CBSE Class 12 Business Studies Business Environment MCQs Set H

ASSERTION AND REASONING QUESTIONS

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) Increase in technology will benefit in expansion of business.
Reason (R) Social environment for business provides freedom of choice to consumer.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) The internal factors are generally regarded as controllable factors.
Reason (R) Since, the company has control over internal factors
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) Desire competition is generally very high in countries characterised by limited disposable incomes.
Reason (R) In competitive world the firms has to compete, not only the other firms which market the same or similar products, but also all those who compete for the discretionary income of the consumer.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) Economic environment includes the social forces like customs and traditions.
Reason (R) Reserve bank of India is the key regulator of county’s economic environment.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (d)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) High intensity of competitive rivalry can make an industry more competitive and decrease profit potential for the existing firms.
Reason (R) Industry with excess production capacity will have greater rivalry among competitors.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) Business environment does not affect much the decision-making of the companies.
Reason (R) Business environment is related to all external forces outside the organisation.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (d)

Question. Direction: In the questions given below are two statements labelled as Assertion and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) Environmental understanding provide enough information regarding the need of consumers.
Reason (R) Environmental understanding is not an early warning system.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (c)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A)
Reason (R)
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (c)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A) The image and brand equity of the company matters a lot in raising finance forming joint ventures and other alliance.
Reason(R) The main motive of any business should be wealth maximisation.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A): Business environment is the sum total of all the external forces.
Reason (R): The different elements of business environment are closely inter related.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Management is required to remain highly cautious, alert and adaptable.
Reason (R): The business environment is dynamic in nature.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment differs from country to country and even region to region.
Reason (R): Business environment consists of numerous interrelated and dynamic forces.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Political factors play a major role in shaping the environment, in which business firms operate.
Reason (R): Political instability builds up confidence among the business people to invest in the long term projects.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (c)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business Environment is largely uncertain.
Reason (R): It is very difficult to predict future happenings
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Timely understanding of Business Environment helps to make suitable changes in the organisation.
Reason (R): A firm gets various resources or inputs from its business environment.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): A company, which is conscious about the changes of business environment, can take better advantage of opportunities instead of losing them to competitors.
Reason (R): External environment provides numerous opportunities for business units.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Equal pay to male and female workers for equal work is an example of social environment.
Reason (R): Analysis and understanding of social environment is important as it determines the products, services and standards of conduct that are acceptable to society.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment is aggregative in nature.
Reason (R): Business environment is the sum total of all things external to business firms (Totality of external forces)
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Social, political, legal and technological conditions are the specific forces of business environment.
Reason (R): They have impact on all business enterprises and. thus may affect an individual firm only indirectly.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (d)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment is dynamic.
Reason (R): It becomes easy to comprehend at once what exactly constitutes a given environment.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (c)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment is a complex phenomenon.
Reason (R): It is relatively easier to understand in parts but difficult to grasp in its totality;
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Each business firm is not an island unto itself; it exists, survives and grows within the context of the element and forces of its environment.
Reason (R): A good understanding of environment by business managers enables them not only to identify and evaluate, but also to react to the forces external to their firms.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment helps in improving performance.
Reason (R): Enterprises that continuously monitor their environment and adopt suitable business practices are the ones which not only improve their present performance but also continue to succeed in the market for a longer period.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Economic environment refers to all the forces and factors which directly influence the economy of your country.
Reason (R): Economic environment consist of gross domestic product, national income at national level and per capita level, profit earning rate, productivity and employment rate, monetary and fiscal policy of the government, etc.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Social environment consist of the customs and traditions of the society in which business is existing.
Reason (R): High inflation rate set as constraint as they increase the cost of production.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): The political environment has immediate and great impact on the business transactions so businessmen must scan this environment very carefully.
Reason (R): The business man has to make changes in his organisation according to the changing factor of political environment.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (a)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Technological environment includes forces related to scientific improvements and innovations which provide new ways of producing goods and services and new way of operating business.
Reason (R): Import and export of technology is important for a nation to develop.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment cannot be predicted. It is highly uncertain and unpredictable.
Reason (R): Business environment keeps on changing. Sometimes there is a change in technology, tastes and preferences of consumers, etc.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Business environment is very complex.
Reason (R): it helps the firm to identify threats and early warning signals.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (b)

Question. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below:
Assertion (A): Study of business Environment helps in coping with rapid changes.
Reason (R): Changes in Business environment affects all firms in the same way.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Answer: (c)

CASE BASED QUESTIONS

Case I: 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 alignment of business operations with the business environment will result in better performance.

Question. Identify the component of business environment highlighted in the above Para.
(a) technological environment
(b) Social environment
(c) Legal environment
(d) Economic environment
Answer: (a) Technological environment

Question. State features of business environment as discussed by Professor Mehta with Naman and Govind.
(a) Dynamic nature and inter-relatedness
(b) Uncertainty and specific
(c) Complex and general
(d) Relativity and complexity
Answer: (a) Dynamic nature and inter-relatedness

Question. State any point of importance of business environment as stated by Professor Mehta in the above situation.
(a) Helps in making planning and policy
(b) Improvement in performance
(c) It enables the firm to identify opportunities and getting the first mover advantage
(d) Helps to adapt change
Answer: (c) It enables the firm to identify opportunities and getting the first mover advantage

