BUSINESS STUDIES

CLASS: - XII
WORKSHEET
CHAPTER: BUSINESS ENVIRONMENT

MCQ/OBJECTIVE QUESTIONS:
1. Which of the following does not characterise the business environment?
(a) Uncertainty (b) Employees
(c) Relativity (d) Complexity

2. Which of the following best indicates the importance of business

environment?
(a) Identification (b) Improvement in performance
(c) Coping with rapid changes (d) All of them

3. Which of the following is an example of social environment?

(a) Money supply in the economy (b) Consumer Protection Act
(c) The Constitution of the country (d) Composition of family

4. Liberalisation means
(a) Integration among economies
(b) Reduced government controls and restrictions
(c) Policy of planned disinvestments
(d) None of them

5. Which of the following does not explain the impact of Government policy
changes on business and industry?
(a) More demanding customers (b) Increasing competition
(c) Change in agricultural prices (d) Market orientation

6. Business environment is a group of ________ powers.

(a) Special (b) General
(c) Internal (d) Special and General

7. Which factor is not included in Macro Environment?

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(a) Economic Environment (b) Competitors

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 (c) Social Environment (d) Political Environment

8. Which factor is not included in Internal Environment?

(a) Objective (b) Policies
(c) Public (d) Production-Method

9. The entry of the multinational companies in large numbers in the Indian

market has created ________ .(a) Huge Demand (b) Huge Supply
(c) Tough Competition (d) Huge Demand and Supply

10. Reducing the role of Public Sector and increasing the role of Private Sector
falls under ________ .
(a) Liberalisation (b) Privatisation
(c) Liberalisation and Privatisation (d) Globalisation

11. Under ________ the Reserve Bank keeps control on the money supply in
order to achieve the objectives of the general economic policy.
(a) Fiscal Policy (b) Monetary Policy
(c) Trade Policy (d) Industrial Policy

12. The income and expenditure policy of the government is called ________ .
(a) Fiscal Policy (b) Industrial Policy
(c) Trade Policy (d) Monetary Reforms

13. In all the countries there is a free-flow of goods and services under which of
the following does it come?
(a) Liberalisation (b) Privatisation
(c) Liberalisation and Privatisation (d) Globalisation

14. Which of the following deals with the process of simplification of Import-
Export?
(a) Liberalisation (b) Privatisation
(c) Liberalisation and Privatisation (d) Globalisation

15. With the introduction of Photostat Machines in the market, the carbon
paper industry was adversely affected.
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Which component of environment was responsible for it?

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 (a) Economic (b) Political
(c) Technical (d) All the above

SHORT ANSWER TYPE QUESTIONS (3/4 MARKS)

1. Identify the nature of business environment in the following cases –
a) Reliance Company recycled the plastic bottles to manufacture the polyester
fabric.
b) Even with launch of Android operating system for mobiles, Nokia stuck to its
old Sembilan models which resulted in fall in Nokia Sales.
c) Samsung converted its mobile phone technology immediately after Android
Operating technology was launched.
d) The changes in government policy for imports from china have forced Sell
Well Ltd. To import medical devices from Taiwan.

2. Identify the dimension of business environment in the following cases –

a) Replacing old machinery with new one to meet the requirements of pollution
control regulations.
b) Importing machinery from Japan to install automatic production system
c) HCL has opened various institutions to provide education to lesser privileged
children.
d) Various foreign companies are planning to establish business in India because
the government has allowed 100% foreign direct investment (FDI) in retail
trade.

3. 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)

4. “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.
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the products have no defects and the process through which the product is
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 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.

5. 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.

6. 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 behavioursOf superiors was very good towards
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their subordinates. Beni was very happy in this organization, but due to long
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 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 marks)
7. . 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.

8. In an environment of rising petroleum prices and a large middle class

population in India, KV Motors Ltd. recognized the need for small cars in India. It
created a product far superior than their competitors not only in terms of
quality but also in terms of overall driving experience. It soon became the
leader in the small car market. As the Indian government was encouraging
foreign investment, MNCs having a big name in car manufacturing entered the
Indian market. KV Motors further expanded its service network and quality
creating an entry barrier for the competitors. It depicted its strengths through
various brand building activities. As a result, the market share of KV Motors is
refusing to go down in spite of all major automakers as its competitors.
(a) Identify the economic reforms highlighted in the above case.
(b) Quoting the lines, explain any two points of importance of Business
Environment being highlighted in the above case

9. Mahinder Agro Ltd. started a new venture for distribution of harmful and
chemical free fertilizers vegetables. They conducted a survey to find out
consumer preferences for such vegetables. They found that most of the
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consumers were concerned about the harmful chemicals being used in growing
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 the vegetables. They found out that 90% of the households were searching for
alternatives. The company contacted a group of agricultural experts to lay down
the procedure for growing the vegetables by the farmers. Theydecided to train
the farmers in new technology to grow chemical free vegetables according to
new innovative methods. The experts also suggested soil management
techniques through which farmers would be able to create an abundant and
lasting harvest. Identify and explain the two dimensions of business
environment highlighted in the above para.

10. 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.

LONG ANSWER TYPE QUESTIONS( 5/6 MARKS)

Q.1.The court passed an order that all schools must have water purifier for the
school children as Society in general is more concerned about quality of life.
Innovative techniques are being developed to manufacture water purifier at
competitive rates. 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.

Q. 2. The Court passed an order to ban polythene bags as The bags are creating
many environmental problems which affect the life of people in general. 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)
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 Q. 3. 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: Define the term ‘Business Environment’. Explain the terms
‘Threats’ and ‘Opportunities’ by quoting lines from the paragraph. (5 marks)

Q 4. 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.
Identify the relevant feature of business environment being discussed above.
Describe briefly any three points which highlight the importance of business
environment and its understanding by managers.(5marks)

Q. 5. 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.
State the importance of business environment highlighted quoting the line from
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the above case.

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 Identify any two dimensions of business environment mentioned in the above
case by quoting lines from it.(5 marks)

6. 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. (6
marks)

7. ‘Konark Ltd.’ is an electric goods manufacturing enterprises situated in

Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a
competing electronic goods manufacturing enterprise, ‘Nova Ltd.’ situated in
Mumbai. Both Konark’s and Nova’s operations are affected directly by the
investors, customers, competitors and suppliers, which are unique to their
respective locations. In addition to this, individual forms of this field are
affected indirectly by the factors like the money supply in the economy,
composition of the families, the technological changes, etc.
(a) Identify and state the feature of the concept discussed in the above
paragraph.
(b) Also, state any four points of importance of this concept.

8. India’s craft heritage continues because if its customs and traditions. Crafts
are used not only in the country by craftsmen in Rajasthan, Gujarat and Assam
but are also exported to USA, Germany, UK and France. The volume of exports
and imports give India an advantage in balance of payments and the much
needed foreign exchange reserves. The Prime Minister desires that the
handicraft industry should be expanded by linking it with technology.Focus
should be on changing the manufacturing process, ensuring durability and
adapting innovations.
Quoting the lines from the above para, explain four dimensions of the business
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environment.
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 9. 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.

10. 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
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 alignment of business operations with the business environment will result in
better performance.
(i) Identify and state the component of business environment highlighted in the
above Para.
(ii) State any two features of business environment as discussed by Professor
Mehta with Naman and Govind.
(iii) Also state two points of importance of business environment as stated by
Professor Mehta in the above
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