. The company strives to be one of the leading players in this business which has huge potential not only in terms of generating huge revenues and profits but also wants to contribute to the environment issues that have become crucial worldwide. The company sees big business in the mountains of e-waste in Bengaluru which produces 200,000 tonnes of e-waste a year. The company plans to make its millions by extracting metals such as gold and platinum from the e-waste piling up in the city. As a mobile phone, for example, is made up of a combination of rare earth and precious metals: it contains 250 mg of silver, 24 mg of gold and nine mg of palladium while a laptop has 1,000 mg of silver, 220 mg of gold and 500 grams of copper.
    To start the business, the company has obtained a licence from KSPCB ( Karnataka State Pollution Control Board) .
    In context of the above case:
    1.    Identify the various dimensions of business environment being referred to by quoting lines from the paragraph.
    2.    List any two values which the company wants to convey to the society.
    Answer:
    1.    The various dimensions of business environment being referred to the in the above case are as follows:
    ·         Technological Environment: Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    ·          administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— center, state or local.
    ·         Social Environment: Social environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
    2.    The two values which the Cerebra Integrated Technologies wants to convey through this initiative are:
    ·         Sustainable development
    ·         Concern for environment.
    Question 13:
    The government wants to raise Rs.56,500 crore from the sale of stakes in state-owned enterprises National Thermal Power Corporation (NTPC) in the financial year 2016-17.
    Identify and explain the related concept.
    Answer:
    Disinvestment: Disinvestment refers to transfer in the public sector enterprises to the private sector through dilution of stake of the Government in the public enterprise.
    Question 14:
    Bharat is running an ice cream parlour in a local market. Keeping in mind the changing perceptions about health among the people, one of his employee Abhiraj suggests to him that they should introduce a range a flavoured yogurt. Bharat accepts his suggestion as a result both the image and the profitability of his business increases.
    In the context of the above case:
    1.    Identify the feature of management which is being highlighted.
    2.    State the related dimension of the business environment.
    3.    Name and explain the related principle of general management.
    Answer:
    1.    The feature of management which is being highlighted is Dynamic.
    2.    The related dimension of the business environment is Social.
    3.    The related principle of general management is Initiative.
    Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
    Question 15:
    As a result of the decision by Britian to exit to European Union the new trade agreements will come into force from the EU as it accounts for 35-40% of auto component exports from India. Tata Motors owned Britain’s largest carmaker Jaguar Land Rover (JLR) has been in Britain for three decades and makes 4,75,000 cars a year in the country of which most of them are exported inside the European Union and beyond. JLR estimates that their annual profit could be cut by one billion pounds ($1.47 billion) by the year 2020.
    In the context of the above case:
    1.    Explain why are all the elements of business environment considered to be closely interrelated?
    2.    Name any two related dimensions of the business environment.
    Answer:
    1.    All the elements of business environment are considered to be closely interrelated as any change in one of them may necessitate a series of changes in other dimensions as well.
    2.    The related dimensions of the business environment are Political and Legal.
    Question 16::
    After competing his education, Arun joins his father in their family business of manufacturing cookware. As a businessman, his father is rigid in his approach and has fixed ideas about various issues. He tends to maintain a distance from the factory workers. However, Arun is more receptive to the needs of the workers and doesn’t seem to believe in any class- differences. He believes that the prosperity of their business greatly depends upon the prosperity of their workers and vice versa. At the same time, he has a good understanding of the business environment. Therefore, he introduces a new range of green pans that provide a healthy cooking surface, as they are manufactured with all ceramic or silicon coating and are considered safer than the traditional petroleum based nonstick surfaces which may contain toxic substances. Although, the new cookware range is highly priced/, he expects a ready market for it as both the purchasing power of people and their preference for better quality products has increased over the years.
    In the context of the above case:
    1.    Identify the nature of management which is being reflected in the different styles of management in practice adopted by Arun and his father.
    2.    Name and explain the related principle of scientific management.
    3.    State the related dimensions of business environment.
    Answer:
    1.    The different styles of management in practice adopted by Arun and his father reflect that management is an art.
    2.     ‘Harmony, Not Discord’ is the related principle of scientific management.
    Taylor emphasised that there should be complete harmony between the management
    and workers instead of a kind of class-conflict, the mangers versus workers. To achieve this state, Taylor called for complete mental revolution on the part of both management and workers. The prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice versa. He advocated paternalistic style of management should be in practice.
    3.    The related dimensions of the business environment are :
    ·         Economic Environment: Economic environment comprises of factors that can affect management practices in a business enterprise includes interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.
    ·         Social Environment: Social environment includes the social forces like customs and traditions, values, social trends, society’s expectations from business, etc.
    ·         Technological Environment: Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
    Question 17:
    ‘Gallant’ is a well known FMCG (Fast Moving Consumer Goods) company in India. However, for the past few years its profitability is diminishing due to the presence of a new company ‘Prakritik’. ‘Prakritik’ has gradually acquired a reasonable share in a wide variety segments like soaps, shampoos, detergents, dish wash and oral care. One of the key reason is that ‘Prakritik’ has positioned itself as a natural/Ayurvedic brand and this approach has worked well with the Indian consumer. In order to compete with this threat ‘Gallant’ has acquired a premium Ayurvedic brand ‘Madhumita’ from another group. Moreover its likely to increase its advertising budget to counter the threat from ‘Prakritik’.
    In the context of the above case:
    1.    Identify the related component of the business environment which has contributed effectively towards the success of Prakritik.
    2.    Also, state the two ways in which ‘Gallant’ has responded to the changes in its business environment.
    Answer:
    1.    Social aspect is the related component of the business environment which has contributed effectively towards the success of Prakritik.
    2.    The two ways in which ‘Gallant’ has responded to the changes in its business environment are as follows:
    ·         Acquisition
    ·         Brand building


