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Class 12 Business Studies Questions Solutions for Chapter 3 Business Environment - Bzzii
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Short Answer Type Questions
1. What do you understand by business environment?
Answer:Business Environment is a Environment where all internal and external factors are includes such as supply and demand, customers needs and expectations, management, suppliers, owners, government activities social trends, market trends, economic changes, etc.
2.Why it is important for business enterprises to understand their environment? (Explain briefly.)
Answer:It is very important for business enterprises to understand their environment.Because to survive in a particular environment, it necessary to learn about that particular area or environment.
In Business their is many factors to understand their environment because of the following reasons :
(i) Help in identifying opportunities and getting the first mover advantage
It enables the Firm to identify opportunities and getting the first Mover advantage: Environment provides numerous opportunities for business. Early identification of opportunities helps an enterprise to use it before instead of losing them to competitors.
(ii) Helps in identifying threats and accepting early warning signal
It helps the Firm to identify threats and early Warning Signals. Environmental awareness can help managers to identify various threats on time.
(iii) Helps in tapping useful resources
It helps in tapping useful Resources Environment is a source for the various resources for running a business. To engage in any type of activity, a business enterprise assembles various resources called inputs. This can be done better by understanding what the environment has to offer.
(iv) Helps in copping with rapid changes
It helps in coping with rapid changes. All types of enterprises are facing increasingly dynamic environment. In order to effectively cope with these significant changes, managers must understand and examine the environment and develop suitable courses of action.
3. Mention the various dimensions of business environment.
Answer:There are 5 dimensions to business environment. These are economic, social, legal, political and technological.
Economic Environment: Economic Environment includes the environment of the business, these means the environment covers whole business.All Business or Companies are run their business for economic activities such as money.
Social Environment: All Businesses are run in our society, Without a group of humans or society a Business doesn’t exist . Social Environment includes social forces like customs and traditions, values, social trends and society's expectations from business.
legal Environment: Legal environment includes various Rules passed by the Government administrative, for the help of consumers .
political Environment: Political Environment means the order and rules that taken by present Government for business, which potentially affect the activities of any business or company on a domestic or at the global level.
technological Environment: 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.
Answer:(a)Liberalisation: Liberalisation means liberalised of various government restrictions in the areas of social and economic policies. liberalisation refers to lessening of government regulations and restrictions for greater participation by private entities.
(b)Privatisation :The transfer of ownership, property or business from the government to the private sector is call privatisation. Government do privatisation in country because of a decreases their losses of money thought the taxes by public sector, also government do it for country’s development by public sectors development on business.
(c) Globalisation: Globalisation means the speedup of movements and exchanges of human beings, goods, and services, capital, technologies or cultural practices all over the planet.In Globalisation a country connect his business economy with all over the world.
5. Briefly discuss the impact of Government policy changes on business and industry.
Answer: Government Policy on Business and Entrepreneurship Government policy on finance, privatisation and globalisation has had a significant impact on business and industrial enterprises.
As a result of the change in government policy, the Indian corporate sector is facing a number of challenges.
(1) Deaf competition: Changes in the rules of industrial permitting system and increased competition from foreign companies.
(2) High Demand Customers: Existing customers, as well as well-known customers, want to purchase a wide range of high quality products or services from among a large number of customers.
(3) Rapid change in technology environment: Changes in government policy lead to increased competition.
For this, the companies are adopting new ways of development in order to stay afloat in the market.
Such rapid changes in the technological environment have created severe challenges for micro-enterprises.
(4) The problem of lack of human resource development: For a long time now, Indian institutions have been suffering from inadequately trained staff. With the increase in competition due to the change in government policy, there is a need for more qualified and highly competitive people in the new market environment.Therefore, there is a lack of human resource development.
Long answer type questions
1. How would you characterise business environment? Explain,with examples,the different between general and specific environment.
