Case Study Questions: Business Environment

Important Case Study Questions of Business Environment

Q1. “Business environment is dynamic”. Comment by mentioning three examples.

Ans. The Business environment is dynamic in the sense that it keeps on changing rapidly. Only those enterprises that can scan the changes in the environment on time can survive in the competitive market. Examples:

(a) rapidly changing technology has affected the business world. Many new products are being introduced in the market like refrigerators with biofresh technology or door cooling technology etc.

(b) The spread of literacy and public consciousness has contributed to arousing the aspirations of people and today business enterprises give priority to customer’s preferences and demands.

Q2. “Companies that fail to adapt to their environment are unlikely to survive in the long run. “Discuss by giving any four points.

Ans. The given statement is true. Discuss the ‘importance of the business environment.’

Q3. Premier Publications a book publishing company, identifies ‘CBSE New Design of Question Paper’ as an opportunity early and publishes its book as per the changed CBSE pattern much before its competitors. Which environment awareness is being identified by Premier Publications?

Ans. Premier Publications is identifying the opportunities to get a first-mover advantage.

Q4. “Business environment offers both opportunities as well as threats.” Do you agree with this statement? Support your answer with suitable examples.

Ans. Yes, I agree with the given statement. Environment scanning helps an enterprise to identify opportunities and threats. Opportunities mean the positive external trends or changes that will help a company to improve its performance. Opportunities can be in the form of easy accessibility of the latest technology, opening up of new investment avenues, increased orders, world quality products due to tough competition, etc. For Example, Maruti Udyog became the leader in the small car market because it was the first to recognize the opportunity of need for small cars. The business environment also provides threats. Threats mean the external environment trends and changes that will hinder a firm’s performance. Threats can be in the form of increased competition, non-availability of trained personnel, shortage of raw materials, shift in consumer demand to other products, etc., For example, with the rise in Chinese toys, Indian toy manufacturers have to face stiff competition from Chinese toys.

Q5. The court passed an order that all the schools must have water purifiers for the school children:

(a) Society in general is more concerned about quality of life

(b) Innovative techniques are being developed to manufacture water purifiers at competitive rates;

(c) Incomes are rising and children at home are also drinking purified water. The government is also showing a positive attitude towards the water purifier business.

Identify the different dimensions of the business environment by quoting from the above details.

Ans. (a) Legal Environment: The court passed an order that all schools must have water purifiers for the school children.’

(b) Social Environment: ‘Society in general is more concerned about quality of life.’

(c)Technological Environment: ‘Innovative techniques are being developed to manufacture water purifiers at competitive rates.’

(d) Economic Environment: ‘Incomes are rising and children at home are also drinking purified water.’

(e) Political Environment: ‘The government is also showing a positive attitude towards the water purifier business.’

Q6. Give any two examples of the impact on business organizations due to changes in the economic environment.

Ans. Following are the examples of the impact on business organizations due to changes in the economic environment:

(a) Gain: The insurance sector has been opened for private investment. Earlier there were only government agencies like LIC, New India Assurance, etc. Now with the policy change, many private companies have entered the field like Max India Insurance, Tata Insurance, etc.

(b) Loss: Gradual reduction in the subsidy on Kerosene and LPG has increased the cost for the industries using them as inputs to production.

Q7. 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:

(a) its consumption is injurious to health.

(b) People are becoming more conscious about health and fitness.

It indicates the government’s attitude towards this business. There is a fall in government revenues. Identify the ‘Business Environment’ under four different dimensions quoting the lines from the above para.

Ans. (a) Legal Environment: As per the directions issued by the Supreme Court, the government passed an order to ban the sale of tobacco products within an area of 200 meters of all educational institutions.

(b) Political Environment: The government passed an order to ban the sale of tobacco products within the area of 200 meters of all educational institutions.

People are becoming more conscious about health and fitness.
Consumption of tobacco products is injurious to health

(d) Economic Environment: There is a fall in government revenue (i.e., taxes, from the sale of tobacco products.)