    Q. 1. Mr. Ajay after completing MBA from USA comes to India to start a new business under
    the banner Ecom Creations Ltd. He launches a new product in a e-learning for senior
    Secondary School students in Commerce stream, which already has n established market in
    UK and USA but not in India. His business starts flourishing in India. Now more Indian
    companies entered into the market with other subjects also.
    Identify and quote the lines from above para which highlight the significance of
    understanding business environment. (4 marks)
    Ans.
    ● “Comes to India to start a new business … launches a new product in e-learning for
    Senior secondary school students in Commerce stream.”
    1. It helps in assisting in planning and policy formulation.
    2. It helps the firm to identify opportunities and get the first mover advantage.
    ● “His business starts flourishing in India.”
    1. It helps in improving performance.
    ● “Now more Indian companies entered into the market with different subjects also.”
    1. It helps the firm to identify threats and early warning signals.

    Q. 2. Just after declaration of Lok Sabha Elections 2014 results, the Bombay stock
    exchange’s price index (Sensex) rose by 1000 points in a day. Identify the environmental
    factor which led to this rise giving reason. Also explain any two other dimensions of
    business environment. (5 marks)
    Ans. Rise in stock market index (Sensex) is economic environment. But Political
    environment (declaration of Lok Sabha Elections 2014 results)) led to this rise.
    Two other dimensions of business environment:
    1. Legal Environment:
    2. Technological environment:

    Q. 3. The court passed an order that all schools must have water purifier for the school
    children as
    1. Society in general is more concerned about quality of life.
    2. Innovative techniques are being developed to manufacture water purifier at
    competitive rates.
    3. Incomes are rising and children at home are also drinking purified water.
    The government is also showing positive attitude towards the water purifier business.
    Identify the different dimensions of business environment by quoting from the above details.
    (5 marks)
    Ans.
    1. Legal environment:
    2. Social environment:
    3. Technological environment:
    4. Economic environment:
    5. Political environment:

    Q. 4. ‘It is common now to see CD-ROM’s, computerized information kiosks, and
    Internet/Word Wide Web multimedia pages highlighting the virtues of products.’ Name the
    dimension of the business environment highlighted by this stateme. (1 mark)
    Ans. Technological environment

    Q. 5. Which component of business environment requires that advertisements of baby food
    must necessarily inform the potential buyers that mother’s milk is the best? (1 mark)
    Ans. Legal environment.

    Q. 6. It is the process by which government control over the industry is being loosened.
    Give the term to which this statement is trying to indicate. (1
    mark)
    Ans. Liberalization

    Q. 7. Due to entry of foreign firms, competition for Indian firms has increased, especially in
    service industries. Name such service industries. (1
    mark)
    Ans. Telecommunications, airlines, banking, insurance, etc.

    Q. 8. The Court passed an order to ban polythene bags as
    1. The bags are creating many environmental problems which affect the life of people in
    general.
    2. Society in general is more concerned about quality of life.
    The Government decided to give subsidy to jute industry to promote this business.
    Innovative techniques are being developed to manufacture jute bags at low rates.
    Incomes are rising and people can afford to buy these bags.
    Identify the different dimensions of Business Environment by quoting the lines from the
    above particulars. (5 marks)
    Ans.
    1. Legal environment:
    2. Social environment:
    3. Political environment:
    4. Technological environment:
    5. Economic environment:

    Q. 9. The government of India is seriously thinking of allowing the oil-marketing public sector
    undertaking to fix their own prices for petrol and diesel. Which economic reform is the
    reason for this change in the government’s policy?
    Ans. Privatisation as a reform is the reason for this change in the government policy.