Answer:Business environment means that factors that influences many enterprises at the same time. It consists of social ,political, economic, legal and technological factors such as taste the consumers, increased competition , etc. which affect the working of a business.
The features of the business environment are explained below:
(i) Business environment includes all the forces, factors that directly or Indirectly affect the Business.
(ii) The business environment is a dynamic and fixable environment, where in future it’s can change continuously.
(iii) Nobody can control business environment it’s change depends on the behaviours of consumer or customer.
Differences between general and specific environment discuss in below:
Base
Specific environment
General environment
Meaning
Specific environment refers to those external forces that affect an organisation directly.
General environment refers to those external forces which affect all the organisations.
Example
Investments, Competitors etc.
Government policies, seasons etc.
Forces
investors, customers, competitors and suppliers
economic, social, political, legal and technological conditions
2. How would you argue that the success of a business enterprise is significantly influenced by its environment.Answer:The success of a business enterprise is significantly influenced by its environment because of various reasons, because a business environment helps a manager to choice right direction for his business in various condition while the environment change.if without having any knowledge or idea about that particular environment it’s much difficult to led a business firm to survive that particular environment.
The following points highlight the importance of the environment for the success of a business organisation:
(i) Business environment helps to identify the best opportunities and getting the first-mover advantage. It is better to analyse the market and grab the opportunity rather than losing it to the competitors.
(ii) Business environment also helps in the identification of thread which may have a negative effect on the functioning of the Enterprise.
(iii)The environment is constantly changing in terms of technology, government policies, taste and preference of the consumer, etc. The manager of the firm must analyse the business environment to cope up with the changes.
3. Explain, with examples, the various dimensions of business environment.
Answer:There are 5 dimensions to business environment. These are economic, social, legal, political and technological.
Economic Environment: Economic Environment includes the environment of the business, these means the environment covers whole business.All Business or Companies are run their business for economic activities such as money.
Example:A rise in the disposable income of people due to a decrease in tax rates in a country creates more demand for products.
Social Environment: All Businesses are run in our society, Without a group of humans or society a Business doesn’t exist . Social Environment includes social forces like customs and traditions, values, social trends and society expectations from business.
Example: In a festival like donteyrash when every on can buy products it’s like a tradition.
Legal Environment: Legal environment includes various Rules passed by the Government administrative, for the help of consumers .
Example:An export-import company in India has to comply with the rules under the EXIM policy and the foreign trade act 1992..
Political Environment: Political Environment means the order and rules that taken by present Government for business, which potentially affect the activities of any business or company on a domestic or at the global level.
Example:central government’s attitudes towards business, industry and employment, has attracted many national and international business entrepreneurs to invest in their country.
Technological Environment: 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.
Example:with technological innovations, it is now easier to book a cinema ticket through the online portal.
4. What economic changes were initiated by Government under the Industrial Policy, 1991?
Answer:Although unsuccessful attempts at liberalisation were made in 1966 and the early 1980's a more thorough liberalisation was initiated in 1991. The reform was prompted by a balance of payments crisis that had led to a severe recession. Liberalisation, Privatisation and Globalisation were the economic changes initiated by government under the industrial policy 1991.
(a) Liberalisation: The essential features of liberalisation were (i) It laid stress on freedom of business and industry from unnecessary controls and restrictions of the government (ii) Emphasis was laid on simplifying export and import procedures (iii) Restrictions on the movement of goods and services was removed.
(b) Privatisation: The essential features of privatisation were
(i) There was a significant reduction in the role of public sector enterprises for economic growth (ii) It laid stress on induction of private ownership, management and control in public sector. (iii) BIFR was established for rehabilitation of sick units (iv) Disinvestment of public sector took place at a significant rate
(c) Globalisation: The essential features of globalisation were (i) It laid stress on integration of domestic economies into a cohesive global economy.
(ii) The share of foreign equity participation was increased (iii) Licensing was abolished for imports.
5.What are teh essential features of (a)Liberalisation, (b)Privatisation, (c)Globalisation?
