Question 1:

‘The first masters’ is a leading advertising company in its industry. Recently they had a
meeting in which all the reasons which were outside the control of the organisation were
discussed. The organisation wanted to maintain its supremacy in the market. They decided to
break the meeting into two parts. In the first part customers, competitors, suppliers, etc. were
discussed where as in the second part the political, economic, social conditions in the
country were discussed. It was concluded that company was doing extremely well in the
domestic market and the client base was expanding. However when the company’s
performance in foreign markets was evaluated it was found that conditions were different in
different countries so the strategies adopted would have to be different. After the meeting the
company was looking forward to making new gains.
Which features of Business Environment have been highlighted in the above case? Also
identify the lines.
Answer:
The features of Business Environment which have been highlighted are:

Totality of external forces. Recently they had a meeting in which all the reasons which were
outside the control of the organisation were discussed.
Specific and general forces. In the first part customers, competitors, suppliers, etc. were
discussed where as in the second part the political, economic, social conditions in the
country were discussed.
Relativity. However when the company’s performance in foreign markets was evaluated it
was found that conditions were different in different countries so the strategies adopted
would have to be different.
Question 2:
Bright Services is a taxi service provider. The company is targeting a revenue of 50 crore
rupees this year. However with the passage of time it has found entrance of new service
providers in the market which was not expected at one stage of time. It has a good team of
technicians, drivers, software providers, etc. The company has decided to make it adaptable
to such continuously changing circumstances. It knows that if it has to expand in new
countries it will have to learn the basic differentiating factors like traffic rules, technological
aspects, etc. Thus it understands that conditions are different in different countries.
Which features of Business Environment are discussed in the above case? Which force is
discussed above?
Answer:
The various features of Business Environment which are discussed above are: Business
studies e-booksBusiness management trainingTechnology implementation services
Uncertainty. However with the passage of time it has found entrance of new service
providers in the market which was not expected at one stage of time.
Dynamic nature. The company has decided to make it adaptable to such continuously
changing circumstances.
Relativity. Thus it understands that conditions are different in different countries.
The type of force which is discussed above is General Force —Legal (Traffic rules),
Technological (Technical aspects).
Question 3:
ABCDEF Ltd. decided to start its new venture in Delhi. For this they needed to understand
the Business Environment of the area. It was realised by the
company that the Business Environment of Delhi was very hard to understand unless and
until it was divided into different business dimensions like legal, political, economic, social
and technological conditions. After understanding the business situations the company
started to study the close links between different elements of the Business Environment.
They
gave a proper shape to their research and the business got started with full force. Later they
realised that the products they were selling in Delhi were more fit for the European culture
and decided to start a new branch in Belgium where the demand of their products was very
high from the first day. The company came to be recognized and in few years became a
global brand. The reason for its success in different countries was the adaptability’ it showed
in meeting the changing environment. The company kept track of all happenings and did a
periodic survey of the choices of the customers. It recognized that there was no surety in the
nature of market and it was very unpredictable.
Which features of Business Environment have been highlighted in the above case? Identify
the lines which highlight these features.
Answer:
The various features of Business Environment which are highlighted in the above case are:

Complexity. It was realised by the company that the Business Environment of Delhi was
very hard to understand unless and until it was divided into different business dimensions
like legal, political, economic, social and technological conditions. As we can see it is very
difficult to.understand the business environment unless it is broken into its dimensions.
Interrelatedness. After understanding the business situations the company started to study
the close links between different elements of the Business Environment.
 Relativity. Later they realised that the products they were selling in Delhi were more fit for
the European culture and decided to start a new branch in Belgium where the demand of
their products was very high from the first day.
Dynamic nature. The reason for its success in different countries was the adaptability it
showed in meeting the changing environment.
Technology implementation servicesBusiness studies e-books
Question 4:
A company is a component of market. It utilises various raw materials, labour force, human
resources, power, water, other sources, etc. When all these resources are utilized output is
produced. But before output is produced the input has to go through various operations.
These operations convert the raw materials into final products which are then sold in the
market.
In the above paragraph which importance of Business Environment is highlighted?
Answer:
The importance of business environment which is highlighted above is — Helps in tapping
useful resources.