    Q. 10. Kapil Sharma is working as the Country Head of a company which owns a chain of
    malls under the name of ‘Virtuoso’ in the various parts of India. Through an analysis report
    of the business environment, it has been brought to his notice that in the coming years,
    shopping at a mall will not be a necessity for the buyers as purchases can be made online
    from anywhere and at any time with ease and at the consumer’s convenience. Hence, malls
    will have to provide much more than shopping to be able to attract customers. So, he
    recommends that ‘Virtuoso’ malls should to be restructured into recreation centres, offering
    more spaces to socialize, host events and concerts, and provide ample Food and
    Beverages options.
    Consequently the share of entertainment segment and Beverages segment in the overall
    mall space is increased by 20%. As a result, the company gains enormously by getting the
    first mover advantage.
    In context of the above case:
    1. Define the term ‘Business Environment’.
    2. Explain the terms ‘Threats’ and ‘Opportunities’ by quoting lines from the paragraph.
    Ans.
    1. The term ‘Business Environment’ means the sum total of all individuals, institutions
    and other forces that are outside the control of a business enterprise but that may
    affect its performance.
    2. The term ‘threats’ refers to the external environment, trends and changes that will
    hinder a firm’s performance.
    “Trough an analysis report of the business environment, it has been brought to his notice
    that in the coming years, shopping at a mall will not be a necessity for the buyers as
    purchases can be made online from anywhere and at any time with ease and at the
    consumer’s convenience.Hence, malls will have to provide much more than shopping to be
    able to attract customers.”
    The term ‘opportunities’ refers to the positive external or changes that will help a firm to
    improve its performance.
    “As a result, the company gains enormously by getting the first mover advantage.”

    Q. 11. “Zero Defect Zero Effect” (ZED) is a slogan coined by the Prime Minister of India,
    Narendra Modi with reference to the Make in India initiative launched by the government.
    The slogan reflects the efficiency of production processes, i.e. the products have no defects
    and the process through which the product is made has zero adverse environmental and
    ecological effects. The Zed model aims to make India the manufacturing hub of the world
    and prevent the products developed in India from being rejected by the global market.
    Moreover, before the initiative was launched, the limits of foreign direct investment in
    various sectors had been relaxed. The application for licences was made available online
    and the validity of licences was increased to three years. Various other norms and
    procedures were also relaxed by the government.
    In the light of the above paragraph, identify and explain the major component of New
    Economic Policy of 1991 that are being referred to by quoting lines from the paragraph.
    Ans. The major components of New Economic Policy of 1991 that are being referred to are
    as follows:
    ● Liberalization: The economic reforms signaled the end of the licence-permit-quota raj
    and were aimed at liberalizing the Indian business and industry from all unnecessary
    controls and restrictions.
    “Moreover, before the initiative was launched, the limits of foreign direct investment in
    various sectors has been relaxed.The application for licences was made available online
    and the validity of licences was increased to three years. Various other norms and
    procedures were also relaxed by the government.”
    ● Globalization: Globalization means the integration of the various economies of the
    world leading towards the emergence of a cohesive global economy.
    “The ZED model aims to make India the manufacturing hub of the world and prevent the
    products developed in India from being rejected by the global market.”
    Q. 12. Over the years, e-business in our country has witnessed tremendous growth due to
    several reasons. There is significant improvement in the Information Technology
    infrastructure over the last decade as the Government has taken important steps in
    high-speed Internet connectivity. As a result, the broadband networks have not only
    become better but also more affordable. Additionally, Government is trying to make rural
    India connected through broadband – a great possibility for e-business to expand the retail
    market by reaching out to the most remote rural customer. Another catalyst strengthening
    the e-business segment is the country’s favourable demography. It has more than 50% of
    its population below the age of 25 and more than 65% below the age of 35. It is expected
    that, in the year 2020, the average age of an Indian will be 29 years, compared to 37 for
    China and 48 for Japan, this promises for phenomenal increase in e-business. Moreover,
    the penetration of the smartphone in a large section of the population has aptly addressed
    the problem of compute illiteracy. Not with standing the fact that consumers also prefer
    e-business due to multiple factors like convenience, time etc.
    Identify and explain the various dimensions of business environment being referred to in the
    above case.
    Ans. The various dimensions of business environment being referred to in the above case
    are as follows:
    1. Political Environment:
    2. Technological Environment:
    3. Social Environment:

    Q. 13. Beni, after completing her MBA, took up a job a multinational company named
    ‘Fortio’. The company was paying good salary and perks to its employees. The wages
    were within the paying capacity of the company that provided the employees a reasonable
    standard of living. The company also had a good work-culture and the behaviours of
    superiors was very good towards their subordinates. Beni was very happy in this
    organization, but due to long working hours she did not have time to cook her meals. She
    had to depend on outside found, which was deteriorating her health.
    She observed that this problem was faced by many of her colleagues, not only in her
    company but also in many other companies. This was because of increase in the number of
    working women and non-availability of hygienic home-cooked food. She identified this as a
    great opportunity and decided to give up her job to supply packaged home-cooked food to
    office goers at a reasonable price. At the end of the day she also distributing the left-over
    food in the nearby night-shelters.
    1. State the dimension of business environment being discussed above.
    2. State the principle of management being followed by ‘Fortio’.
    3. Identify any two values being communicated by the company to the society in the
    above case. (4 marks)
    Ans.
    1. Social environment which includes social forces like customs and traditions, values
    trends etc.
    ‘this was because of increase in the number of working women and non-availability of
    hygienic home-cooked food.’
    1. Remuneration of employees, which states that the overall pay and compensation
    should be fair to both employees and the organization.
    ‘The company was paying good salary and perks to its employees.The wages were within
    the paying capacity…standard of living.’
    1. Values being communicated by the company to the society are: (Any two)
    1. Good work culture
    2. Good behavior inhuman interaction
    3. Concern for the employees
    4. Respect for law

