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Amity Campus Uttar Pradesh India 201303 ASSIGNMENTS PROGRAM: BFIA SEMESTER-II Subject Name: Bus iness Environment Study

Amity Campus Uttar Pradesh India 201303

ASSIGNMENTS PROGRAM: BFIA SEMESTER-II

Subject Name:

Bus iness Environment

Study COUNTRY:

SOMALIA

Roll Number (Reg. No.):

BFIA01512010-2013019

Student Name:

MOHAMED ABDULLAHI KHALAF

INSTRUCTIONS

  • a) Students are required to submit all three assignment sets.

ASSIGNMENT

DETAILS

MARKS

Assignment A

Five Subjective Questions

10

Assignment B

Three Subjective Questions + Case

10

Study

Assignment C

Objective or one line Questions

10

  • b) Total weight-age given to these assignments is 30%. OR 30 Marks

  • c) All assignments are to be completed as typed in word/pdf.

  • d) All questions are required to be attempted.

  • e) All the three assignments are to be completed by due dates and need to be submitted for evaluation by Amity University.

  • f) The students have to attach a scanned signature in the form.

Signature

2011

Amity Campus Uttar Pradesh India 201303 ASSIGNMENTS PROGRAM: BFIA SEMESTER-II Subject Name: Bus iness Environment Study

: __________________________

Date: 15 – July –

( √ ) Tick mark in front of the assignments submitted

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Assignment

÷

Assignment ‘B’

÷

Assignment

÷

A’

‘C’

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Bus iness Env ironment

Ass ignment A

Q: 1). “Freedom

ability

&

individuals

of

and

f irms

to

initiate

voluntary

economic

transactions with residents of other countries

is Globalization”. Explain the term, its impact

on

world

economy

&

characteristics of

globalization.

Answer:

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, culture, political systems, economic development and prosperity, and on human physical well-being in societies around the world.

The human society around the world, over a period of time, has established greater contact, but the pace has increased rapidly since the mid 1980’s.

The term globalization means international integration. It includes an array of social, political and economic changes. Unimaginable progress in modes of communications, transportation and computer technology have given the process a new lease of life.

The world is more interdependent now than ever before. Multinational companies manufacture products across many countries and sell to consumers across the globe. Money, technology and raw materials have broken the International barriers. Not only products and finances, but also ideas and cultures have breached the national boundaries.

Globalization is not new, though. For thousands of years, people and corporations have been buying from and selling to each other in lands at great distances. For centuries, they have invested in enterprises in other countries.

But policy and technological developments of the past few decades have spurred increases in cross-border trade, investment and

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migration so large that many observers believe the world has entered a qualitatively new phase in its economic development.

The current wave of globalization has been driven by policies that have opened economies domestically and internationally. Many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people.

To find the right balance between benefits and costs associated with globalization, citizens of all nations need to understand how

globalization works and the policy choices societies.

facing

them and

their

Characteristics of Globalization include;

1) Borderless: Globalization is about an increasingly borderless world and its societal consequences. 2) Information Technology changes: Increase in information flows and greater transporter data flow between geographically remote locations through the internet and communications. 3) Mobility: The characteristic of globalization gave more mobility and less transport costs and increased trade flows. 4) International cooperation; The increasing of the multinational corporations, regional and global organizations leads to the members of the international community expanding from a single nation to international corporations.

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5) Talents mobility and integration: Globalization has increased the growth of talent mobility and integration. More and more personnel dispatched by the corporations to the branches in other countries, and they learn and share the experience or do the project with the local employees. 6) Cultural diversity: Because of the globalization and new technology, it has been found that cultural diversity reflects on the food, music, art, life style, customs and race.

Q: 2). Explain the concept of Economic systems, their features, merits & demerits?

Answer:

An economic system is the system of production, distribution and consumption of goods and services of an economy. It is the structure that guides production, allocation of economic inputs, distribution of economic outputs, and consumption of goods and services in an economy.