Question 5:
The market is flooded with better quality toys of foreign origin. The result is fall in revenue
of the indigenous or local companies as their products are much interior and are also costlier
in less demand in the market.
Which dimension of Business Environment can be seen here affecting the local companies’
revenue? 1
Answer:
The dimension of Business Environment which is affecting the indigenous companies is
Technological Environment. Since the products are technologically advanced they are
replacing the locally made inferior products.

Question 6:
The sale of sarees increases in the months of the year when a large number of marriages take
place in India. The saree manufacturing companies make special plans of sale for these
months.
Which dimension of business environment comes into picture here?
Answer:
The dimension of business environment which is covered here is the “Social” dimension of
business environment as marriages come under the social dimension.

Question 7:
We can expect high sale of sarees in India but we can’t expect the same in Which feature of
business environment is discussed in the previous line?
Answer:
The feature of business environment which is discussed above is “Relativity” as the business
environment varies from place to place. The choice of people, their culture and purchasing
capacity are different in different areas.

Question 8:
Advertisements of a protein supplement must inform the potential buyer that the product if
taken beyond a given dose can be harmful to the diabetics.
Which dimension of business environment is highlighted here?
Answer:
The dimension of business environment which is highlighted here is the “Legal”
environment as it comes under the legal laws to clearly state the necessary information as
directed by the government.

Question 9:
Long Drive Manufacturers is a leading vehicle manufacturing company. It claims that it can
create a fuel in its laboratory which can run the newly designed car. The company is ready to
provide this fuel to its customers for free for one year provided they buy the car.
Which dimension of business environment is affected here by the company’s innovative
solution? 1
Answer:
The dimension of business which is affected here by the company’s innovation is the
“Technological” environment.

Question 10:
Identify the various dimensions of business environment:
With the election of a new government the sensex drops by 748 points.
A particular channel refrains from showing the advertisement of a particular product as it is
banned by the government.
A software is in high demand among the industrial buyers as it can connect all the branches
of a company as a single integrated unit.
At the time of holi a large number of manufacturing firms get involved in making colours
which are used in the celebration of this colourful festival.
It is not advisable to open a luxury car showroom in the middle of an economy where per
capita income is very low.
Answer:
The various dimensions of business environment highlighted above are:

Political environment.
Legal environment.
Technological environment.
Social environment.
Economic environment.
Question 11:
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 from garbage. He developed such a car and
exhibited it in the Science Fair organized by Directorate of Education. He was awarded first
prize for his invention.
Identify and explain the dimensions of business environment discussed in the above case.
Answer:
Following are the dimensions of business environment discussed in the above para:

Economic Environment. Economic dimension of business environment includes various

economic factors like inflation, interest rates, currency value, income of people, etc. Both
short and long term interest rates affect the demand for various goods and services in the
economy. Lower interest rates lead to higher demand while higher interest rates lead to less
spending by consumers leading to reduced demand.
Technological Environment. Scientific improvements and innovations are included in the
technological dimension of business environment. It provides new ways and methods of
producing goods and services. For example, technological developments in the field of
computers and information technology have changed the ways in which companies promote
their goods and services.
Question 12:
With change in the consumption habits of people, Neelesh, who was running a sweets shop
shifted to chocolate business. On the eve of Diwali he offered chacolates in attractive
packages at reasonable prices. He anticipated huge demand and created a website
chocolove.com for taking orders online. He got lot of orders online and earned huge profit by
selling chocolates.
Identify and explain the dimensions of business environment discussed in the above case.
Answer:
Following dimensions of business environment are discussed in the given para:

Social Environment. Social Environment consists of attitudes, beliefs, desires, customs and
traditions, level of education, composition of working population, culture, religion, values,
etc. Values refer to concepts which are held by the society in high esteem and traditions
include social practices that have been followed by the society for a long period of time.
Technological Environment. Scientific improvement and innovations are included in
the technological dimension of business environment. It provides new ways and methods of
producing goods and services. For example, technological developments in the field of
computers and information technology have changed the ways in which companies promote
their goods and services.
Question 13:
“World Softwares” is a software giant. It has many branches throughout the world. The
company knows that it has great opportunities in its path. When it it was limited only to its
native country. With the passage of time within 20 years the economies of various countries
have integrated. This has come as a great advantage to this company which has expanded. In
many of the countries where it has its, branches the control of government in the public
sector enterprises has diluted leading to more control in the hands of the private sector. One
of the major reasons for the success of the company has been the role of the initiator the
company has played as it was the first company of its kind to enter the market.
Identify the two important concepts highlighted above. Which type of advantage has been
indicated in the last line of the above case?
Answer:
Globalisation. With the passage of time within 20 years the economies of various countries
have integrated.

Disinvestment. In many of the countries where it has its branches the control of government
in the public sector enterprises has diluted leading to more control in the hands of the private
sector.
First mover advantage. The role of the initiator the company has played as it was the first
company of its kind to enter the market.
Question 14:
Metlapp Networks and Technologies Ltd. is a leader in technology innovation in the United
States, creating products and solutions for connecting the world. It has a large research and
development team which invented the first smart watch, named as W-7. The watch besides
showing the time, also monitors few health parameters like heart beat, blood pressure etc.
While in search of markets abroad, the company found that in India, the reform process was
underway with the aim of accelerating the pace of economic growth. The company decided
to take advantage of simplified export procedure and removal of quantitative as well as tariff
restrictions in India.
It set up its office in Jamnagar with a view to capture the Indian market. In a short span of
time, the company emerged as a market leader. Success of the company athtected many
other players to enter the market. Competition resulted in reduction in prices, thereby
benefiting the customers.

In the above paragraph, two major concepts related to government policy have been
discussed. Identify and explain these concepts.
Also, explain briefly any three impacts of these concepts on Indian business and industry.
Answer:

The two major concepts related to government policy discussed in the given para are as
follows:
Liberalisation. Liberalisation means removing unnecessary control and restrictions over the
business. It refers to those government policies that promote economic growth by lessening
the restrictions and regulations placed on the business.
Globalisation. It is an economic reform that aims at integration of markets in the global
economy leading to the increased inter-connectedness of national economies. It simply
means the integration of the various economies of the world leading towards the emergence
of a cohesive global economy.
Three impacts of liberalisation and globalisation on Indian business.
 Increase in competition. In today’s Indian economy, competition has increased due to
liberalised imports and entry of MNCs (foreign Multinationals). Although, it is good for
consumers, but some of the Indian industrial units, particularly small-scale and medium scale
industries are facing problems.
More demanding customers. Customers are well informed and so they have become more
demanding. They have a wider choice and can now purchase better products and services.
Technological development. Increasing competition has forced the companies to develop
new technologies. New technologies make it possible to improve machines, production
process, products and services. The rapidly changing technological environment has created
tough challenges before small firms.
Necessity for change. Since Economic Reforms of 1991 market forces have been changing
rapidly. Therefore, business firms have to continuously modify their operations.
Need for developing human resources. The new market conditions require people with
higher qualifications, competence and greater commitment. Hence there is a need to train
and upgrade human resources.
Question 15:
The internet has taken the whole world by surprise. The government has also been lenient in
giving the online companies a chance to flourish in the changing business scenario.
Interneters Online is an entrepreneurial initiative by a group of young engineers. The
company has entered in the domain of providing products online. Many new firms have also
entered after seeing them enter this mode of business and many of these firms are foreign in
origin. The companies dealing in online business know that in today’s world customer has
many options. The customer is no more dependent on a single company for the product he
requires. This has empowered the customer who has more choices and the result is a
fragmented market. The firms selling with monopoly in the market are the stories of the past.
The products offered by the companies are going through different types of technological
changes. The companies are trying to give variety of products which are technologically
advanced. “Interneters Online” is a firm which is right now selling 200 products online.
Recently if tried to increase the number of products to be sold by 15 but it realised that many
of these products were not allowed by the government to be sold in their territory.
Identify three impacts of government policy changes on Business and Industry highlighted in
the above case. Also identify the dimension of business environment highlighted above.
Answer:
The three impacts of government policy changes on Business and Industry highlighted above
are:

Increasing Competition. Many new firms have also entered after seeing them enter this
mode of business and many of these firms are foreign in origin.
 More demanding customers. This has empowered the customer who has more choices and
the result is a fragmented market.
Rapidly changing technological environment. The companies are trying to give variety of
products which are technologically advanced.
The dimension of business environment which is highlighted above is Legal environment. It
realised that many of these products were not allowed by the government to be sold in their
territory.
Question 16:
The Indian companies after the year 1991 have especially paid attention to the need of
having a manpower which can adjust to the changing competitive environment. The new
market situations require employees with greater talent and higher level of competence.
In the above paragraph which one important impact of Government policy change on
business is highlighted?
Answer:
Need for developing human resource.

Question 17:
With the abolition of licensing requirements a company has decided to enter into a new
industry and the government’s support is making the movements of goods easier. The
company has lost its foothold in the previous industry in which it was once a leader. All this
happened because of the opposition of a project which the company had undertaken in a
village. The villagers started to gather and the incidence caught the attention of media. There
were protests and the result was the closure of the plant. The biggest competitor of the
company wanted to ensure that they gain from this situation. They started their vigorous
efforts to increase their business output. This company knows that all the inputs are the
resources from the outside environment and they have to be converted into successful
products. Five years back the company used to make products which used to suit its
production requirements. Now it has decided to manufacture products according to the
requirements of the potential customers. The product can only reach customers in the best
possible manner only if the company prepares itself. For this the company invests a lot in its
employees so that they can meet the best standards of providing services which suit the
customers. The revenue of the company can decline in the next few years. The reason for this
could be the different types of innovative practices involved by various competitors in
producing goods with the latest technology. For this the company will have to prepare itself.
Which economic reform is highlighted in the initial lines of the above case? Which
dimension of business is affected here in the initial lines of the passage? Which importance
of business environment is highlighted here? Name three different types of impacts of
government policy changes on business and industry you can find here.
Answer:
The economic reform which is highlighted in the initial lines of the above case is
Liberalisation. With the abolition of licensing requirements, the company has decided to
enter into a new industry and the government’s support is making the movements of goods
easier.
The dimension of business which is affected in the above lines is Political. There were
protests and the result was the closure of the plant.
The importance of business environment which is highlighted here is Tapping useful
resources. There were protests and the result was the closure of the plant.
Three different types of impacts of government policy changes on business and industry we
can find here are:

Market Orientation. Now it has decided to manufacture products according to the

requirements of the potential customers.
Need for developing human resource. For this the company invests a lot in its employees so
that they can meet the best standards of providing services which suit the customers.
Rapidly changing technological environment. The reason for this could be the different type
of innovative practices involved by various competitors in producing goods with the latest
technology.
Question 18:
It’s high time that the government should finalise the industrial and monetary policies. The
various economic indices like national income, per capita income, rate of savings and
investment, etc. should be taken care of while deciding any economic plans for future.
Which concept can be seen discussed in the above paragraph?
Answer:
The concept which has been discussed in the above paragraph is “Economic Environment”.

Question 19:
ABCDE Ltd. has opened a customized shoe business in 23 cities. The organisation has done
a lot of research on the nature of business environment in which it is doing business. The
market has fragmented as there are many players, brand loyalties of the customers keep on
changing, customers are more demanding and there is intense competition in the market.
Every week on Saturday the board of directors sits for a meeting and decides the future
course of action. They rely on their surveys and past performances of other companies to
achieve policy making and deciding future course of action. The company devotes its lot of
time in understanding the external environment. With all the research the company has
realised that the business environment does tend to have a lot of impact on the organisation
so it is necessary to continuously monitor it.
Name the various importance of management highlighted above?
Answer:
The various importance of business environment highlighted above:

It helps in coping with rapid changes. The market has fragmented as there are many players,
brand loyalties of the customers keep on changing, customers are more demanding and there
is intense competition in the market.
It helps in planning and policy formulation. They rely on their surveys and past
performances of other companies to achieve policy making and deciding future course of
action.
It helps in improving performance. With all the research the company has realised that the
business environment does tend to have a lot of impact on the organisation so it is necessary
to continuously monitor it.
Question 20:
A greeting card making company in USA is flourishing well. The company makes cards for
different occasions. During the time of Christmas and New Year, the production and selling
of cards reaches a new high. The company exists in an environment which is democratic and
there are rules for every business firm. Once you step out of the company there are
customers, competitors, government authority and almost everything one can think of. The
company appears to have a promising future. However the
firm will have to understand the close relationship between various elements of the business
environment around it.
In the above case which dimension of business environment is highlighted? Which features
of business environment are highlighted in the above case?
Answer:
The dimension of business environment which is highlighted above is “Social”. The
Company makes cards for different occasions. During the time of Christmas and New Year
Eve. The production and selling of cards reaches a new high.
The features of business environment which are highlighted above are:

Totality of external forces. Once you step out of the company there are customers,
competitors, government authority and almost everything you can think of.
 Inter-relatedness. However the firm will have to understand the close relationship between
various elements of the business environment around it.
Question 21:
‘Raise the Bar’ is a sports equipment company. It has different branches in different parts of
the world. However, the requirements of the sports equipments are difterent in different
branches. This is due to the change in cultures and lifestyles of people in the different
countries. The market in which it is dealing is known for awareness of health. The more the
awareness the more is the demand for such equipments. Company knows that the demand for
these products ic unpredictable as new designs keep on coming and the industry keeps on
changing frequently. There is a Research and Development Department which keeps on
updating the equipments in material and design. However the outside business environment
is characterized by changing customer preferences, entry of new competitors making it
change. A meeting was organized recently to understand the external business environment.
However, after the meeting it was realised that business environment can’t be understood in
totality it can only be understood by breaking it into its dimensions. The result of a
successful meeting could be seen later in the performance of the company which created
record sales in the coming year.
Identify the features of business environment highlighted here.
Answer:
The different features of business environment highlighted above are:

Relativity. This is due to the change in cultures and lifestyles of people in the different
countries.
Uncertainty. Company knows that the demand for these products is unpredictable as new
designs keep on coming and the industry keeps on changing frequently.
Dynamic nature. However, the outside business environment is characterized by changing
customer preferences, entry of new competitors making it change.
Complexity. However after the meeting it was realised that business environment can’t be
understood in totality it can only be understood by breaking it into its dimensions.
Question 22:
GHJ Private Ltd. is concerned about the external environment of business. It is busy
analyzing various factors which are going to affect its business. However with a lot of
understanding it developed about the business it found two types of factors; one which
affected the firm directly and the other which affected all the firms in the business. With the
passage of time the challenges for the company have increased. The company finds new
competitors and technological challenges which are posing new changes for it. The company
at the end of the year decides to have a survey. This survey is about knowing the business
environment properly. Even after spending a lot of money on the surveys the company
comes to conclusion that it’s not easy to understand the business environment and it is
properly understood only in parts. The company is ready to seek advice from experts and is
eager to notice changes in the business environment. When a multinational company enters
the market the company is eager in taking preventive measures like improving the product,
aggressive advertising, etc. A special team of experts have been created. The team observes
the changes taking place like changing branding loyalty, more demanding customers, etc. as
it knows the pace of change is more important than the change itself. The painstaking efforts
of the company don’t go unrewarded. The company by the end of the year makes huge profit
and by understanding the business environment is able to increase its revenue.
Which features of business environment have been highlighted in the above case? Also
identify the various importance of business environment highlighted above.
Answer:
The various features of business environment which are highlighted in the above case are:

Specific and general forces. However with a lot of understanding it developed about the
business it found two types of factors; one which affects the firm directly and the other
which affected all the firms in the business.
Dynamic nature. The Company finds new competitors and technological challenges which
are posing new changes for it.
Complexity. Even after spending a lot of money on the surveys the company comes to a
conclusion that it’s not easy to understand the business environment and it is properly
understood in parts.
The various benefits of business environment highlighted in the above case are:

It helps the firm to identify threats and send early warning signals. When a multinational
company enters the market the Company is eager in taking preventive measures like
improving the product, aggressive advertising, etc.
It helps in coping with rapid changes. The team observes the changes taking place like
changing branding loyalty, more demanding customers, etc. as it knows the pace of change is
more important than the change itself.
It helps in improving performance. The Company by the end of the year makes huge profit
and by understanding the business environment, is able to increase its revenue.
Question 23:
Identify the dimensions of business environment in the following cases:
Hand-woven carpets are banned in some European countries as they think there can be
involvement of child labour in the manufacturing of these carpets. Products produced
through the involvement of child labour are banned in these countries.
With the winning of a new party in a particular country an automobile company has decided
to take back its plan of opening 15 plants in that country.
In the month of October a greeting card manufacturing company has decided to increase its
scale of production of New Year Greeting Cards.
A chocolate making company has decided to make more sweetened chocolates for people
living in a particular country.
A super bike producing company has decided to withdraw its earlier proposal of opening 10
new plants in a country as it finds the per capita income of that country too low to purchase
its bikes in large numbers.
Advertising of a particular brand is taken back as it is expected to hurt the sentiments of a
particular section of society. The company takes this decision on a conscientious level.
Answer:
The various dimensions of business environment highlighted above are:

Legal Environment.
Political Environment.
Social Environment.
Social Environment.
Economic Environment.
Social Environment. Since nothing is preventing the company legally, the decision is taken
after taking into consideration the social feelings of the people.
Question 24:
‘On Your Marks’ is a good shoe manufacturing company. The company is the first to start a
shoe having a unique technology giving it a long life. However the company knows that it
exists in an environment where everything around it counts; so everything around it matters.
Therefore, it is trying to observe every small aspect of the business environment. There are
various factors which are closely related to each other and can’t be understood in isolation
like change in lifestyle which can be linked to the improved demand of technologically
advanced shoes. However, the company can’t be self satisfied. It will have to adjust to
rapidly changing technology, fragmentation of market, changing brand loyalties, etc. It has
got good man power and a very well established production department. It knows that
various resources in the form of inputs have to be transformed into the best products and sold
for increasing its revenue. However, there are various challenges which the company is
facing. These are in the form of protests done by labour unions throughout the country which
sometimes assume the form of strikes. The board of directors is keen to adapt to this difficult
situation. Government is playing a very positive role, like it did a few years back, and is
freeing the business environment from unnecessary restrictions and government controls.
The company is hopeful of emerging as a winner under such government support.

Which features of business environment are highlighted in the above case?

Identify the importance of business environment highlighted in the above case?
Which dimension of business environment is highlighted above?
Which economic reform is discussed in the last part of the case?

Answer:
The features of business environment highlighted in the above case are:

Totality of external forces. However, the company knows that it exists in an environment
where everything around it counts; so everything around it matters.
Inter-relatedness. There are various factors which are closely related to each other and can’t
be understood in isolation like change in lifestyle which can be linked to the improved
demand of technologically advanced shoes.
The importance of business environment highlighted in the above case:

It helps in coping with rapid changes. It will have to adjust to rapidly changing technology,
fragmentation of market, changing brand loyalties, etc.
It helps in tapping useful resources. It knows that various resources in the form of inputs
have to be transformed into the best products and sold for increasing its revenue.
The dimension of business environment which is highlighted in the above case is ‘Political
Environment’. These are in the form of protests done by labour unions throughout the
country and about to assume the form of strikes.
The economic reform which is discussed in the last part of the case is ‘Liberalisation’.
Government is playing a very positive role, like it did a few years back, and is freeing the
business environment from unnecessary restrictions and government controls.