Q8. The finance minister reduced the repo rate to overcome the recession. Which dimension of the business environment is highlighted by this statement?

Ans. Economic environment

Q9. The Reserve Bank of India increased the Cash Reserve Ratio by 0.25 Basis Points to overcome the inflationary trends in the economy. Identify the dimension of the business environment highlighted by this statement.

Ans. Economic environment.

Q10.The attractive rate of interest on home loans has increased the demand for homes and has given a boost to the business of builders and property dealers. Which dimension of the business environment is highlighted by this statement?

Ans. Economic environment

Q11. “Due to the worldwide recession of 2009, many of the American Banks closed down.” This is related to which dimension of the business environment.

Ans. Economic environment

Q12. The change in family composition has led to an increase in the nuclear family concept. It has increased the demand for different types of household goods. Which dimension of the business environment is highlighted by this statement?

Ans. Social environment

Q13. The celebration of festivals like Diwali, Id, Christmas, Lohri, Guru parv, etc. provides significant financial opportunities to many businesses like greeting card companies, confectionery or sweets manufacturers, gift-producing companies, etc.

Name the dimension of the business environment highlighted by this statement.

Ans. Social environment

Q14. Kumar Industries is facing a lot of opposites as it pays less salary to women workers as compared to men workers for equal work. Which dimension of the business environment is being violated in the given situation?

Ans. Social environment

Q15 Give any two examples of the impact on business organizations due to changes in a technological environment.

Ans. The examples are:

(a) Color TV technology has shut down the market for black and white television.

(b) Now paint companies use computers for mixing the colors to come out with consumers’ desired shades for whitewash purposes.

Q16.The project of Nano car reestablished in Gujrat is indicated by which factor of environment.

Ans. Political factor.

Q17. Name the component of the business environment that describes those advertisements of baby food must necessarily inform the potential buyers that mother’s milk is the best.

Ans. Legal environment

Q18. Wages and salaries to be paid by the business organizations must not be less than as prescribed under ‘The Minimum Wages Act, 1948.’ Which component of the business environment is highlighted in the given statement?

Ans. Legal environment

Q19. As per the Consumer Protection Act, of 1986, manufacturers are under an obligation to provide all the relevant information like MRP, ingredients, date of manufacturing, quantity, expiry date, etc. about the product. Name the dimension of the business environment highlighted by this statement.

Ans. Legal environment

Q20. Give any three examples of the impact on business organizations due to changes in a legal environment.

Ans. Examples of the impact on business organizations due to changes in the legal environment are:

(a) The government of India had banned the advertisements of alcoholic products. This has affected the business of those companies manufacturing alcoholic products.

(b) In August 1993, the Supreme Court passed an order to close the iron foundries around the famous Taj Mahal to avoid an adverse impact of air pollution caused by them on the beauty of the Taj Mahal.

(c) According to the Weights and Measures Act (2000), every eatable product must bear a green dot for vegetarian ingredients and a red dot for non-vegetarian contents. Any failure in this respect will attract a penalty.

Q21. The government of India is seriously thinking of allowing oil marketing public sector undertakings to fix their price for petrol and diesel. Which economic reform is the reason for this change in government policy?

Ans. Liberalization

Q22. After 1991, the market forces have become very dynamic as a result of which the business enterprises have to modify their existing policies and operations from time to time.” State the impact of government policy changes on business highlighted by the statement.

Ans. Necessity for change

Q23. Two Big Bollywood Movies were scheduled to be released on the same data. But at the last moment, the release of one movie had to be postponed due to opposition by a group of people because of some unethical content in the movie. The loss suffered by the movie being postponed, provided an opportunity for the released movie, to earn maximum profits.

(a) Which characteristic of the business environment is highlighted in the given case?

(b) Identify and explain the dimension of the business environment, which led to the postponement of a movie.

Ans. (a) Relative concept

(b) Social environment

Q24. Speed Tours Ltd. It is a travel agency that books rail tickets on a commission basis. It takes two days for the speed tours to get the tickets from the Railway Reservation Counter and deliver the same to the consumers. In the last year, there has been a drastic decrease in its business as most of the consumers have shifted to Times Tour and Travels Ltd. Which provides tickets within ½ hour through the use of the internet.