    Q. 14. Nakul, a manager of Zyco Ltd. always takes into account the changes taking place in
    business environment while determining plans. He accepts changes readily and gives
    useful suggestions to his superior, which results in reduction of costs. As a result,
    company’s profits increase. Nakul enjoys cordial relations with his co-workers and makes
    plans in consultation with his team to achieve organizational goals.
    1. Which characteristic of management is highlighted in the above lines?
    2. Identify and state any two principles of management followed by Zyco Ltd.
    3. Give any two benefits which Zyco Ltd. get by taking into account the changes taking
    place in business environment, quoting the lines from the above para.
    4. State any one value which Nakul wants to communicate to the society. (6
    marks)
    Ans.
    1. Management is a dynamic function.
    2.
    1. Initiative
    This principle indicates that the subordinates should be encouraged to give suggestions and
    make and execute plans within the prescribed limits of authority.
    1. Spirit de corps
    This principle suggests that management should promote a team spirit of unity and harmony
    among the employees.
    1. Benefits of business environment:
    1. It helps in assisting in planning and policy formulation.
    ‘… takes into account the changes taking place in business environment while determining
    plans.’
    1. It helps in improving performance.
    ‘He accepts changes readily and gives useful suggestions to his superior, which results in
    reduction of costs.As a result, company’s profits increase.’
    1. Value:
    ● Team work
    ● Adaptability

    Q. 15. It is interesting to know that the menu items of the multinational food chains are
    customized to suit the general palates of the local people in the region. When McDonald’s
    started its business in India in the year 1996, the company went through a complete
    localization strategy. McDonald’s changed its product menu to accommodate the vegetable
    burger given the large vegetarian population. It also altered its store design and even
    reduced the product price by close to fifteen per cent. Also, the “McAloo Tikki burger” is not
    available anywhere but in the Indian outlets of McDonalds.
    Identify the relevant feature of business environment being discussed above.
    Ans. Relativity is the relevant feature of business environment which is being discussed
    above.

    Q. 16. Eco-friendly products are gaining power as the consumers’ awareness about
    environmental issues has increased over the years and they are conscious about choosing
    products that do not have adverse effects on the environment. They are now more
    conscious about the carbon emission and climate change effects, and want themselves to
    be ‘seen’ as a green advocate among their peers. In such a scenario, it has become a
    challenge for the companies as they have to not only meet the needs of the consumers but
    also ensure that their products are safe and environment friendly. At a result, there is
    growing need for better and advanced technologies to works as a catalyst in this regard.
    1. Identify the relevant feature of business environment being discussed above.
    2. Describe briefly any three points which highlight the importance of business
    environment and its understanding by managers.
    Ans.
    1. Inter-relatedness is the relevant feature of business environment which is being
    discussed above.
    2. The three points which highlighted the importance of business environment and its
    understanding by managers are described below:
    1. It enables the firm to identify opportunities and getting the first mover advantage: The
    dynamic business environment provides numerous opportunities for a business to
    evolve as per the changing needs. Therefore, early identification of the forthcoming
    opportunities helps an enterprise to be the first to exploit them instead of losing them
    to the competitors.
    2. It helps the firm to identify threats and early warning signals: sometimes the changes
    in the external environment may pose as a threat and hinder a firm’s performance.
    An awareness about the business environment helps the managers to identify such
    threats on time and take necessary decisions and action.
    3. It helps in tapping useful resources as the enterprise designs policies that allow it to
    get the resources that it needs so that it can convert those resources into outputs that
    the environment desires.

    Q. 17. Ultra Paint Co. which is manufacturing paints has been enjoying a prominent market
    position as it manufactured best quality paints, made timely payment of taxes to
    government. It assembled various inputs like finance, machines, raw materials, etc. from its
    environment. But since last year it has been dumping its untreated poisonous waste on the
    river bank which has created many health problems for the people. As a result, the court
    passed an order to seal the manufacturing unit of the company.
    1. State the importance of business environment highlighted quoting the line from the
    above case.
    2. Identify any two dimensions of business environment mentioned in the above case by
    quoting lines from it.
    3. State any two values which have been overlooked by the company?
    (5 marks)
    Ans. (a) Business environment helps in tapping useful resources.
    ‘It assembled various inputs like finance, machines, raw materials, etc. from its
    environment.’
    (b) (i) Social environment
    ‘…it has been dumping its untreated poisonous waste on the river bank which has created
    many health problems for the people.’
    (ii) Legal environment
    ‘…the court passed an order to seal the manufacturing unit of the company.’
    1. Value overlooked.
    ● Environment protection
    ● Concern for human life
    ● Respect for law and order
    ● Social responsibility

