CLASS : XII

Business Environment
Q. 1. 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)

Q. 2. Just after declaration of Lok Sabha Elections 2014 results, the

Bombay stock exchange‟s price index (Sensex) rose by 1000 points in a day.
Identify the environmental factor which led to this rise giving reason. Also
explain any two other dimensions of business
environment. (5 marks)

Q. 3. The court passed an order that all schools must have water purifier for
the school children as

1. Society in general is more concerned about quality of life.

2. Innovative techniques are being developed to manufacture water
purifier at competitive rates.
3. 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. (5 marks)

Q. 4. „It is common now to see CD-ROM‟s, computerized information

kiosks, and Internet/Word Wide Web multimedia pages highlighting the
virtues of products.‟ Name the dimension of the business environme nt
highlighted by this stateme. (1 mark)

Q. 5. Which component of business environment requires that advertisements

of baby food must necessarily inform the potential buyers that mother‟s milk is
the best? (1 mark)

Q. 6. It is the process by which government control over the industry is

being loosened. Give the term to which this statement is trying to
indicate. (1 mark)

Q. 7. Due to entry of foreign firms, competition for Indian firms has

increased, especially in service industries. Name such service
industries. (1 mark)
Q. 8. The Court passed an order to ban polythene bags as

1. The bags are creating many environmental problems which affect the life
of people in general.
2. 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 paragraph. (5 marks)

Q. 9. The government of India is seriously thinking of allowing the oil -

marketing public sector undertaking to fix their own prices for petrol and
diesel. Which economic reform is the reason for this change in the
government‟s policy?

Q. 10. 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:

1. Define the term „Business Environment‟.

2. Explain the terms „Threats‟ and „Opportunities‟ by quoting lines from the
paragraph.

Q. 11. “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. the
products have no defects and the process through which the product is 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.

Q. 12. 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.
Q. 13. 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 behaviours of superiors 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 on 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 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. Identify any two values being communicated by the company to the
society in the above case. (4 marks)

Q. 14. 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.
4. State any one value which Nakul wants to communicate to the
society. (6 marks)

Q. 15. It is interesting to know that the menu items of the multinational food
chains are customized to suit the general palates of the local people in the
region. When McDonald‟s started its business in India in the year 1996, the
company went through a complete localization
strategy. McDonald‟s changed its product menu to accommodate the
vegetable burger given the large vegetarian population. It also altered its store
design and even reduced the product price by close to fifteen per
cent. Also, the “McAloo Tikki burger” is not available anywhere but in the Indian
outlets of McDonalds.
Identify the relevant feature of business environment being discussed
above.

Q. 16. 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.

1. Identify the relevant feature of business environment being discussed

above.
2. Describe briefly any three points which highlight the importance of
business environment and its understanding by managers.

Q. 17. 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.

1. State the importance of business environment highlighted quoting the line

from the above case.
2. Identify any two dimensions of business environment mentioned in the
above case by quoting lines from it.
3. State any two values which have been overlooked by the company?

(5 marks)

Q. 18. 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.
3. State any one value which the company wants to communicate to the
society.(4 marks)
Q. 19. Disco Ltd. manufactures fashionable and designer
clothes. Recently it finds that the demand for its products has been declining.
After market research it was discovered that fashion and tastes of the consumers
is changing at a fast pace. Customers‟ 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
decrease in demand of its products in the market.

A meeting was held in which managers from different functional levels heading
Production, Marketing, Finance, etc., for example, Chief Operating Officer, Chief
Finance Officer, Vice President (Marketing) 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
manufacture garments accordingly. It was also decided to increase expenditure
on advertising, after-sales services, etc.

1. Identify any two features of business environment by quoting the lines from
the above case.
2. At which level of management the meeting of managers of Disco Ltd. was
held?
3. Identify any two impact of government policy changes on business,
quoting lines from the above case.
4. State the importance of understanding of environment by business
managers in the light of the above
para. (6 Marks)

Q. 20. The organic food market in India is grow at 25 -30 per cent which reflects
a clear shift in consumer tastes and preferences. The current growth in the
organic food market is driven by multiplicity of factors like rising health
consciousness, changing lifestyles, increase in disposable income and growing
availability of organic food products in shopping malls, retail outlets and online.
In context of the above case:

1. Identify and explain the features of business environment being referred to

here.

2. By quoting phrases from the paragraph identify the various components

of general forces which have led to a growth in the organic food market.