(a) Which dimension of the business environment is being overlooked by Speed Tours Ltd.?

(b) Why is it important for business firms to emphasize this dimension of the business environment?

(c) Identify the characteristics of the business environment highlighted in the following statement: ‘Change of booking of rail tickets from Railway Reservation Counter to Internet.’

Ans. (a) Technological environment

(b) It is important for business firms to closely monitor the changes taking place in the technological environment because they will have to implement these changes to remain in the competitive market. Speed Tours Ltd. Faced a decrease in business because it failed to adopt modern technology of internet booking.

Q25. Lately, many companies have planned for significant investments in organized retailing in India. Several factors have prompted their decisions in this regard consumer’s income is increasing. People have developed a taste for better-quality products even though they may have to pay more. The government cannot permit foreign direct investment in some sectors of retailing.

Identify the changes in the business environment under different dimensions, quoting the lines from the above para.

Ans. Dimension of the business environment

(a) Economic environment – ‘Customer income is increasing.’

(b) Social environment- ‘People have developed a taste for better quality products even though they may have to pay more.’

(c) Political environment- ‘The government permitted can’t percent foreign direct investment in some sectors of retailing.’

Q26. “Social trends present various opportunities and threats to business units.” Give an example.

Ans. Health and fitness trends have created demand for diet soft drinks, nutritious food, mineral (bottled) water, gyms, etc. However, this trend has harmed businesses in other industries like dairy processing, tobacco, and liquor.

Q27. Just after the declaration of Lok Sabha elections 2009 results, the Bombay Stock Exchange’s Price Index rose by 2,100 points in a day. Name the dimension of the business environment highlighted by this state.

Ans. Political environment

Q28. Recently our economy has been facing inflation and the value of the rupee is declining considerably, RBI has taken many remedial measures to check these problems. Identify and explain the dimension of the business environment highlighted by the statement.

Ans. Economic environment

Q29. The Delhi government imposes a ban on the use, storage, sale, and manufacture of plastic bags after considering their adverse impact on the environment and ecology. Name and explain the dimension of the business environment highlighted in the given statement.

Ans. Legal environment

Q30. The recent measures undertaken by the Reserve Bank of India to strengthen the rupee include the policies of export promotion and import substitution.

Identify and explain the dimension of the business environment highlighted in the above statement.

Ans. Economic environment

Q31. (a) “Terrorism in Jammu and Kashmir has badly affected the tourism industry in the state.”

(b) “In August 1993, The Supreme Court passed an order to close the iron foundries around the famous Taj Mahal to avoid an adverse impact of air pollution caused by them on the beauty of Taj Mahal.”

Identify and explain the dimension of the business environment highlighted in the above statements.

Ans. (a) Political environment

(b) Legal environment

Q32. “It may be difficult to know the extent of the relative impact of the social, economic, political, technological, or legal factors on change in demand of a product in the market.” Which characteristic of the business environment is highlighted by this statement?

Ans. Business environment is complex

Q33. Even after the opening up of the Indian Economy in 1991, foreign companies found it extremely difficult to cut through the bureaucratic red tape to get permits for doing business in India, which discouraged them from investing in our country. Identify the component of the business environment mentioned in the above para.

Ans. Political environment

Q34. “It is common now to see CD-ROMs, computerized information kiosks, and internet/ world wide web multimedia pages highlighting the virtues of products.’ Which dimension of the business environment is highlighted by this statement?

Ans. Technological environment

Q35. Dashing Ltd. manufactures fashionable and designer clothes. Recently it found that the demand for its products has been declining. After market research, it was discovered that fashion and tastes of the consumers is changing rapidly. Customer 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 the decrease in demand for its products in the market.

A meeting was held in which managers from different functional levels heading production, marketing, finance, etc. 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 produce garments accordingly. It was also decided to increase expenditure on adventuring, after-sales services, etc.

