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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
How would you argue that the success of a business enterprise is significantly influenced by its environment ? |
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Answer» It is correct to say that the success of business enterprises is greatly influenced by the force and factors prevailing in environment by analysing and scanning the business environment. Business get the following benefits (i) First mover advantage (ii) Warning signal (iii) Helps in tapping business rescurces (iv) Assisting in planning and policy formation. (v) Improvement in performance (vi) Helps to adopt rapid changes. |
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| 2. |
Obstacles to privatisation areA. opposition by labourersB. problem of financingC. political pressureD. All of these |
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Answer» Correct Answer - D Privatisation includes transfer of ownership of government businesses to private hands due to which it has to face stiff resistance from employees of those undertakings and from opposition political parties, along with that funds are required in huge amounts |
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| 3. |
On which date PM Modi announced demonetisation?A. 13th November, 2016B. 8th November, 2016C. 18th November, 2016D. 8th October, 2016 |
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Answer» Correct Answer - B The Union cabinet was informed about the plan on 8 November 2016 in a meeting in the evening called by the Indian Prime Minister Narendra Modi. Soon after the meeting, Modi announced the demonetisation in an unscheduled live national televised address at 20:15 IST. |
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| 4. |
The people of some regions translated the slogan of "come Alive" used by pepsi company as "come out of the grave". As a result company lost its market share rather than picking up. This is the effect of which environment and how does this dimension of environment affect the business ? |
| Answer» This is the effect of social environment. As people misunderstood the meaning of slogan and it hurt their sentiments so they decided to stop the use of this product which is playing with their sentiments. The social environment has great influence over the demand of customers because social environment constituents taste preference, tradition and expectations of customers, the customer is the king pin in present day market and you can win over your competitor only by winning large segment of customers. although changes in the social environment may affect the business slowly or quickly but the cost of ignoring the customs, traditions, tastes and preference of the people could be very high. | |
| 5. |
Name the term/process which means intergrating the economy with the rest of the world. |
| Answer» Correct Answer - Globalisation | |
| 6. |
How does political unrest affect business firms ? |
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Answer» Firms should track their political environment. Change in the political factors can affect business strategy because of the following reasons: The stability of a political system can affect the appeal of a particular local market. Government actions influence the economic environment. |
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| 7. |
State two reforms under liberalisation related to goods and services |
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Answer» Two reforms under liberalisation related to goods and services: 1.Freedom in deciding prices of goods and services. 2.Removal of restrictions on the movement of goods and services. |
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| 8. |
What is the full form of BIFR ? |
| Answer» The Board for Industrial and Financial Reconstruction (BIFR) was an agency of the Government of India, part of the Department of Financial Services of the Ministry of Finance. | |
| 9. |
The project of Nano car reestablished in Gujrat is indicated by which factor of environment ? |
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Answer» Political factor. Political environment includes politi-cal conditions such as general stability and peace in the coun- try and specific attitudes that elected government representatives hold towards business. The significance of political conditions in business success lies in the predictability of business activities under stable political conditions. On the other hand, there may be uncertainty of business activities due to political unrest and threats to law and order. |
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| 10. |
Name the term/process under which reduction in tax rates and lifting of unnecessary control over the economy was undertaker. |
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Answer» Liberalisation. Liberalization refers to laws or rules being liberalized, or relaxed, by a government. .While liberal is used to refer to more than just politics––you can have liberal parents––liberalization is used only when speaking of economic or social policies or other government regulations |
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| 11. |
If new products are introduced in market by new techniqe, which type of environment is indicated by it ? |
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Answer» 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. |
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| 12. |
What is the purpose of formation of FIFB ? |
| Answer» The Foreign Investment Promotion Board (FIPB) was a national agency of Government of India, with the remit to consider and recommend foreign direct investment (FDI) which does not come under the automatic route band was setup to promote foreign investment in India. | |
| 13. |
Explain, with examples, the various dimensions of business environment. |
