CBSE Class 12 Business Studies HOTs Business Environment

Ques 1: Which environment describes characteristics of the society in which the organization exists. 

Ans: Social Environment  

Ques 2: Which element / dimension of business environment involves improvement and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.

Ans: Technological Environment  

Ques 3: Which environment prohibits the advertisement of alcoholic beverages? 

Ans: legal Environment  

Ques 4: Banking sector reforms have led to easier credit terms and better services. This is an example of a key component of the “Business Environment “ name this component?            

Ans:  Economic Environment  

Ques 5: ‘Demand for reservation in jobs for minorities refers to an example of key component of general environment  of business. Name this component. 

Ans: Social Environment  

Ques 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. 

Ans: Liberalization  

Ques 7: Which process aims at giving greater role to the private sector role to the public sector? 

Ans:  Privatization  

Ques 8: State the characteristics of business environment. 

Ans:    1.   Totality of external forces.      2.         Specific and general forces

           3.   Inter-relatedness.                 4.         Dynamics

           5.    Complexity.                         6.         Relatively 

Ques 9: State the economics reforms since 1991 or new Economics policy.

Ans:    a.         Liberalization

            b.         Privatization

            c.         Globalization  

Ques 10: State the factors of Micro Environment.

Ans:     a.         Customers

            b.         Suppliers

            c.         Competitors

            d.         Public

            e.         Marketing intermediaries 

Ques 11: State the factors of Macro Environment.

Ans:     a.         Economical Environment

            b.         Political Environment

            c.         Social Environment

            d.         Legal Regulatory Environment

            e.         Technological Environment  

Ques 12: State the difference between general and specific environment with example. 

Ans: Examples of Specific Environment of Business. 

Basis of difference

Specific Environment

General Environment


Investors, Customers, Competitors and suppliers

Social, Political, Legal and Technological conditions

Direct of Indirect.

It effects individual enterprises directly

It has indirect impact on all business enterprise.

 Ques 13: Explain any five positive effects of liberalization and globalization on business and industry. 

Ans: The positive effects of liberalization and globalization on business and industry are

  1. All round competition
  2. Export became matter of survival.
  3. World class technology.
  4. Buyer’s market increase in production capacity.  

Ques 14: Explain any five negative effects of liberalization and globalization on business and industry in India. 

Ans: The negative effects of liberalization and globalization on business and industry inIndia are

a)      Destabilization of protected environment.

b)      Threat from MNC’s

c)      Corporate vulnerability

d)      Past failure fail to guide

e)      Acquisitions and mergers 

Ques 15: Write the impact of changes in government policy on business and industries. 

Ans:     Impact of changes in govt. policy on business are:

      a.        Increasing competition

      b.        More demanding

     c.         Rapidly changing technology environment

     d.         Necessity for change

     e.         Need for developing human resources.

     f.          market orientation

     g.         Loss of budgetary support to the public sector. 

Ques 16: State the component of business Environment. 

Ans: Components of Business Environment

  1. Internal Environment
  2. External Environment
  3. Micro Environment
  4. Macro Environment  

Ques 17: State the importance of business. 

Ans: .     Importance of business Environment are:

  1. First mover advantage
  2. Warning signal
  3. Taping useful resources
  4. Coping with rapid changes
  5. Assisting in planning and policy
  6. Improving in performance.



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