    Q. 18. Philips, a company manufacturing light bulbs incurred heavy expenditure on scientific
    Research and Development and discovered a technology that made it possible to produce
    an energy efficient light bulb that lasts at least twenty times as long as a standard bulb. It
    resulted in growth and profitability of the company.
    1. Identify and state the dimension of business environment mentioned above.
    2. State the importance of business environment mentioned above by quoting the lines.
    3. State any one value which the company wants to communicate to the society.
    (4 marks)
    Ans.
    1. Technological environment
    It includes forces relating to scientific improvements and innovations which provide
    new ways of producing goods and services, and new methods and techniques of
    operating a business.
    2. Business environment helps a firm to improve its performance.
    ‘It resulted in growth and profitability of the company.’
    3. Value conservation of energy

    Q. 19. Disco Ltd. manufactures fashionable and designer clothes. Recently it finds that the
    demand for its products has been declining. After market research it was discovered that
    fashion and tastes of the consumers is changing at a fast pace. Customers’ demand is
    increasing. New competitors have entered the market with new designs. It is very difficult
    for the company to predict future happenings. Also, it is difficult to know the extent of the
    relative impact of the social, economic, political, technological or legal factors on decrease in
    demand of its products in the market.
    A meeting was held in which managers from different functional levels heading Production,
    Marketing, Finance, etc., for example, Chief Operating Officer, Chief Finance Officer, Vice
    President (Marketing) were present to discuss how to deal with the situation. After a long
    discussion, it was decided that they would study and analyze the market first to identify
    customer tastes and fashion and then manufacture garments accordingly. It was also
    decided to increase expenditure on advertising, after-sales services, etc.
    1. Identify any two features of business environment by quoting the lines from the above
    case.
    2. At which level of management the meeting of managers of Disco Ltd. was held?
    3. Identify any two impact of government policy changes on business, quoting lines from
    the above case.
    4. State the importance of understanding of environment by business managers in the
    light of the above para. (6
    Marks)
    Ans.
    1. Features of business environment:
    1. Dynamic nature: ‘fashion and taste of the consumers is changing at a fast pace.’
    2. Uncertainty: ‘It is very difficult for the company to predict future happening.’
    3. Complexity: ‘It is difficult to know the extent of the relative impact of the social,
    economic, political, technological or legal factors on decrease in demand of its
    products in the market.
    1. Top level management
    2. Impact of government policy changes on business:
    1. Increasing competition: ‘New competitors have entered the market with new designs.’
    2. More demanding customers: ‘Customers’ demand is increasing.’
    3. Market orientation: ‘it was decided that they would study and analyze the market first
    to identify customer tastes and fashion and then manufacture garments accordingly.
    It was also decided to increase expenditure on advertising, after-sales services, etc.’
    1. Business environment helps the manager in coping with rapid changes.

    Q. 20. The organic food market in India is grow at 25-30 per cent which reflects a clear shift
    in consumer tastes and preferences. The current growth in the organic food market is
    driven by multiplicity of factors like rising health consciousness, changing lifestyles, increase
    in disposable income and growing availability of organic food products in shopping malls,
    retail outlets and online.
    In context of the above case:
    1. Identify and explain the features of business environment being referred to here.
    2. By quoting phrases from the paragraph identify the various components of general
    forces which have led to a growth in the organic food market.
    Ans.
    1. The features of business environment being referred to in the above case are as
    follows:
    ● Dynamic nature: It is dynamic in nature and keeps on changing due to technological
    up gradations, shifts in consumer preferences or increase in competition in the
    market.
    ● Inter-relatedness: All the elements of business environment are closely interrelated.
    Therefore, any change is one element may necessitate corresponding changes in the
    other elements as well.
    2. The various components of general forces which have led to a growth in the organic
    food market are as follows:
    1. Social: “rising health consciousness, changing lifestyles”
    2. Economic: “increase in disposable income”
    3. Technological: “growing availability of organic food products in shopping malls, retail
    outlets and on line.”

    Q. 21. Anurag, aspires to work with a socially and environmentally committed company as
    he does not want to work just for monetary benefits but also the brand value of the company
    he works for in the society matters a lot to him. Therefore, he has joined Cerebra Integrated
    Technologies a Bengaluru-based Infotech company. The company has built India’s largest
    e-waste recycling plant. The company strives to be one of the leading players in this
    business which has huge potential not only in terms of generating huge revenues and profits
    but also wants to contribute to the environment issues that have become crucial worldwide.
    The company sees big business in the mountains of e-waste in Bengaluru which produces
    2,00,000 tonnes of e-waste a year. The company plans to make its millions by extracting
    metals such as gold and platinum from the e-waste piling up in the city. As a mobile phone,
    for example, is made up of a combination of rare earth and precious metals: it contains 250
    mg of silver, 24 mg of gold and nine mg of palladium while a laptop has 1,000 mg of silver,
    220 mg of gold and 500 grams of copper.
    To start the business, the company has obtained a licence from KSPCB (Karnataka State
    Pollution Control Board).
    In context of the above case:
    1. Identify the various dimensions of business environment being referred to by quoting
    lines form the paragraph.
    2. List any two values which the company wants to convey to the society.
    Ans.
    1. The various dimensions of business environment being referred to the in the above
    case are as follows:
    ● Technological environment: Technological environment includes forces relating to
    scientific improvements and innovations which provide new ways of producing goods
    and services and new methods and techniques of operating a business.
    ● Legal environment: Legal environment includes various legislations passed by the
    Government administrative orders issued by government authorities, court judgments
    as well as the decisions rendered by various commissions and agencies at every
    level of the government – centre, state or local.
    ● Social Environment: Social environment includes the social forces like customs and
    traditions, values, social trends, society’s expectations from business, etc.
    1. The two values which the Cerebra Integrated Technologies wants to convey through
    this initiative are:
    1. Sustainable development
    2. Concern for environment.