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Answer» Dimensions of Business Environment (i) Economic environment :The economic environment consists of the factors and forces concerning with means of production and distribution of wealth. It comprises of interest rate, rate of inflation, value of GDP, per capita income, tax rates, disposable income, etc (ii) Social environment :The social environment consists of all the social and cultural forces within which business firms operate. It comprises of customs and traditions, values social trends, etc (iii) Technological environment: It refers to the change, taking place in the method of production and use of equipment to improve the quality of product (iv) Political environment: The political environment consists of the forces concerning management of public affairs and their impact on business. It includes political conditions in the country and attitude of the government towards businesses and business policy (v) Legal environment :The legal environment consists of laws and regulations of the country. These laws have been implemented by the government through Companies Act, Factories Act, Competitions Act, etc. It is necessary for business enterprises to comply with these laws. |
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| 14. |
Why is it important for business enterprises to understand their environment? Explain briefly |
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Answer» It is important for business enterprises to understand their environment because of the following reasons: (i) It helps business firms to identify opportunities and get the first mover advantage. (ii) It helps business firms to identify threats and get warning signals (iii) It helps in coping with rapid changes (iv) It helps in planning and policy formulation. |
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| 15. |
Mention the various dimensions of business environment |
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Answer» The various dimensions of business environment are as follows : 1. Economic environment : The economic environment consists of the factors and forces concerning with means of production and distribution of wealth. 2. Social environment : The social environment consists of all the social cultural forces within which business firms operate. 3. Political environment : The political environment consists of the forces concerning management of public affairs and their impact on business. 4. Technological environment : It refers to the change taking place in the method of production and use of equipment to improve the quality of product. 5. Legal environment : The legal environment consists of laws and regulations of the country. |
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| 16. |
Define Market Orientation |
| Answer» Market orientation is an approach to business that prioritizes identifying the needs and desires of consumers and creating products that satisfy them. | |
| 17. |
As a foreign tourist visited India, he noticed that Indian markets, tastes, trends and regulations were different from that of his country. Which feature of business environment is reflected here?A. Business environment has uncertaintyB. Business environment is dynamicC. Business environment is a relative conceptD. All of the above |
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Answer» Correct Answer - C Business environment is a relative concept as it differs from country to country and region to region. e.g. Demand for sarees is quite high in India but in foreign countries, it has no existence |
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| 18. |
Which of the following option correctly describes the difference between specific and general forces of business environment?A. Specific forces affect the individual enterprise directly, whereas general forces have indirect impact on all business enterprisesB. General forces have direct impact on individual enterprise, whereas specific forces have indirect impact on business enterprise.C. Specific forces does not affect an enterprise at all, whereas general forces affects directly on all business enterprisesD. None of the above |
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Answer» Correct Answer - A Specific forces affect the individual enterprise directly, whereas general forces have indirect impact on all business enterprises which correctly describes the difference between specific and general forces of business environment |
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| 19. |
Why is it important for business enterprises to understand their environment ? Explain briefly. |
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Answer» It is important for business enterprises to understand their environment because of the following reasons : 1.It helps business firms to identify opportunities and get the first mover advantage : Opportunities are the positive trends that help firms to grow. A good knowledge of business environment helps the manager to identify opportunities earlier to take its benefit rather than losing it to other competing enterprises. 2. It helps business firms to identify threats and get warning signals : The businessmen who are able to scan and understand the business environment on time get a warning signal to deal with such negative changes. 3. It helps in coping with rapid changes : In order to cope up with such changes and derive benefit from them ,managers must examine the environment and develop suitable action. 4. It helps in planning and policy formulation : Business environment is a source of identifying both opportunities and threats, its proper analysis and understanding provides the base for planning and guides in framing policies. |
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| 20. |
What changes were made in the industrial policy in recent past ? |
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Answer» In recent past following changes took place; 1) Industrial delicencing. 2) Industrial sector has been deregulised. 3) Abolition of MRTP Act. 4) foreign investment policy and foreign technology policy has been introduced. |
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| 21. |
Business environment is ………, as it consists of inter-related factors affecting business enterprises at the same time.A. simpleB. complexC. dynamicD. Either (a) or (c) |
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Answer» Correct Answer - B Business environment is complex as it consists of inter-related factors affecting business enterprises at the same time. |
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| 22. |