Case II: Gallant’ is a well-known FMCG (Fast Moving Consumer Goods) company in India. However, for the past few years its profitability is diminishing due to the presence of a new company ‘Prakritik’. ‘Prakritik’ has gradually acquired a reasonable share in a wide variety segments like soaps, shampoos, detergents, dish wash and oral care. One of the key reasons is that ‘Prakritik’ has positioned itself as a natural/Ayurvedic brand and this approach has worked well with the Indian consumer. In order to compete with this threat ‘Gallant’ has acquired a premium Ayurvedic brand ‘Madhumita’ from another group. Moreover it’s likely to increase its advertising budget to counter the threat from ‘Prakritik’.
In the context of the above case:

Question. Identify the related component of the business environment which has contributed effectively towards the success of Prakritik.
(a) Economic aspect
(b) Legal aspect
(c) Political aspect
(d) Social aspect
Answer: (d) Social aspect

Question. Identify one way in which ‘Gallant’ has responded to the changes in its business environment.
(a) Acquisition
(b) Brand building
(c) Both (a)& (b)
(d) Only (b)
Answer: (c) Both (a) & (b)

Question. What was the plan of the Gallant company to counter the threat from ‘Prakritik’?
(a) To increase its total budget
(b) Increase its advertising budget
(c) To increase its sales
(d) To increase its expenditure
Answer: (b) increase its advertising budget

Case III: “World Softwares” is a software giant. It has many branches throughout the world. The company knows that it has great opportunities in its path. Earlier it was limited only to its native country but 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.

Question. Which type of advantage has been indicated in the last line of the above case?
(a) First mover advantage
(b) Disinvestment
(c) Both (a) &(b)
(d) None of the above
Answer: (c) Both (a) &(b)

Question. Identify the Business of the company
(a) Hardware
(b) Malware
(c) Software
(d) None of the above
Answer: (c) Software

Case IV: The name and taste of Coca-Cola is known to almost each and every individual in India as well as throughout the world. This carbonated soft drink holds the most market share in the soft drink market and got itself a special seat in each and every gathering. The Coca-Cola Company has on occasion introduced other cola drinks under the Coke name. The most common of these are Diet Coke, along with others including Caffeine free Coca-Cola, Diet Coke Caffeine free, Coca-Cola Zero Sugar, CocaCola Cherry, Coca Cola Vanilla and the list goes on. It has capitalized on each and every opportunity to market itself effectively and place itself in the middle of every gathering. The main reason for such an outstanding placement of product goes to the way they have established the connection between every occasion and the need for Coke to be present there, product design and creative advertising.

Question. Which of the following is not a product of COCA-COLA?
(a) Diet Coke Caffeine free
(b) Coca-Cola Zero Sugar
(c) Coca-Cola Avocado
(d) Coca-Cola Cherry
Answer: (c) Coca-Cola Avocado

Question. In the context of the above given case, identify one valid importance of Business Environment.
(a) Enables a firm to identify opportunities and getting first mover advantage
(b) Uncertainty
(c) Delay in action
(d) Pervasive function
Answer: (a) Enables a firm to identify opportunities and getting first mover advantage

Question. Identify the feature of Business Environment which The Coca-Cola Company managed to get in their favour.
(a) Complex
(b) Specific and general forces
(c) Futuristic
(d) Mental Exercise
Answer: (b) Specific and general forces

Question. Which business environment did Coca-Cola majorly tap into?
(a) Technological Environment
(b) Social Environment
(c) Political Environment
(d) Economic Environment
Answer: (b) Social Environment

Case V: ‘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.

Question. Which features of business environment are highlighted in the above case?
(a) Totality of external forces
(b) Inter-relatedness.
(c) Both (a) &(b)
(d) None of the above
Answer: (c) Both (a) &(b)

Question. Identify the importance of business environment highlighted in the above case?
(a) It helps in coping with rapid changes.
(b) It helps in tapping useful resources
(c) Both (a)&(b) are incorrect
(d) Both (a)&(b) are correct
Answer: (d) Both (a)&(b) are correct

Question. Which dimension of business environment is highlighted above?
(a) Political Environment
(b) Legal environment
(c) Social environment
(d) Economic Environment
Answer: (a) Political Environment

Question. What strengths of the company are discussed in this case.
(a) Good relationship with suppliers
(b) Good manpower
(c) Good customers
(d) None of the above
Answer: (b) Good manpower

Case VI: ‘Runners Ahead’ is an emerging software consultancy company. 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 organization 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 analyses 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.

Question. “The changes in the IT sector are very fast. So the chances of success are high”
Which features of business environment is highlighted in the above case?
(a) Specific and general forces
(b) Uncertainty
(c) Dynamic
(d) None of the above
Answer: (c) Dynamic

Question. Identify the importance of business environment highlighted in the above case.
(a) It enables the firm to identify opportunities and get the first mover advantage.
(b) Early warning signal
(c) Both (a)&(b) are correct
(d) Both (a)&(b) are incorrect
Answer: (a) It enables the firm to identify opportunities and get the first mover advantage.

Question. Which dimension of business environment is highlighted in the above case?
(a) Economic
(b) Legal
(c) Political
(d) Technological
Answer: (d) Technological

Question. “The organization has decided to monitor the external business environment so that it can adopt suitable measures to increase its client base.”
Which importance of business environment is highlighted in the above lines from the case study
(a) It helps in improving performance
(b) It helps in assisting planning and policy formulation
(c) It helps in coping with rapid changes
(d) None of the above
Answer: (c) It helps in assisting planning and policy formulation