Revision

WORKSHEETworksheet
3
Chapter 3 (Business Environment)
1. The term ‘business environment’ means the sum total of all ________, _________and other
__________that are outside the control of a business enterprise but that may affect its performance.
2. Identify the feature of business environment from following statements :
a) It is very difficult to predict future happenings, especially when environment changes are
taking place too frequently
b) Business environment keeps on changing whether in terms of technological improvement,
shifts in consumer preferences or entry of new competition in the market
c) Business environment is aggregative in nature as it is sum total of all things external to
business firms
d) Business environment differs from country to country and even region to region.
e) Business environment have some forces which effect business firms directly but some
factors affect them indirectly
f) Business environment is easy to understand in parts separately but it is difficult to
understand in totality.
g) All the forces/factors of a business environment are closely linked and get affected by each
other
h) Demand for sarees may be high in India but almost negligible in Europe
i) Increase in literacy rate (social environment) lead to increase in demand for books and
stationery (economic environment)

3. It refer to the positive external trends or changes that will help a firm to improve its performance.
4. It refer to the external environment trends and changes that will hinder a firm’s performance.
5. Identify the point of importance of business environment from following statements :
a) Enterprises that continuously monitor their environment and adopt suitable business
practices are the ones which not only improve their present performance but also continue to
succeed in the market for a longer period.
b) Managers must understand and examine the environment and develop suitable courses of
action according to changing business environment
c) Early identification of opportunities helps an enterprise to be the first to exploit them instead
of losing them to competitors.
d) A business enterprise assembles various resources called inputs from environment and
supplies the environment with its outputs such as goods and services. This can be done
better by understanding what the environment has to offer.
e) Bajaj Auto made considerable improvements in its two wheelers when Honda & other
companies entered the auto industry.
f) ITC Hotels planned new hotels in India after observing boom in tourism sector.
g) Maruti Udyog became the leader in the small car market because it was the first to recognise
the need for small cars in an environment of rising petroleum prices and a large middle class
population in India.
h) Correct knowledge of business environment helps an organisation to identify those threats
which may adversely affect its operations.
6. Name the five dimensions of business environment which are commonly referred as SLEPT
S
L
E
 P
T

7. Identify the dimensions of business environment from following statements:

1. Equal Pay for equal work for male and female workers
2. TThe court passed an order to seal the manufacturing unit of the company as
it was dumping its untreated poisonous waste on the river bank which has
created many health problems for the people.
3. A situation of political unrest erodes confidence of the investors and
thereby, makes it difficult for the enterprises to function smoothly.
4. An Indian car company launched a car in Germany under the brand name
‘Soft Mist’. But after a short while the car had to be withdrawn despite its
outstanding features and reasonable price. After a lot of research it was
found that the lack of demand for the car was because of its brand name,
as the word ‘mist’ meant cow dung in the local language.
5 The government has announced sweeping changes in FDI policy, such as
opening up the airline business to 100% ownership and relaxing rules for
single brand retail.
6. Demand of sweet increases on various occasions in India like Diwali ,
Bhai Dhuj etc.
7. The Government restricted the use of LPG cylinders to only nine per
family per year
8. 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
20 times as long as a Standard bulb

8. Name three economic reforms commonly known as LPG

9. Identify the economic reforms from following statement and write L/P/G against the points given:

1. Giving greater role to the private sector in the nation building process and a
reduced role to the public sector
2. Encourage foreign private participation in industrial development
3. liberalising the Indian business and industry from all unnecessary controls and
restrictions
4. The integration of the various economies of the world leading towards the
emergence of a cohesive global economy.
5. Setting up of BIFR to revive sick units in public sector enterprises suffering
losses.
 6. Freedom in deciding the scale of business
7 Disinvestment in many Public Sector undertaking
8. Removals of restriction on movements of goods and service
9 Export Promotion through rationalization of tariff structure
10 No restriction on expansion and contraction of business activities
11 Govt. of India allowed oil marketing public sector undertaking to fix their own
price for petrol and diesel.
12 It signalled the end of the licence-permit-quota raj.
13. Simplifying procedures for imports and experts
14. Dilution of Government ownership beyond 51 percent, it would result in
transfer of ownership and management of the public enterprise to the private
sector.

10. Identify the points of impact of government policy changes in business and industry from
following statements:
a) Today firms produce those goods & services which are required by the customers but earlier
they use to produce goods without knowing the needs of customers
b) The budgetary support given by the government to the public sector is reducing
c) Indian firms have to compete with Multinational companies
d) The changing market conditions of today requires people with higher competence and
greater commitment
e) Now customers are more aware and they keep maximum information of the market as the
result of which now market is customer/buyer oriented
f) Change in the various components of business environment has made it necessary for the
business firms to modify their policies & operations from time to time.
g) Increased competition forces the firms to develop and adopt new technologies to survive
and grow in the market.

11. Identify the points of Managerial responses to changes in Business Environment to its related
statement:
1 Multinationals are also entering the core sectors of the Indian
economy through joint ventures

2 Reliance is now also in the business of communications, retail

chains etc. Likewise, they are bold enough to diversify into other
nations too if needed

3 Heavy expenditure was incurred on launching of Korean brands

such as Hyundai, LG, Samsung, etc. Indian companies are also
doing likewise.
4 Mergers between ACC Gujarat, Ambuja Cement, Hindustan
Aluminum Co and Indian Aluminum Co to gain market
dominance, market entry, expand product range and obtain core
competencies ,
5 Use of latest technology has become the slogan of the successful
companies

6 The starting salary of engineering and management graduated

have risen significantly

12. The Government of India, made an announcement of Demonetization

10. Demonistisation on _______________
(date & year)

13. The objectives of Demonitisation

11 Demonetization are:
(a)
(b)
(c)

14. What is imapact of Demonetization

12 Demonitisation on following (Increase ,decrease or no effect)
(a)Public wealth (b) Private wealth
(c) Real estate (d) Tax collection
(e) Digitisation (f) Interest rates

15. Features of Demonetization

13 Demonitisation
(a)
(b)
(c)
(d)