Q. 21. Anurag, aspires to work with a socially and environmentally committed

company as he does not want to work just for monetary benefits but also the
brand value of the company he works for in the society matters a lot to him.
Therefore, he has joined Cerebra Integrated Technologies a Bengaluru-based
Infotech company. The company has built India‟s largest e-waste recycling plant.
The company strives to be one of the leading players in this business which has
huge potential not only in terms of generating huge revenues and profits but also
wants to contribute to the environment issues that have become crucial
worldwide. The company sees big business in the mountains of e -waste in
Bengaluru which produces 2,00,000 tonnes of e-waste a year. The company plans
to make its millions by extracting metals such as gold and platinum from the e-
waste piling up in the city. As a mobile phone, for example, is made up of a
combination of rare earth and precious metals: it contains 250 mg of silver, 24
mg of gold and nine mg of palladium while a laptop has 1,000 mg of silver, 220
mg of gold and 500 grams of copper.

To start the business, the company has obtained a licence from KSPCB
(Karnataka State Pollution Control Board).
In context of the above case:

1. Identify the various dimensions of business environment being

referred to by quoting lines form the paragraph.
2. List any two values which the company wants to convey to the society.

Q. 22. 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.
 Q. 23. Continuous and comprehensive evaluation is a process of
assessment, mandated by the right to Education Act, of India. This
approach to assessment has been introduced by state governments in
India, as well as by the Central Board of Secondary Education in
India. With the introduction of (CCE) system in education there is greater
focus on project based learning. As a result, besides time and effort the
students are willing to invest money to enhance the visual appeal of their
project files so as to score higher marks. In order to cash on the opportunity
Rishabh has started a small business unit to manufacture different kinds of
decorative materials for the project files. He has employed a team of four
creative designers for developing the innovative material with the help of latest
technology. However, he has a prejudice against women and therefore pays
less salary to them as compared to the male staff for equal work.

In the context of the above case:

1. Name any two functions of management that Rishabh will have to

perform in order to manage his business successfully.
2. Name and explain the principle of management which is being violated by
Rishabh.
3. Identify the related dimensions of the business environment.

Q. 24. Government of India is seriously thinking to allow oil marketing

public sector, undertaking to fix their own price for petrol and diesel.

1. Name the economic reform related to this decision of government.

2. Name other two reforms recommended in new economic policy.

Q. 25. Recently many companies have planned for significant investment in

organizes retailing in India. Various factors which have encouraged companies
to take these decisions are customer income is increasing, rise in standard of
living of people. People are ready to pay high price for quality goods,
government policy of liberalization regarding MNC entry and FDI, etc.

1. Explain briefly changes in business environment under different heads that

have facilitated the companies‟ decision to plan significant investment in
retailing.
2. What has been the impact of these changes with regards to
globalization and privatization?

Q. 26. Two big banner movies were scheduled to be released on the same date.
On the last movement release of one of the movies has to be postponed due to
opposition of a group of people due to some unethical contents related to their
religion was shown in the that movie. The other movie released on time and
made huge profit as there was no competition and movie which was postponed
suffered loss.

1. Which feature of business environment is highlighted here.

2. Identify the dimension of business environment, which delayed the
release of movie.

Q. 27. After winning the election, Prime Minister Mr. Narender Modi launched a
Campaign of „Swachh Brarat‟ and invited various celebrities to be a part of this
Abhiyaan. This spread awareness among the people in society and in general,
people started becoming more careful and aware about the cleanliness around
their area. To continue its impact, a new service tax for Swachh Bharat was also
started. The government is planning to import new and better technology to
adopt new methods of treating the garbage and waste.

State the various dimension of business environment mentioned in the

above para quoting the lines from the above para.

Q. 28. Even after opening up of Indian Economy, foreign companies found it

extremely difficult to cut through the bureaucratic and red tapism in government
offices. This discourages them from investing in India.
Identify the dimension of environment mention in above para.

Q. 29. Just after the declaration of Lok Sabha Elections in 2014, the
Bombay Stock Exchange Index rose by 1000 points.
Identify the dimension of business environment.

Q. 30. „Mamta Rice Food Ltd‟ is a well know rice producing company. The sales
have been falling down from the beginning of the year. The managing director
MR. Bhuvan is worried about this situation. With a view to find out the solution
of this problem he made a team to find but the reasons for downfall of sales. The
team conducted the survey and gave following four reasons for the downfall of
company‟s sale.

1. On account of increase in export duty made by the government, the

foreign demand has gone down.
2. Due to availability of other eatable substitute the taste of people is
diverted from rice.
3. The competitor‟s imported new technology machine and are producing
better quality rice.
4. Due to strain with neighbouring country‟s government and our
country‟s government export is effected.
Identify the dimension of Business Environment discussed in the above
case.
Q. 31. With changes in the consumption habits of people, Neelesh, who was
running a sweet shop, shifted to the chocolate business. On the eve of Diwali, he
offered chocolates in attractive packages at reasonable prices. He anticipated
huge demand and created a website chocolove.com for taking orders online. He
got a lot of orders online and earned huge profits by selling the chocolate.