    Q. 22. After competing his education, Arun joins his father in their family business of
    manufacturing cookware. As a businessman, his father is rigid in his approach and has
    fixed ideas about various issues. He tends to maintain a distance from the factory workers.
    However, Arun is more receptive to the needs of the workers and doesn’t seem to believe in
    any class-differences. He believes that the prosperity of their business greatly depends
    upon the prosperity of their workers and vice versa. At the same time, he has a good
    understanding of the business environment. Therefore, he introduces a new range of green
    pans that provide a healthy cooking surface, as they are manufactured with all ceramic or
    silicon coating and are considered safer than the traditional petroleum based nonstick
    surfaces which may contain toxic substances. Although, the new cookware range is highly
    prices, he expects a ready market for it as both the purchasing power of people and their
    preference for better quality products has increased over the years.
    In context of the above case:
    1. Identify the nature of management which is being reflected in the different styles of
    management in practice adopted by Arun and his father.
    2. Name and explain the related principle of scientific management.
    3. State the related dimensions of business environment.
    Ans.
    1. The different styles of management in practice adopted by Arun and his father reflect
    that management is an art.
    2. ‘Harmony, Not Discord’ is the related principle of scientific management.
    3. The related dimensions of the business environment are:
    ● Economic Environment:
    ● Social Environment:
    ● Technological Environment:

    Q. 23. Continuous and comprehensive evaluation is a process of assessment, mandated by
    the right to Education Act, of India. This approach to assessment has been introduced by
    state governments in India, as well as by the Central Board of Secondary Education in India.
    With the introduction of (CCE) system in education there is greater focus on project based
    learning. As a result, besides time and effort the students are willing to invest money to
    enhance the visual appeal of their project files so as to score higher marks. In order to cash
    on the opportunity Rishabh has started a small business unit to manufacture different kinds
    of decorative materials for the project files. He has employed a team of four creative
    designers for developing the innovative material with the help of latest technology.
    However, he has a prejudice against women and therefore pays less salary to them as
    compared to the male staff for equal work.
    In the context of the above case:
    1. Name any two functions of management that Rishabh will have to perform in order to
    manage his business successfully.
    2. Name and explain the principle of management which is being violated by Rishabh.
    3. Identify the related dimensions of the business environment.
    Ans.
    1. The two functions of management that Rishabh will have to perform in order to
    manage his business successfully are Planning and Orgnising.
    2. The principle of management which is being violated by Rishabh is Equity.
    3. The related dimensions of the business environment are:
    1. Legal Environment
    2. Political Environment
    3. Economic Environment
    4. Social Environment
    5. Technological Environment
    Q. 24. Government of India is seriously thinking to allow oil marketing public sector,
    undertaking to fix their own price for petrol and diesel.
    1. Name the economic reform related to this decision of government.
    2. Name other two reforms recommended in new economic policy.
    Ans.
    1. Liberalization
    2. Other two reforms: Privatization and Globalization.

    Q. 25. Recently many companies have planned for significant investment in organizes
    retailing in India. Various factors which have encouraged companies to take these
    decisions are customer income is increasing, rise in standard of living of people. People are
    ready to pay high price for quality goods, government policy of liberalization regarding MNC
    entry and FDI, etc.
    1. Explain briefly changes in business environment under different heads that have
    facilitated the companies’ decision to plan significant investment in retailing.
    2. What has been the impact of these changes with regards to globalization and
    privatization?
    Ans.
    1. Explain recent changes in various environment heads, i.e., economic, social, political,
    legal and technological.
    2. Explain the topic, impact of change in government policy/economic policy.

    Q. 26. Two big banner movies were scheduled to be released on the same date. On the
    last movement release of one of the movies has to be postponed due to opposition of a
    group of people due to some unethical contents related to their religion was shown in the
    that movie. The other movie released on time and made huge profit as there was no
    competition and movie which was postponed suffered loss.
    1. Which feature of business environment is highlighted here.
    2. Identify the dimension of business environment, which delayed the release of movie.
    Ans.
    1. Feature highlighted in ………’relativity’.
    2. The dimension is ……..’social environment’.