. ……...assists in planning and helps in policy formation.A. Group dynamicsB. Business environmentC. Turn around managementD. None of the above |
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Answer» Correct Answer - B Since, business environment is a source of identifying both opportunities and threats, its proper analysis and understanding provides the base for planning and guides in framing policies |
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| 23. |
Do changes in environment influence the business decisions ? |
| Answer» Yes, the changes in business environment affect the business decisions. The functioning and performance of an organisation is dependent on several external forces. A change in these external forces alters the business functioning. Similarly, technological changes also affect business decision. | |
| 24. |
Identify the examples of changes in business environment that affect business enterprisesA. Increase in taxes by government can make products expensive, causing reduced demandB. Change in taste and fashion may shift demandC. Technological improvements may render existing products obsoleteD. All of the above |
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Answer» Correct Answer - D Increase in taxes by government can make products expensive, causing reduced demand,Change in taste and fashion may shift demand and Technological improvements may render existing products obsolete all three are the examples of changes in business environment that affect business enterprises. |
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| 25. |
What is Online Wallet ? |
| Answer» An online wallet is a software or web service that allows users to store and control their online shopping information, such as logins, passwords, shipping address and credit card details. It also provides a method for consumers to purchase products from online retailers. | |
| 26. |
What is L.P.G in context of business environment ? |
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Answer» in business environment L.P.G stands for (i) L: Liberalisation The economic reforms that were introduced were aimed at liberalising the Indian business and industry from all unnecessary controls and restrictions. They signalled the end of the licence-pemit-quota raj. Liberalisation of the Indian industry has taken place with respect to:(i) abolishing licensing requirement in most of the industries except a short list, (ii) freedom in deciding the scale of business activities i.e., no restrictions on expansion or contraction of business activities, (iii) removal of restrictions on the movement of goods and services, (iv) freedom in fixing the prices of goods services, (v) reduction in tax rates and lifting of unnecessary controls over the economy, (vi) simplifying procedures for imports and experts, and (vii) making it easier to attract foreign capital and technology to India. (ii) P:Privatisation.The new set of economic reforms aimed at giving greater role to the private sector in the nation building process and a reduced role to the public sector. This was a reversal. (iii) G: Globalisation.Globalisation: means the integration of the various economies of the world leading towards the emergence of a cohesive global economy. Till 1991, the Government of India had followed a policy of strictly regulating imports in value and volume terms. These regulations were with respect to (a) licensing of imports, (b) tariff restrictions and (c) quantitative restrictions. The new economic reforms aimed at trade liberalisation were directed towards import liberalisation, export promotion through rationalisation of the tariff structure and reforms with respect to foreign exchange so that the country does not remain isolated from the rest of the world. Globalisation involves an increased level of interaction and interdependence among the various nations of the global economy. Physical geographical gap or political |
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| 27. |
Distinguish between economic and non-economic environment. |
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Answer» Economic environment comprises of the economic variables such as interest rates, income, stock market indices that affect the functioning of the enterprises. For example, an increase in income affects the demand for goods and services of the enterprises. On the other hand, Non economic environment includes all other factors affecting the business operations of the organisation including social, cultural, political, legal and technological factors. |
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| 28. |
How is economic environment different from social environmental ? |
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Answer» Economic environment comprises of the economic variables such as interest rates, income, stock market indices that affect the functioning of the enterprises. For example, an increase in income affects the demand for goods and services of the enterprises. On the other hand, 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, etc. |
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| 29. |
Explain the key components of general environment. |
| Answer» The general environment, which includes an array of external influences, such as the environment, technology, economic conditions, demographics, socio-cultural forces, political or legal factors | |
| 30. |
Liberalisation meansA. integration among economiesB. reduced government controls and restrictionsC. policy of planned disinvestmentsD. None of the above |
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Answer» Correct Answer - B Liberalisation means reduced government controls and restrictions |
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| 31. |
List two examples of change in social environment which affect business organisation. |
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Answer» (i) Belief and customs of people. (ii) Education system. |
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| 32. |
Which dimension of business environment is concerned with improvement and innovations, which provides new ways of producing goods and services?A. Technological environmentB. Economic environmentC. Legal environmentD. None of the above |