In general, an economic system consists of individuals, industries, governments, means of production and a medium of exchange (i.e. money) for buying and selling goods and services. How these factors interact and who controls means of production are the main considerations in identifying the different types of economic systems that exist throughout the world.

The main types of economic systems include capitalism, socialism and the mixed economy.

1) Capitalism: A capitalist system is based on principles of private property and free enterprise. Buyers and sellers interact in a competitive market based on voluntary transactions, with only minimal government involvement.

Merits of Capitalism

Capitalism leads to increase in production, income, savings, investment and development. Due to capitalism, it is possible to assure better quality with less cost. Increase in efficiency leads progress and prosperity.

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It stimulates in wealth maximization with optimum utilization of resources. It is a flexible system of operating price mechanism.

Demerits of Capitalism

Capitalism leads to monopoly, it contains tendency to destroy competition and ultimately to the formation of trusts, cartels and combinations. It creates inequalities of income and wealth. The fact of consumer's sovereignty is a myth. Consumers are ignorant about the quality and utility of products. Depression and unemployment is caused by capitalism. Excessive competition and unplanned production leads to over production which ultimately leads to depression and unemployment. 2) Socialism or Central Planning: In contrast to capitalism, a socialist government takes an active, leading role in structuring and directing the economy. Rather than private property and free enterprise, industries are government-owned. Socialism's goals also include equalizing the distribution of wealth.

Merits of Socialism

Socialism has greater economic efficiency than in capitalism. The means of production are controlled and regulated by the central planning authority towards chosen ends. Economic efficiency is attained by utilizing resources in producing socially useful goods and services which satisfy the basic wants of the people. It gives greater welfare due to less inequality of income. Monopolistic practices are absent in this type of economy. The business fluctuations are also not present and hence there is no problem of unemployment or depression.

Demerits of Socialism

Loss of consumer’s sovereignty in choosing their products. They can purchase those commodities which are available in the departmental stores. There is no freedom of occupation and that they cannot leave it or change it.

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Arbitrary allocation of resources is prevailed in socialism and central planning power commits fault in allocation of resources. Socialism is more of bureaucratic and is operated like machinery. It does not provide necessary initiative to the people to work hard. 3) Mixed Economy: Under a mixed system, the private sector controls many resources of production, but government has a role in influencing the direction of the economy. The government also provides services such as education and health.

Merits of Mixed Economy

Mixed economy incorporates best allocation of resources since it features both capitalism and socialism.

The price mechanism, the profit motive and the liberty of

production and consumption lead

to

the

efficient allocation of

resources. It maintains a good balance between public and private sector.

Both the sectors have competition in the interest

of public

welfare. More than any sector the mixed economy contains all features of the welfare of a state.

Demerits of Mixed Economy

Non-cooperation between the two sectors. They do not face each other and private sector is treated like a third person. Public sector is generally inefficient and burdens the mixed economy as a consequence the production falls. High economic fluctuations prevail in the working of mixed

economy since socialism.

there

is

improper

mixture

of

capitalism

and

In a market, the prices of input and are hiking due to the shortages, the public sector equally experience these shortages and hence economic fluctuation which prevails in capitalist economy also prevails in mixed economy.

Q: 3). Deve lopment

of

any

country

is

severe ly hampered by major hurd les like Poverty and Unemp loyment . Exp lain the concepts in detail?

Answer:

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Poverty and Unemployment are the two major challenges that are facing the world economy at present.

Unemployment leads to financial crisis and reduces the overall purchasing capacity of a nation. This in turn results in poverty followed by increasing burden of debt. Now, poverty can be described in several ways. As per the World Bank definition, poverty implies a financial condition where people are unable to maintain the minimum standard of living.

Poverty can be of different types like absolute poverty and relative poverty. There may be many other classifications like urban poverty, rural poverty, primary poverty, secondary poverty and many more. Whatever be the type of poverty, the basic reason has always been lack of adequate income. Here comes the role of unemployment behind poverty. Lack of employment opportunities and the consequential income disparity bring about mass poverty in most of the developing and under developed economies of the world.