    Q. 27. After winning the election, Prime Minister Mr. Narender Modi launched a Campaign of
    ‘Swachh Brarat’ and invited various celebrities to be a part of this Abhiyaan. This spread
    awareness among the people in society and in general, people started becoming more
    careful and aware about the cleanliness around their area. To continue its impact, a new
    service tax for Swachh Bharat was also started. The government is planning to import new
    and better technology to adopt new methods of treating the garbage and waste.
    State the various dimension of business environment mentioned in the above para quoting
    the lines from the above para.
    Ans.
    1. “After wining election ….. campaign of Swachh Bharat.”
    Political Environment
    1. “People in society ….. around their area.”
    2. Social Environment
    3. “A new service tax ….. started.”
    Economic Environment
    1. “Import new technology …. Garbage.”
    Technological Environment

    Q. 28. Even after opening up of Indian Economy, foreign companies found it extremely
    difficult to cut through the bureaucratic and red tapism in government offices. This
    discourages them from investing in India.
    Identify the dimension of environment mention in above para.
    Ans. Political Environment.

    Q. 29. Just after the declaration of Lok Sabha Elections in 2014, the Bombay Stock
    Exchange Index rose by 1000 points.
    Identify the dimension of business environment.
    Ans. Political Environment.

    Q. 30. ‘Mamta Rice Food Ltd’ is a well know rice producing company. The sales have been
    falling down from the beginning of the year. The managing director MR. Bhuvan is worried
    about this situation. With a view to find out the solution of this problem he made a team to
    find but the reasons for downfall of sales. The team conducted the survey and gave
    following four reasons for the downfall of company’s sale.
    1. On account of increase in export duty made by the government, the foreign demand
    has gone down.
    2. Due to availability of other eatable substitute the taste of people is diverted from rice.
    3. The competitor’s imported new technology machine and are producing better quality
    rice.
    4. Due to strain with neighbouring country’s government and our country’s government
    export is effected.
    Identify the dimension of Business Environment discussed in the above case.
    Ans.
    1. Economic Environment
    2. Social Environment
    3. Technological Environment
    4. Political Environment.

    Q. 31. With changes in the consumption habits of people, Neelesh, who was running a
    sweet shop, shifted to the chocolate business. On the eve of Diwali, he offered chocolates
    in attractive packages at reasonable prices. He anticipated huge demand and created a
    website chocolove.com for taking orders online. He got a lot of orders online and earned
    huge profits by selling the chocolate.
    Identify and explain the dimensions of business environment discussed in the above case.
    Ans. The various dimensions of business environment being referred to in the above cased
    are as follows:
    1. Social environment:
    2. Technological environment:

    Q. 32. A recent rate cut in the interest on loans announced by the banks encouraged Amit, a
    science student of Progressive School, to take a loan from State Bank of India to experiment
    and develop cars to be powered by fuel produced form garbage. He developed such a car
    and exhibited it in the Science Fair organized by the Directorate of Education. He was
    awarded the first prize for his invention.
    Identify and explain the dimensions of business environment discussed in the above case.
    Ans. The various dimensions of business environment being referred to in the above case
    are as follows:
    1. Economic Environment:
    2. Technological Environment:

    Q. 33. ‘Accent electronics Ltd.’ was operating its business in Malaysia. The company
    started exporting its products to India when the Prime Minister announced relaxation in
    import duties on electronic items. The company appointed retailers in India who had direct
    online links with the suppliers to replenish stocks when needed.
    Identify and explain the dimensions of business environment discussed in the above case.
    Ans. The various dimensions of business environment being referred to in the above case
    are as follows:
    1. Political Environment:
    2. Technological Environment:

    Q. 34. As per the directions issued by the Supreme Court, the government passed an order
    to ban the sale of tobacco products within the area of 200 meters of all educational
    institutions as:
    1. Its consumptions injurious to health.
    2. People are becoming more conscious about health and fitness. This indicates the
    government’s attitude towards this business.
    Identify the business environment under three different dimensions by quoting from above
    paragraph.
    Ans. The various dimensions of business environment being referred to the in the above
    case are as follows:
    1. Legal Environment: ”As per the directions issued by the Supreme Court.’
    2. Political Environment: “The government passed an order to ban the sale of tobacco
    products within the area of 200 meters of all educational institutions.”
    3. Social Environment: “Its consumption is injurious to health and people are becoming
    more conscious about health and fitness.”

    Q. 35. Make in India is an initiative launched by the Government of India to encourage
    national and multinational companies to manufacture their products in India. It focuses on
    job creation and skill enhancement and is in twenty five sectors of the economy. Under the
    initiative, brochures on these sectors and a web portal were released. The initiative aims at
    high quality standards and minimizing the impact on the environment. It also seeks to
    attract foreign capital investment in India.
    In context of the above case:
    1. Identify the various dimensions of business environment being referred to by quoting
    lines from the paragraph.
    2. List any two values which the Government of India wants to convey through this
    initiative.
    Ans.
    1. The various dimensions of business environment being referred to in the above case
    are as follows:
    1. Political Environment:
    2. Technological Environment:
    3. Economic Environment:
    1. The two values which the Government of India wants to convey through this initiative
    are:
    1. High quality standards
    2. Concern for environment

    Q. 36. India’s retail sector has been undergoing structural changes for the last two decades.
    On one hand, the ‘mall culture’ has gradually become a way of life, especially in the metros
    and mini-metros. On the other hand, there is accelerated growth in e-business as
    customers also prefer to buy products and services via the Interest, telephone and
    television. However, operating in either of the segments is marked by the presence of
    strong competitors.
    Identify the components of specific forces and general forces being discussed in the above
    paragraph.
    Ans. The components of specific forces discussed in the above paragraph are the
    customers and competitors.
    The components of general forces discussed in the above paragraph is the social and
    technological conditions.