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Answer» Correct Answer - A Technological environment refers to the state of science and technology in the country and related aspects such as rate of technological progress, institutional arrangements for development and application of new technology, etc |
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| 33. |
How would you argue that the success of business enterprise is significantly influenced by its environment ? |
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Answer» Significance of business environment for enterprise is marked by the following reasons : 1.It enables the business firms to identify opportunities and get the first mover advantage : Opportunities are the positive trends that help firms to grow. A good knowledge of business environment helps the manager to identify opportunities earlier to take its benefit rather than losing it to other competing enterprises. 2. It helps business firms to identify threats and get warning signals : The businessmen who are able to scan and understand the business environment on time get a warning signal to deal with such negative changes. 3. It helps in coping with rapid changes : In order to cope up with such changes and derive benefit from them ,managers must examine the environment and develop suitable action. 4. It helps in planning and policy formulation : Business environment is a source of identifying both opportunities and threats, its proper analysis and understanding provides the base for planning and guides in framing policies. 5. It helps in tapping useful resources : Environment is a source of various resources for business like finance , machinery, raw materials e.t.c. A good understanding of environment helps the firm to convert resource into output required by the environment and society. |
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| 34. |
What do you understand by business environment? |
| Answer» Business environment refers to the sum total of factors and institutions that operate outside the business enterprise, but affects its performance It includes social, economic, political, legal and technological factors | |
| 35. |
How would you argue that the success of a business enterprise is significantly influenced by its environment? |
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Answer» Significance of business environment for an enterprise is marked by the following reasons (i) It enables the firm to identify opportunities and get the first mover advantage: Opportunities are the positive trends that help firms to grow. A good knowledge of business environment helps a manager to identify such opportunities earlier to take its benefit, rather than losing it to other competing enterprises. (ii) It helps the firm to identify threats and early warning signals :Threats refer to the negative trends, which will hinder the performance of the enterprise. The businessmen, who are able to scan and understand the business environment on time get a warning signal to deal with such negative changes. (iii) It helps in tapping useful resources: Environment is a source of various resources for business like finance, machinery, raw materials, etc. Contrary to this, business enterprise supplies goods and services to the society in the form of taxes, products, return on investment, etc. A good understanding of environment helps the firm to convert such resources into output required by the environment and society (iv) It helps in coping with rapid changes :Business environment is fast changing due to turbulent market conditions, more demanding customers, changing technology and increasing global competition. In order to cope up with such changes and derive benefit from them, managers must examine their environment and develop suitable action |
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| 36. |
How would you characterstics business environment ? Explain, with example, the difference between general and specific environment. |
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Answer» Business environment is characterize as the sum total of factors and institution that operate outside the business enterprise , but may affects its performance. Business environment consists of factors that influences many enterprises at the same time. It consists of social ,political, economic, legal and technological factors such as change in taxation , fashion, taste the consumers, increased competition , etc, which affect the working of a business significantly. Difference between specific and general environment : Specific environment : It effects individual enterprises directly.Investors, customers,competitors and suppliers are the examples of specific environment. General environment : It has impact on all the business enterprises.social, political, legal and technological conditions example of general environment. Features of business environment : 1.TOTALITY OF EXTERNAL FORCES : Business environment is aggregative in nature because it is the sum total of all things to business enterprise. 2. SPECIFIC AND GENERAL FORCES : Business environment includes both specific and general forces. 3. INTER RELATEDNESS : Different elements of business environment activity interrelated. E.g increased awareness for healthcare have increased the demand of many healthcare products like sugar free ,diet Coke , cholesterol free oil, etc. 4. DYNAMIC NATURE : Business environment is dynamic in nature as it keeps on changing whether in terms of upgradation of technologies, shifts in consumer preference , change in government policy or changes in trends and traditions. |
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| 37. |
What constitutes the general environment of business ? |
| Answer» Components of general environment are legal, political, technological, social and economic circumstances which affects any organisation indirectly. | |
| 38. |
Which of the following is an example of social envronment ?A. Money supply in the economyB. Consumer protection actC. The constitution of the countryD. Composition of family |
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Answer» Correct Answer - (d) Here option (d), is correct which indicates composition of family. |
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| 39. |