Answer:
(a) Liberalisation: Liberalisation means liberalised of various government restrictions in the areas of social and economic policies. liberalisation refers to lessening of government regulations and restrictions for greater participation by private entities. Liberalisation of industries in India took the following manner:
(i) Abolition of licenses (ii) Removal of Trade Restrictions (iii) Encouragement to Foreign Direct Investment (FDI)
(b) Privatisation:The transfer of ownership, property or business from the government to the private sector is call privatisation. Government do privatisation in country because of a decreases their losses of money thought the taxes by public sector, also government do it for country’s development by public sectors development on business.In India, privatisation was followed in the following manner:
(i) Disinvestment (ii) Reducing the Role of Public Sector (iii) Establishing Board of Industrial and Financial Reconstruction
(c) Globalisation:Globalisation means the speedup of movements and exchanges of human beings, goods, and services, capital, technologies or cultural practices all over the planet.In Globalisation a country connect his business economy with all over the world.In India, the following policies were followed with regard to globalisation:
(i) Reducing the Export Duty and Import Duty (ii) Encouragement to Foreign Capital Investment (iii) Removal on Trade Restriction
Multiple Choice Questions
1. Which of the following does not characterise the business environment?
answer source Question Read the source given below and answer the questions that follows: Source : The Movement in the Towns The movement started with middle-class participation in the cities. Thousands of students left government-controlled schools and colleges, headmasters and teachers resigned, and lawyers gave up their legal practices. The council elections were boycotted in most provinces except Madras, where the Justice Party, the party of the non-Brahmans, felt that entering the council was one way of gaining some power–something that usually only Brahmans had access to. The effects of non-cooperation on the economic front were more dramatic. Foreign goods were boycotted, liquor shops picketed, and foreign cloth burnt in huge bonfires. The import of foreign cloth halved between 1921 and 1922, its value dropping from Rs. 102 crore to Rs. 57 crore. In many places merchants and traders refused to trade in foreign goods or finance foreign trade. As the boycott movement spread...
A fraction becomes `9/11`, if 2 is added to both the numerator and denominator. If 3 is added to both the numerator and the denominator, it becomes `5/6`. Find the fraction. SOLUTION Let Numerator be x & Denominator be y So, Fraction is = `x/y` Given that, If 2 is added to both the numerators and denominator, fraction becomes `9/11` `"Numerators + 2"/"Denominator + 2"`= `9/11` `"x+ 2"/"y + 2"`= `9/11` 11 (`x + 2`) = 9 (`y + 2`) 11`x` + 22 = 9`y` + 18 11`x` - 9`y` = 11 - 22 11`x` - 9`y` = -4 .......(1) Also, Given that if 3 is added to both the numerator and the denominator, fraction become `5/6` `"Numerators + 3"/"Denominator + 3"`= `5/6` `"x+ 3"/"y + 3"`= `5/6` 6 (`x + 3`) = 5 (`y + 3`) 6`x` + 18 = 5`y` + 15 6`x` - 5`y` = 15 - 18 6`x` - 5`y` = - 3 .......(2) Hence, our equations are 11`x` - 9`y` = -4 .......(1) 6`x` - 5`y` = - 3 .......(2) From equation (1...
Chapter 3 Recording of Transactions Short Answer 01 State the three fundamental steps in the accounting process. SOLUTION 02 Why is the evidence provided by source documents important to accounting? SOLUTION 03 Should a transaction be first recorded in a journal or ledger? Why? SOLUTION 04 Are debits or credits listed first in journal entries? Are debits or credits indented? SOLUTION 05 Why are some accounting systems called double accounting systems? SOLUTION 06 Give a specimen of an account. SOLUTION 07 Why are the rules of debit and credit same for both liability and capital? SOLUTION 08 What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts? SOLUTION 09 What entry (debit or credit) would you make to: (a) increase revenue (b)...
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