The concept and content of poverty differs from country to country, depending upon what a particular country accepts as a reasonably good standard of living for its people.

Economic reforms, changes in the industrial policy and better utilization of available resources are expected to reduce the problem of unemployment and poverty that results from it. The economic reform measures need to have major impacts on the employment generating potential of the economy. The governmental bodies are also required to initiate long term measures for poverty alleviation. Generation of employment opportunities and equality in income distribution are the two key factors that are of utmost importance to deal with the dual problem of unemployment and poverty.

Q: 4).

The

surroundings

in

which

the business

functions has a major impact on the success or failure of the business. Discuss the term business environment and its types.

Answer:

The success

of every business depends on adapting

itself to

the

environment within which it functions. For example, when there is a change in the government polices, the business has to make the

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necessary changes to adapt itself to the new policies. Similarly, a change in the technology may render the existing products obsolete, as we have seen that the introduction of computer has replaced the typewriters; the color television has made the black and white television out of fashion. Again a change in the fashion or customers’ taste may shift the demand in the market for a particular product, e.g., the demand for jeans reduced the sale of other traditional wear. All these aspects are external factors that are beyond the control of the business. So the business units must have to adapt themselves to these changes in order to survive and succeed in business. Hence, it is very necessary to have a clear understanding of the concept of business environment and the nature of its various components.

The term ‘business environment’ connotes external forces, factors and institutions that are beyond the control of the business and they affect the functioning of a business enterprise.

Business Environment has two components: Internal Environment and External Environment

Internal Environment: It includes 5 Ms i.e. man, material, money, machinery and management, usually within the control of business. Business can make changes in these factors according to the change in the functioning of enterprise.

External Environment: Those factors which are beyond the control of business enterprise are included in external environment. These factors are: Government and Legal factors, Geo-Physical Factors, Political Factors, Socio-Cultural Factors, Demo-Graphical factors etc. It is of two Types: Micro/Operating Environment and Macro/General Environment.

Micro/Operating Environment: The environment which is close to business and affects its capacity to work is known as Micro or Operating Environment. It consists of Suppliers, Customers, Market Intermediaries, Competitors and Public.

(1) Suppliers: – They are the persons who supply raw material and required components to the company. They must be reliable and business must have multiple suppliers i.e. they should not depend upon only one supplier.

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(2) Customers: - Customers are regarded as the king of the market. Success of every business depends upon the level of their customer’s satisfaction.

(3) Market Intermediaries: - They work as a link between business and final consumers.

(4) Competitors:

-

Every

move

of

the competitors

affects the

business. Business has to adjust itself according to the strategies of

the Competitors.

(5) Public: - Any group who has actual interest in business enterprise is termed as public e.g. media and local public. They may be the users or non-users of the product.

Macro/General Environment: It includes factors that create opportunities and threats to business units. Following are the elements of Macro Environment:

(1) Economic Environment: - It is very complex and dynamic in nature that keeps on changing with the change in policies or political situations. It has three elements: Economic Conditions of Public, Economic Policies of the country and Economic System.

Other Economic Factors: Infrastructural Facilities, Banking, Insurance companies, money markets, capital markets etc.

(2) Non-Economic Environment: Following are included in non- economic environment:-

(i). Political Environment: It affects different business units extensively. Components of political Environment are: (a) Political Belief of Government, (b) Political Strength of the Country, (c) Relation with other countries, (d) Defense and Military Policies, (e) Centre State Relationship in the Country, (f) Thinking Opposition Parties towards Business Unit. (ii).Socio-Cultural Environment: Influence exercised by social and cultural factors, not within the control of business, is known as Socio-Cultural Environment. These factors include: attitude of people to work, family system, caste system, religion, education, marriage etc.

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(iii).

Technological Environment: A systematic application of scientific knowledge to practical task is known as technology. Everyday there has been vast changes in products, services, lifestyles and living conditions, these changes must be analyzed by every business unit and should adapt these changes.