Which of the following best indicates the importance of business environment ?A. IdentificationB. Improvement in performanceC. Coping with rapid changesD. All of them |
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Answer» Correct Answer - (d) Option (d) all of them is correct here. |
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| 40. |
Which of the following does not characterise the business environment ?A. UncertainityB. EmployeesC. RelativityD. Complexity |
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Answer» Correct Answer - (b) EMPLOYEES (B) |
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| 41. |
Which of the following does not characterise the business environment?A. UncertaintyB. EmployeesC. RelativityD. Complexity |
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Answer» Correct Answer - B b.Employees |
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| 42. |
Which of the following best indicates the importance of business environment?A. IdentificationB. Improvement in performanceC. Coping with rapid changesD. All of the above |
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Answer» Correct Answer - D d.All of the above. |
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| 43. |
Which of the following is an example of social environment?A. Money supply in the economyB. Consumer Protection ActC. The Constitution of the countryD. Composition of family |
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Answer» Correct Answer - D Composition of family is an example of social environment. |
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| 44. |
Liberalisation meansA. Integration among economlesB. Reduced government controls and restrictionC. Policy of planned disinvestmentD. None of them |
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Answer» Correct Answer - (b) The option (b) reduced government controls and restriction is correct answer. |
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| 45. |
The court passed an order to ban polythene bags as (i) These bags are creating many environmental problems which offect the life of people in general. (ii) Society in general is more concerned about quality of life The governement 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 by these bags. Identify the different dimensions of business Environment by quoting the lines from the above particulars. |
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Answer» (i) Legal Environment It constitutes the laws and various legislations passed in the parliament. Like as Trade Mark Act, Essential Commodity Act, Weights and Measures Act etc (ii) Social Environment It consists of the customs and traditions of the society in which business is existing. It includes the standard of living. taste, preferences etc (iii) Technological Environment It refers to changes taking place in the method of production, use of equipments and machineries to improves the quality of product. (iv) Economic Environment It consists of Gross Domestic product, Income at National level and per capital level. Profit earning rate, monetary and fiscal policy of the government etc. |
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| 46. |
Briefly discuss the impact of government policy changes on business and industry |
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Answer» Impacts of government policy changes on business and industry are: (i)Increasing competition :Changes in the rules of licensing and entry of foreign firms has increased the competition for Indian firms in many industries like banking, communication etc (ii) More demanding customers: Due to increase in competition and availability of large number of products, customers are becoming more choosy (iii) Market orientation :Earlier, firms use to produce first and then sell the goods in the market, but now, producers have become market oriented where they analyse the market first and then produce goods accordingly |
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| 47. |
What does truly globalised economy signify? |
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Answer» A truly globalised economy implies a boundary less world where there is: (i) free flow of goods and services across nations (ii) free flow of capital across nations (iii) free flow of information and technology across borders (iv)free movement of people across borders. |
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| 48. |
Give two examples of the impact on business organisations due to change in Economic environment. |
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Answer» Two impacts of changes in economic environment are: (i) Due to reforms in the banking sector bank loans are now easily available on easy terms. This has led to an increase in production, investment and expenditure. (ii) Changes in economic environment has resulted in establishment of mutual funds and venture capital business |
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| 49. |
What is technological environment? Give an example for the same. |
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Answer» Technological environment refers to the changes in the output production methods, use of equipment and quality of product. It includes forces related to scientific innovations and improvements in products as well as production technology For example, with recent improvements in technology and computerisation, marketing and selling of products in now possible online leading to increase in sales and output of many firms. |
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| 50. |
Pan Masala chabana swasthya ke liye hanikarak hai. This statutory warning is compulsory to be mentioned on the labels of the product. Identify and discuss the environment, which is associated with this example |
| Answer» Legal environment is associated with above stated example. It includes various legislations passed by the government, court judgements decisions of various commissions and agencies at every level of administration Non compliance of these regulations can create legal problem for business enterprises A number of laws have been implemented by the government through the enactment of the Companies Act, Foreign Exchange Management Act, Factories Act, etc | |