CBSE Class 12 Business Studies Viva Questions Business Environment

Q1 What is meant by Business Environment?

Ans It may be defined as the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its functioning.

Q2 What is meant by general forces of business environment?

Ans It means the forces which have impact on all business enterprises at the same time.

Q3 What is meant by specific forces of business environment?

Ans It means the forces which affect the decision making of only one enterprise directly.

Q4 Why is business environment called dynamic?

Ans Because it keeps on changing very fast.

Q5 “A good understanding of business enterprises by business managers is necessary”. Give one reason in support of your answer.

Ans It helps the business managers to identify business opportunities to exploit them.

Q6 Mention any two dimensions of business environment.

Ans (i) Economic Environment

(ii) Political Environment

(iii) Legal Environment

(iv) Social Environment

(v) Technological Environment

Q7 Name the two components of economic environment.

Ans (i) Economic policies (ii) Economic Infrastructure

Q8 Passing of Companies Act, 2013 is a component of which environment?

Ans Legal Environment.

Q9 What was the major thrust of economic policy adopted in India before 1991?

Ans Lead role to the public sector.

Q10 What was the thrust of New Economic Policy or economic reforms?

Ans To create a more competitive environment in the environment.

Q11 What is the aim of Liberalisation?

Ans To make private sector free from direct or physical controls.

Q12 What is the aim of privatization?

Ans To reduce the role of state in the economic activities.

Q13 Define disinvestment.

Ans It may be defined as the partial sale of an existing public sector undertaking to the private sector for covering the fiscal deficit of the central government.

Q14 What is the aim of globalization?

Ans Minimizing the restrictions on foreign trade.

Q15 What is meant by denationalization?

Ans It means total sale of an existing public sector undertaking to the private sector.

Q16 Identify the impact of economic reforms introduced in 1991.

(a) Disinvestment of shares of public sector enterprises

(b) Reduction in the custom duty

(c ) Freedom of fixing prices of goods and services

(d) lifting of restrictions on imports.

(e) Easy entry of foreign direct investment.

(f) Transfer of ownership of PSU’s to private sector.

Ans (a) & (f) – Privatisation

(b) & (e)- Globalisation

(c )& (d)- Liberalisation.

Q17 State any two impacts of change of government policy on business and industry.

Ans (i) Increasing Competition

(ii) More demanding customer’s environment.

Q18 “The understanding of business environment helps the managers to identify threats.” What is meant by “Threats”?

Ans Threats means the negative external trends or changes that will hinder a firm’s performance. 

Q19 Name any two components of social environment.

Ans (i) Education System (ii) Birth and death rates.

Q20 Now-a-days we can buy railway tickets through internet. Identify the type of dimension of business environment.

Ans Technological environment.

Q21 What is meant by technological environment?

Ans it means forces relating to scientific improvements and innovations. For example, uses of computers in booking i.e. ticketing.

Q22 What are the main constituents of new economic policy (economic reforms).

Ans Liberalisation, Privatisation and Globalisation.

Q23 State any two features of business environment.

Ans Uncertainty and Complexity.

Q24 Which environment prohibits the advertisement of alcoholic beverages?

Ans Legal environment.

Q25 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.