(a) Identify any two features of the business environment by quoting the lines from the above case.

(b) Identify any two impacts of government policy changes on business, quoting lines from the above case.

(c) State the importance of understanding of environment by business managers in the light of the above para.

Ans. (a) Features of business environment

(i) Dynamic nature (fashion and taste of the consumer is changing rapidly.)

(ii) Uncertainly (It is very difficult for the company to predict future happenings.)

(iii) Complexity (it is difficult to know the extent of the relative impact of the social, economic, political, technological, or legal factors on the decrease in demand for its products in the market.)

(b) Impact of government policy changes on business

(i) Increasing Competition (new competitors have entered the market with new designs.)

(ii) More Demanding customers- (Customer demand is increasing.)

(iii) Market Orientation- (it was decided that they would study and analyze the market first to identify customer tastes and fashion and then produce garments accordingly.)

(It was also decided to increase expenditure on advertising, after-sales services, etc.)

Q36. Mr. Daljit Alag is the Divisional Manager of the Export Division of Freshness Tea Company. For some time in the past, a restriction has been imposed on the export of tea. The company’s export business depends on the Government’s policy. Recently there has been a change of Government in the Centre. As soon as the new Government took over, it removed the restriction imposed on the export of tea. With the coming of this news, the division under Mr. Daljeet Alag heaved a sigh of relief.

(a) The change of Government is having its impact on the two dimensions of the business environment. Identify them.

(b) Identify the characteristics of the business environment which is highlighted above.

Ans. (a) (i) Political environment – A new Government coming into power.

(ii) Economic Environment- Change in the policy of import- Export

(b) Interrelatedness.

Q37. For the last few years companies in India have been looking at organized retailing as a good opportunity. To this view, several companies have planned to enter this environment. The government too is fully supporting this approach. The main reason for the attraction of companies to this approach is the increase in the income of people. Besides, there has been a big change in the buying attitude of the people for the last few years. Now people want better quality products, even if they have to pay more money for them. Organized Retailing is competent to fulfill this desire of the people. Identify the three dimensions of the business environment by quoting the lines from the above.

Ans. (a) Political Environment – “The Government too…. This approach.”

(b) economic Environment – “The main reason for the attraction… income of people.”

Q38. ‘Delhi Rice Ltd.’ is a famous Rice producing company. The sales have been falling right from the beginning of the year. The managing Director Mr. Harsh Kapoor is worried about this situation. To find out the solution to this problem, he made a team of four people, in this team. One Manager, One Deputy Manager, one superintendent, and one Senior worker were included. After the survey, he told the following four reasons for the fall in the company’s sales.

(i) On account of the increase in export duty made by the Government, the foreign demand has gone down.

(ii) On account of the availability of several eatable substitutes the attention of people has been diverted from rice.

(iii) Some other rice-producing companies have set up imported machines with which they are producing better quality.

(iv) The export has been affected on account of bitterness created in the relations with one of the chief rice-importing countries. When this report reached the Managing Director, he concluded that all these changes had taken place so fast that they had not been able to guess or to cope with them in time.

(a) Identify the four dimensions of the business environment discussed above by quoting the lines.

(b) Which point of importance of the business environment has the managing director admitted his inability to guess of?

Ans. (a) (i) Economic Environment- ‘On account of increase in export duty… the foreign demand has fallen.’

(ii) Social Environment – ‘On account of the availability… diverted from rice.’

(iii) Technological Environment – ‘Some other rice producing … better quality.’

(iv) Political Environment- ‘The export has been affected …. Prominent rice importing countries.’

(b) Coping with rapid changes.

Q39. Beni after completing her MBA, took up a job with a multinational company named ‘Fortio’. The company was paying good salaries and perks to its employees. The wages were within the paying capacity of the company which provided the employees a reasonable standard of living. The company also had a good work culture and the behavior of the superior 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 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 the 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 officegoers at a reasonable price. At the end of the day, she was also distributing the leftover food in the nearby night shelters.

(a) State the dimension of the business environment being discussed above.