(iv). Natural Environment: It includes natural resources, weather, climatic conditions, port facilities, topographical factors such as soil, sea, rivers, rainfall etc. Every business unit must look for these factors before choosing the location for their business.

(v).Demographic Environment: It is a study of perspective of population i.e. its size, standard of living, growth rate, age-sex composition, family size, income level (upper level, middle level and lower level), education level etc. Every business unit must see these features of population and recognize their various needs and produce accordingly.

(vi).

International Environment: It is particularly important for industries directly depending on import or exports. The factors that affect the business are: Globalization, Liberalization, foreign business policies, cultural exchange.

Q: 5). Instead

of

being called the World Trade

organization it should be called “World Trade of Opportunities”. In lieu of this statement discuss the WTO.

Answer:

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business smoothly, predictably and freely as possible.

The WTO

should

have been called World Trade of Opportunities

because of the general objective of the WTO rules is to

promote

international free trade, i.e. to minimize the amount interference in trade flows that cross national borders.

of

state

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The WTO System is based on three fundamental principles:

Trade rules should be applied by a country without discrimination between its trading partners or between domestic and imported products. Trade rules should be agreed with a view to lower trade barriers:

tariffs and non-tariff barriers to trade.

Trade rules should not only ensure free trade, but also fair trade.

Assignment B:

Q: 1).

It

said

is

that

Multinational

companies

play a pivotal

role in the global economy,

linking rich

&

poor

economies.

In

lieu

of

this

statement discuss the merits, demerits & role of MNCs.

Answer:

Multi-national corporations (MNC) are huge industrial organizations having a wide network of branches and subsidiaries spread over a number of countries. The two main characteristics of MNCs are their large size and the fact that their worldwide activities are centrally controlled by the parent companies. Such a company may enter into joint venture with a company in another country. There may be agreement among companies of different countries in respect of division of production, market, etc. These companies are to be found in almost all the advanced countries, with the USA perhaps the biggest amongst them. Their operations extend beyond their own countries, and cover not only the advanced countries but also the LDCs.

Many MNCs have annual sales volume in excess of the entire GNPs of the developing countries in which they operate. MNCs have great impact on the development process of the Underdeveloped countries.

Let us discuss the arguments for and against the operation of MNCs in underdeveloped countries.

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Arguments for MNCs (The positive role): The MNCs play an important role in the economic development of underdeveloped countries.

  • 1. Filling Savings Gap: The first important contribution of MNCs is its

role in filling the resource gap between targeted or desired investment and domestically mobilized savings. For example, to achieve a 7% growth rate of national output if the required rate of saving is 21% but if the savings that can be domestically mobilised is only 16% then there is a ‘saving gap’ of 5%. If the country can fill this gap with foreign direct investments from the MNCs, it will be in a better position to achieve its target rate of economic growth.

  • 2. Filling Trade Gap: The second contribution relates to filling the

foreign exchange or trade gap. An inflow of foreign capital can reduce or even remove the deficit in the balance of payments if the MNCs can generate a net positive flow of export earnings.

  • 3. Filling Revenue Gap: The third important role of MNCs is filling

the gap between targeted governmental tax revenues and locally raised taxes. By taxing MNC profits, LDC governments are able to mobilize public financial resources for development projects.

  • 4. Filling Management/Technological Gap: Fourthly, Multinationals

not only provide financial resources but they also supply a “package” of needed resources including management experience, entrepreneurial abilities, and technological skills. These can be transferred to their local counterparts by means of training programs and the process of ‘learning by doing’.

Moreover, MNCs bring with them the most sophisticated technological knowledge about production processes while transferring modern machinery and equipment to capital poor LDCs. Such transfers of knowledge, skills, and technology are assumed to be both desirable and productive for the recipient country.

  • 5. Other Beneficial

Roles:

benefits to the host country.

The MNCs also bring several other

a) The

domestic labour may benefit in the form of higher real

wages. b) The consumers benefits by way of lower prices and better quality products.

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  • c) Investments by MNCs will also induce more domestic investment.