    Q. 37. To mark the celebrations of International Family Day on 16 th may 2016, Kurkure
    flagged off India’s first family food train – Kurkure Family Express at New Delhi. The train
    took forty families ona fun culinary experience of a lifetime through an eight-day journey
    across fourteen states in India. A whole lot of fun activities were hosted on the train by the
    travel and food anchors Rocky and mayor.
    The families were selected through an online campaign, ‘Chatpata family photos’. The
    contest attracted approximately 1,000 entries, of which 40 entries that gelled with the
    brand’s image were selected.
    The core idea of the campaign was to bring families from across India together over a
    journey like this. As in today’s time, everyone is busy with their life the family members may
    feel disconnected with each other.
    Identify and explain the various dimensions of business environment being referred to the in
    the above case by quoting lines from the paragraph.
    Ans. The various dimensions of business environment being referred to in the above case
    are as follows:
    1. Technological environment:
    2. Social environment:

    Q. 38. In the year 2016,the State Government of Kerala had made it mandatory for
    anganwadis hostels and canteens in educational institutions to secure the Food Safety and
    standards Authority of India (FSSAI) licence to ensure food safety. As the educational
    institutions also get categorized as food business operators in the event of the annual
    turnover of the hostels, they run exceeding Rs. 12 lakh per annum.
    In context of the above case:
    1. Identify and explain the various dimensions of business environment being referred to
    here.
    2. List any two values which the State Government of Kerala wants to convey through
    this initiative.
    Ans.
    1. The various dimensions of business environment being referred to in the above case
    are as follows:
    1. Political Environment:
    2. Legal environment:
    1. The two values which the State Government of Kerala wants to convey through this
    initiative are:
    1. High quality standards
    2. Good health

    Q. 39. Postage stamps have been unveiled to commemorate 140 years of existence of the
    country’s first stock exchange the Bombay Stock Exchange (BSE). The setting up of BSE is
    considered to be the greatest revolution that took place in the financial markets in India as it
    acts as a key driver for economic growth of a country. This is due to the fact that there
    exists a strong correlation between economic growth and capital accumulation.
    In the context of the above case:
    1. Identify the dimension of business environment of India being referred here.
    2. State any three factors which broadly affected the dimension of business
    environment of India as identified in part (a) of the question.
    Ans.
    1. Economic environment is the dimension of business environment of India being
    referred here.
    2. The three factors which broadly affect the economic environment of India are stated
    below;
    1. Stage of economic development of the country.
    2. The economic structure in the form of mixed economy which recognizes the role of
    both public and private sectors.
    3. Economic planning, including five year plans, annual budgets, and so on

    Q. 40. In May 2016, the government had launched a web-based application which will
    provide as opportunity to all the industries dealing in hazardous waste to apply online and
    get online permissions for import and export of certain categories of waste, which is for
    reuse, recycling or recovery while it will also help authorities in web-based processing,
    generation and grant of various types of permissions to the entrepreneurs and industries. It
    is also aimed at implementing the concept of paperless and green office and provide
    information regarding number authorizations or consent order granted by the State Pollution
    control Boards (SPCBs).
    Identify the various dimensions of business environment being referred in the above case.
    Ans.
    1. The various dimensions of business environment being referred to the in the above
    case are as follows:
    1. Political Environment:
    2. Technological Environment:
    3. Legal Environment:
    4. Social Environment:
    5. Economic Environment:

    Q. 41. Bharat is running an ice cream parlour in a local market. Keeping in mind the
    changing perceptions about health among the people, one of his employee Abhiraj suggests
    to him that they should introduce a range a flavoured yogurt. Bharat accepts his suggestion
    as a result both the image and the profitability of his business increases.
    In the context of the above case:
    1. Identify the feature of management which is being highlighted.
    2. State the related dimension of the business environment.
    3. Name and explain the related principle of general management.
    Ans.
    1. The feature of management which is being highlighted is Dynamic.
    2. The related dimension of the business environment is Social.
    3. The related principle of general management is Initiative.
    Initiative means taking the first step with self-motivation. The workers should be
    encouraged to develop and carry out their plans for improvement. Suggestion system
    should be adopted in the organization.

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    This blog is created by Mrs. Kavita Jain, Principal, Kendriya Vidyalaya Gail Vijaipur. You can mail your suggestions and Feedback to us at our email address: kavitajainkv@gmail.com
    Born with a teacher's heart, learning and teaching are her bloodlines. she loves to learn and likes to teach. She is equally passionate about creating a learned and qualified next generation for her nation. She aims to reach out all who need help or are in doubt. She enjoys discussing the intricacies of her subject and turning them into lucid terms for all to understand in an easy and phased manner with a joyful experience.