(b) State the principle of management being followed by ‘Fortio.’

(c) Identify any two values being communicated by the company to society in the above case.

Ans. (a) Social Environment which includes social forces like customs and traditions, values, social trends, etc.

‘This was because of the increase in the number of working women and non-availability of hygienic home-cooked food.

(b) Remuneration of employee’s states that the overall pay and compensation should be fair to both employees and the organization.

‘The company was paying good salaries and perks to its employees. The wages were within the paying capacity standard of living.’

(i) good work culture (ii) good behavior in human interaction.

(iii) concern for the employees. (iv) Respect for law.

Q40. An environmentally conscious company ‘GVN Ltd.’ Has its business in all parts of the country. The company follows certain well-defined business principles that result in minimizing employee turnover. Following are some of the environmental factors followed by GVN Ltd.:

(a) Honor the law of the country as well as that of the states in which it operates.

(b) Respect the culture and customs of all states.

(c) Provide clean and safe products to enhance the quality of life throughout the country.

(d) Develop a culture in the company that enhances individual creativity and teamwork while honoring mutual trust and respect between management and labor.

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 that the above guiding principles and environmental factors are conveying to the society.

Ans. (i) Principle of management:

(a) Stability of personnel (b) Espirit de crops (c) Initiative.

Dimension of business environment:

(a) Legal environment (b) social environment

(ii) Values being conveyed:

(a) respect for the law (c) raising the standard of living

(b) Cleanliness and hygiene (d) Secularism

Q41.Glorious Paint Co. which manufactures paints has been enjoying a prominent market position as it manufactures the best quality paints, and made timely payments of taxes to the 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.

(a) State the importance of the business environment mentioned above by quoting the lines from the above case.

(b) Identify any two dimensions of the business environment mentioned above by quoting the lines.

(c) Identify any two values which have been overlooked by the company.

Ans. (a) Business environment helps in tapping useful resources.

‘It assembled various inputs like finance, machine, 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.’

(i) Environment protection (ii) Concern for human life

(iii) Respect for law and order (iv) Social responsibility

Q42.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 the growth and profitability of the company.

(a) Identify and state the dimension of the business environment highlighted above.

(b) State the importance of the business environment highlighted quoting the line from the above para.

(c) State any one value that the company wants to communicate to society.

Ans. (a) Technological environment.

(b) Business environment helps in improving performance.

‘It resulted in growth and profitability of the company.’

Q43. Recently the health minister has finalized a proposal to make, the dangers of tobacco use a part of the curriculum for school students for the age group between 12-15 years. On access to this information, one of the leading publishing companies made appropriate changes in their books and published its book much before its competitors. This step has increased their sales and profit tremendously. The management of the publishing company decided to donate 10% of the profit for the rejuvenation of children who are addicted to tobacco in one or other form.

(a) Identify the dimension of the business environment mentioned above by quoting the line.

(b) State the importance of the business environment highlighted above by quoting the line.

(c) State any two values shown by the publishing company.

Ans. (a) Political environment

‘Recently the health minister has finalized a proposal to make, the dangers of tobacco– use a part of the curriculum for school students for the age group between 12-15 years.’

(b) it enables the firm to identify opportunities and get the first-mover advantage.

‘On access to this information, one of the leading publishing companies made appropriate changes in their books and published its books much before its competitors. This step has increased their sales and profits tremendously.

(i) Fulfilling the social responsibility (ii) Alertness (iii) Dynamic approach.

Q44. “Alcohol beverages are prohibited to be advertised on media.” Which component of the business environment is highlighted by this statement? What values are boosted by the government?

Ans. Legal environment

Value points

(a) Welfare of the family/ society

(b) Protection, and care for society

(d) Abiding by the law

Q45. “The government restricted the use of LPG cylinders to only nine per family per year.” Name the dimension of the business environment highlighted in the above statement.

(a) Identify and explain the dimension of the business environment highlighted above.

(b) What is the value hereby elicited by the government?

Ans. (a) Political environment

(b) Value points

(i) Encouraging the use of alternate resources

(ii) Economically usage of commodities.