Question 25:
‘Runners Ahead’ is an emerging software consultancy company. The a specific manner but
political, social and economic conditions affect it in a general way. The company has
decided to prepare an emergency plan to meet unpredictable challenges which change the
business in a very fast manner particularly in the field of Information Technology. The
changes in the IT sector are very fast. So the chances of success are high; like in the case of
new software launched where the company has the advantage of entering the market early.
However, things are not so easy. Every time circumstances pose new challenges. The
organisation has decided to monitor the external business environment so that it can adopt
suitable measures to increase its client base.
Recently the company has been given a project by the government to study and analyse its
new policy. The policy of the government is to give a bigger role to the private sector by
reducing its own role in the Public Sector Undertakings.
In order, to meet new challenges the company has to exploit various aspects of business.
Recently it has invented a new type of advanced software for social networking sites for the
aged people catering to their specific needs. The company is expecting huge rise in its
revenue through the help of this project.
Which features of business environment is highlighted in the above case? 2
Identify the importance of business environment highlighted in the above case. 2
Which economic reform is highlighted in the above case in the second paragraph of the
above case? 1
WTiich dimension of business environment is highlighted in the above case? 1
Answer:
Recently the company has been given a project by the government to study and analyse its
new policy. The policy of the government is about giving a bigger role to the private sector
by reducing its own role in the Public Sector Undertakings.
In order, to meet new challenges the company has to exploit various aspects of business.
Recently it has invented a new type of advanced software for social networking sites for the
aged people catering to their specific needs. The company is expecting huge rise in its
revenue through the help of this project.

The features of business environment highlighted in the above case are:

Specific and general forces. The company finds its business affected by customers,
competitors, tax taking authorities in an isolated manner but political, social and economic
conditions affect it in a general way.
Uncertainty. The Company has decided to prepare an emergency plan to meet unpredictable
challenges which change the business in a very fast manner particularly in the field of
Information Technology.
The importance of business environment highlighted above:

It enables the firm to identify opportunities and get the first mover advantage. So the
chances of success are high; like in the case of new software launched where the company
has the advantage of entering the market early.
It helps in improving performance. The organisation has decided to monitor the external
business environment so that it can adopt suitable measures to increase its client base.
The economic reform highlighted in the above case is ‘Privatisation’. The policy of the
government is about giving a bigger role to the private sector by reducing its own role in the
Public Sector Undertakings.
The dimension of business environment which is highlighted above is ‘Social’. Recently it
has invented a new type of advanced software for social networking sites for the aged people
catering to their specific needs.

Question 26:
‘Shaktishali Steel’ is a steel manufacturing company. The owner’s brother is a director in a
public sector undertaking. He advises his brother to make his company run properly
otherwise they can also face the same result which less performing PSU’s have faced. The
Public Sector Undertakings now have changed and are trying to generate high revenues for
their own functioning, as the government support has declined.
In the above case which impact of government policy changes on business has been
highlighted?
Answer:
Loss of budgetary support to the public sector.

Question 27:
After the adoption of various economic reforms by the Indian government, the business
scenario in the country has changed. Earlier, the firms used to produce first and go to the
market for sale later. But now-a-days firms analyse the needs and wants of the consumers
first and then produce goods accordingly.
Identify the impact of government policy changes on business and industry in India,
mentioned in the above case.
Answer:
Market Orientation

Question 28:
Identify the dimensions of Business Environment in the following cases:

The demonetisation move of the government has resulted in the accumulation of lakhs of
crores of rupees in the banks. Now the banks will give more loans to the people at lower
interest rate. General public can now afford home loans more easily.
Small business will now move towards transaction of business affairs in plastic money. This
will lead to use of internet, new gadets, etc. and reduce dependence on cash. Report
generation of these transactions will be helpful in acting as proof for the betterment of future
business.
Answer:

Economic environment. Since the demonetisation move results in lowering of interest rates.
Technological environment. Due to demonetisation move, there will be technological
advancement in the way business transactions will be done.