Identify and explain the dimensions of business environment discussed in the

above case.
Q. 32. A recent rate cut in the interest on loans announced by the banks
encouraged Amit, a science student of Progressive School, to take a loan from
State Bank of India to experiment and develop cars to be powered by fuel
produced form garbage. He developed such a car and exhibited it in the Science
Fair organized by the Directorate of Education. He was awarded the first prize
for his invention.
Identify and explain the dimensions of business environment discussed in the
above case.
Q. 33. „Accent electronics Ltd.‟ was operating its business in
Malaysia. The company started exporting its products to India when the Prime
Minister announced relaxation in import duties on electronic items. The
company appointed retailers in India who had direct online links with the
suppliers to replenish stocks when needed.
Identify and explain the dimensions of business environment discussed in the
above case.
Q. 34. 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 as:

1. Its consumptions injurious to health.

2. People are becoming more conscious about health and fitness. This
indicates the government‟s attitude towards this business.

Identify the business environment under three different dimensions by

quoting from above paragraph.

Q. 35. Make in India is an initiative launched by the Government of India to

encourage national and multinational companies to manufacture their products
in India. It focuses on job creation and skill enhancement and is in twenty five
sectors of the economy. Under the initiative, brochures on these sectors and a
web portal were released. The initiative aims at high quality standards and
minimizing the impact on the environment. It also seeks to attract foreign capital
investment in India.
In context of the above case:

1. Identify the various dimensions of business environment being

referred to by quoting lines from the paragraph.
2. List any two values which the Government of India wants to convey
through this initiative.

Q. 36. India‟s retail sector has been undergoing structural changes for the last
two decades. On one hand, the „mall culture‟ has gradually become a way of
life, especially in the metros and mini-metros. On the other hand, there is
accelerated growth in e-business as customers also prefer to buy products and
services via the Interest, telephone and television. However, operating in either
of the segments is marked by the presence of strong competitors.

Identify the components of specific forces and general forces being

discussed in the above paragraph.

Q. 37. To mark the celebrations of International Family Day on 16 t h may 2016,

Kurkure flagged off India‟s first family food train – Kurkure Family Express at
New Delhi. The train took forty families ona fun culinary experience of a lifetime
through an eight-day journey across fourteen states in India. A whole lot of fun
activities were hosted on the train by the travel and food anchors Rocky and
mayor.
The families were selected through an online campaign, „Chatpata family
photos‟. The contest attracted approximately 1,000 entries, of which 40
entries that gelled with the brand‟s image were selected.
The core idea of the campaign was to bring families from across India together
over a journey like this. As in today‟s time, everyone is busy with their life the
family members may feel disconnected with each other.
Identify and explain the various dimensions of business environment being
referred to the in the above case by quoting lines from the paragraph.
Q. 38. In the year 2016,the State Government of Kerala had made it mandatory
for anganwadis hostels and canteens in educational institutions to secure the
Food Safety and standards Authority of India (FSSAI) licence to ensure food
safety. As the educational institutions also get categorized as food business
operators in the event of the annual turnover of the hostels, they run exceeding
Rs. 12 lakh per annum.
In context of the above case:

1. Identify and explain the various dimensions of business environment

being referred to here.
 2. List any two values which the State Government of Kerala wants to
convey through this initiative.

Q. 39. Postage stamps have been unveiled to commemorate 140 years of

existence of the country‟s first stock exchange the Bombay Stock
Exchange (BSE). The setting up of BSE is considered to be the greatest
revolution that took place in the financial markets in India as it acts as a key
driver for economic growth of a country. This is due to the fact that there
exists a strong correlation between economic growth and capital
accumulation.
In the context of the above case:

1. Identify the dimension of business environment of India being referred here.

2. State any three factors which broadly affected the dimension of business
environment of India as identified in part (a) of the question.

Q. 40. In May 2016, the government had launched a web -based application
which will provide as opportunity to all the industries dealing in hazardous waste
to apply online and get online permissions for import and export of certain
categories of waste, which is for reuse, recycling or recovery while it will also
help authorities in web-based processing, generation and grant of various types
of permissions to the entrepreneurs and industries. It is also aimed at
implementing the concept of paperless and green office and provide information
regarding number authorizations or consent order granted by the State Pollution
control Boards (SPCBs).
Identify the various dimensions of business environment being referred in the
above case.
Q. 41. 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.