(iii) Proper utilization of scarce resources.

(iv) To be conscious of living within a limited budget of available commodities.

Q46. ‘Demand for reservation in jobs for minorities.’

(a) Identify and explain the type of dimension of the business environment highlighted in the above statement.

(b) State the values promoted in the above case.

Ans. (a) Social environment

(b) Value Points

(i) Preferences to minority section

(ii) Improve their standard of living

(iii) Being considerate

(iv) Equality

Q47. The Government has directed the automobile industry to design and produce fuel-efficient vehicles given the rising level of pollution and ever-increasing prices of oil and petroleum products.

(a) Name and explain the component of the business environment that is relative to the above case.

(b) Write any two values that are promoted in the above case.

Ans. (a) Technology environment

(b) Value Points

(i) Good Living

(ii) Environment protection

(iii) Decrease in running cost of the vehicles

Q48. Wadhwa Ltd. Decided to start its new venture in Delhi. For this, they needed to understand the business environment of the area. It was realized by the company that the business environment of Deli was very hard to understand unless and until it was divided into different business dimensions like social, economic, political, legal, and technological. After understanding the business situation, the company started to study the close links between different elements of the business environment. They gave a proper shape to their research and the business got started with full force. Later they realized that the products they were selling in Delhi were more fit for the American culture and decided to start a new branch in New York where the demand for their products was very high from the first day. The company came to be recognized and, in a few years, became a global brand. The reason for its success in different countries was the adaptability it showed in meeting the changing environment. The company keeps track of all happening and does a periodic survey of the choices of the customers.

Identify and explain the four characteristics of the business environment highlighted in the above case by quoting the lines.

Ans. (a) Complexity

“It was realized ……. technological.’

(b) Interrelatedness.

“After understanding …………. Elements of business environment.’

‘Later they realized…. Very high from the first day.’

(d) Dynamic nature

‘The reason…. Changing environment.

Q49. Advertisement of a protein supplement must inform the potential buyer that the product if taken beyond a certain limit can be harmful for the diabetics. Identify the dimension of the business environment highlighted here.

Ans. Legal environment.

Q50. ‘Global Solutions’ is a well-known software company. It has many branches throughout the world. The company knows that it has great opportunities in its path. When it started it was limited only to its native country. With time, within 15 years the economies of various countries have integrated. This has come as a great advantage to this company which has expanded. In many of the countries where it has its branch the control of government in the public sector enterprise has diluted leading to more control in the hands of the private sector. One of the major reasons for the success of the company has been the role of the initiator the company has played as it was the first company of its kind to enter the market.

(a) Identify the two important concepts highlighted above by quoting the lines.

(b) Identify and state the importance of the business environment highlighted above by quoting the line.

Ans. (a) (i) Globalization- ‘With the passage …… have integrated.’

(ii) Disinvestment – ‘In many of the countries …. in the hands of the private sector.’

(b) It enables the firm to identify opportunities and get the first-mover advantage.

“The role of the initiator …. enter the market.’

Q51. The internet has changed the way of conducting business. The government has also promoted online companies to flourish in the changing business scenario. ‘Order Online’ is an entrepreneurial initiative by a group of young management experts. The company has entered the domain of providing online selling. Many new companies have also entered after seeing them enter this mode of business and many of these companies are foreign in origin. Companies dealing in online business know that in today’s world, customers have lots of options. The customer is no longer dependent on a single company for the product he requires. This has empowered the customer who has more choices and the result is a fragmented market. The companies selling with monopoly in the market are the stories of the past. The products offered by the companies are going through different types of technological changes. The companies are trying to give a variety of technologically advanced products. ‘Order Online’ is a company which is right now selling 250 products online.

Recently, it tried to increase the number of products to be sold by 25 but it realized that many of these products were not allowed by the government to be sold in their territory.

(a) Identify the three impacts of government policy changes on business and industry highlighted in the above case by quoting the lines.

(b) Identify the dimension of the business environment highlighted above by quoting the line.

Ans. (a) (i) Increasing competition- ‘Many new companies …. foreign in origin.’

(ii) More demanding customers – ‘This has empowered …. a fragmented market.’

(iii) Rapidly changing technological environment- ‘The companies are trying…. Technologically advanced.’

(b) Legal environment- ‘Recently…. To be sold in their territory.’

Q52. Shiv Naresh is a sports equipment company. It has different branches in different parts of the world. However, the requirements of sports equipment are different in different branches. This is due to the change in culture and lifestyles of people in the different countries. The market in which it is dealing is known for awareness of health. The more the awareness the more is the demand for such equipment. The company knows that the demand for these products is unpredictable as new designs keep on coming and the industry keeps on changing frequently. The research and development departments keep on updating the equipment as per the changes in the business environment. However, the outside business environment is characterized by changes in the tastes and preferences of consumers, entry of new competitors in the market, changes in government policies, etc. A meeting was organized recently to understand the external business environment. However, after the meeting, it was realized that the business environment cannot be understood in total it can only be understood by breaking it into its dimension. The result of a successful meeting could be seen later in the performance of the company which created record sales in the coming year.

Identify four features of the business environment highlighted in the above case by quoting the lines:

Ans. (a) Relativity- ‘This is due …. Different countries.’

(b) Uncertainly – ‘The company …. Changing frequently.’

(d) Complexity – ‘However, offer the meeting … its dimensions.’

Q53. ‘Badshah Steel’ is a steel manufacturing company. Mr. Tushar is a director of the company. His brother is also a director in a public sector undertaking Mr. Tushar advises his brother to make his company run properly otherwise they can also face the same result that less performing public sector undertakings have faced. The public sector undertaking now has changed and is trying to generate high revenues for their functioning as government support has declined.

In the above case identify and state which impact of government policy changes on business has been highlighted.

Ans. Loss of budgetary support to the public sector.

Q54. Indians mostly eat veg as per the studies of KFC so it has planned to introduce veg rice meals in its menu.

(a) Which characteristic of management is highlighted in the given statement?

(b) name and explain the dimension of the business environment that is responsible for this step of KFC

Ans. (a) Management is a dynamic function

(b) Social environment

Q55. Reliable Ltd. A multinational company enters the Indian market. The management of leaders Ltd. An Indian company dealing with the same production recognized quality information in advance and asked the workers to work overtime to produce more to proactively handle the threat. But they were not paid adequate wages for extra time worked by them. They felt dissatisfied all the time and never contributed to their maximum

(a) Identify and explain the importance of the business environment highlighted in the above case.

(b) Name the principle of Fayol which is violated in the above case.

Ans. (a) Business environment enables the firm to identify opportunities and get the first mover advantage.

(b) Remuneration of employees.

Q56. The Directors of a leading book publishing company identified the importance of value-based questions in the C.B.S.E. curriculum as an early opportunity to publish a book on these types of questions. The book became very popular as no other book had these types of questions. The turnover of the company increased considerably and it decided to provide fair wages to employees to ensure at least a reasonable standard of living

(a) identify and explain the importance of understanding the business environment highlighted above.

(b) Identify the principle of management being referred to above.

Ans. (a) It enables the firm to identify opportunities and get the first mover advantage.

(b) Remuneration of employees.

Q57. Mr. Akshat after doing MBA from London came to India to start a new business named H.P. Developers Ltd. He launched a new product in e-learning for Senior Secondary School Students in Commerce Stream, which already has an established market in London but not in India. His business starts Flourishing in India. Now more Indian companies entered into the market with different other subjects also. Mr. Akshat also encourages his employees to develop and carry out their plans for improvements.

(a) Identify and explain the significance of understanding the business environment highlighted above.

(b) Identify which Fayol’s principle is being referred to above.

(c) Now more companies have entered into the market with new substitutes. So, which advantages of understanding the business environment do you think is applicable? Explain it.

Ans. (a) It enables the firm to identify opportunities and get the first-mover advantage.

(b) Initiative

Leave a Comment Cancel reply