For example, ancillary units can be set up to ‘feed’ the main industries of the MNCs

  • d) MNCs

expenditures

on

research

and

development

(R&D),

although limited is bound to benefit the host country.

Apart from these there are indirect gains through the realization of external economies.

Q: 2).

The

World

Bank runs like a co-operative,

with member countries as share holders. Explain

clearly the IBRD, its functions & purpose?

Answer:

The International Bank for Reconstruction and Development (IBRD) commonly known as World Bank was established in July 1944. It is the outcome of Bretton Woods' conference.

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.

Functions of the World Bank are to finance various projects like health, infrastructure, AIDS awareness, education, tourism, industry and sanitary, etc. It also advises governments in their fiscal, monetary and industrial policy. It provides technical know-how to governments.

The World Bank's official goal is the reduction of poverty. Its primary objective and main purpose is to reconstruct and develop the economies of less developed countries. The World Bank is a vital source of financial and technical assistance to developing countries around the world.

Today the World Bank is playing a key role in the development and growth of less developed countries (LDCs).

Q :

3) . The

Internat ional

Monetary

Fund

( IMF)

is

the

central

inst itut ion

of

the

internat ional the IMF.

Answer:

monetary

system -D iscuss

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The International Monetary Fund (IMF) is an international organization that oversees the global financial system by monitoring the macroeconomic policies of its member countries, in particular those with an impact on exchange rate and the balance of payments. Its objectives are to stabilize international exchange rates and facilitate development through the encouragement of liberalizing economic policies in other countries as a condition of loans, debt relief, and aid. It also offers loans with varying levels of conditionality, mainly to poorer countries. The IMF’s relatively high influence in world affairs and development has drawn heavy criticism from some sources.

The IMF works to foster global growth and

economic stability. It

provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.

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Case Study

Corporate Social Responsibility at IOCL

"CSR: A Cornerstone of our Enduring Success" IOCL

At Indian Oil, corporate social responsibility (CSR) has been the cornerstone of success right from inception in the year 1964. The Corporation’s objectives in this key performance area are enshrined in its Mission statement: "… to help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience."

We at Indian Oil have defined a set of core values for ourselves – Care, Innovation, Passion and Trust – to guide us in all we do. We take pride in being able to claim all our countrymen as our customers. That’s why, we coined the phrase, “Indian Oil – India Inspired", in our corporate campaigns. Public corporations like Indian Oil are essentially organs of society deploying significant public resources. We, therefore, are aware of the need to work beyond financial considerations and put in that little extra to ensure that we are perceived not just as corporate behemoths that exist for profits, but as wholesome entities created for the good of the society and for improving the quality of life of the communities we serve.

As a constructive partner in the communities in which it operates, Indian Oil has been taking concrete action to realize its social responsibility objectives, thereby building value for its shareholders and customers. The Corporation respects human rights, values its employees, and invests in innovative technologies and solutions for sustainable energy flow and economic growth. In the past four decades, Indian Oil has supported innumerable social and community initiatives in India, Touching the lives of millions of people positively by supporting environmental and health-care projects and social, cultural and educational programmes.

Besides focusing primarily on the welfare of economically and socially deprived sections of society, Indian Oil also aims at developing techno- economically viable and environment-friendly products & services for the benefit of millions of its consumers, while at the same time ensuring the highest standards of safety and environment protection in its operations.

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Sharing Profits

Every year, Indian Oil sets aside a fixed portion of its profits for spreading smiles in millions of lives across the country through a comprehensive community welfare and development programme. About one-fourth of the community development funds are spent on the welfare of Scheduled Caste and Scheduled Tribe beneficiaries.

Indian Oil has a concerted social responsibility programme to partner communities in health, family welfare, education, environment protection, providing potable water, sanitation, and empowerment of women and other marginalized groups. Indian Oil has always been in the forefront in times of national emergencies. Indian Oil People have time and again rallied to help victims of natural calamities, maintaining uninterrupted supply of petroleum products and contributing to relief and rehabilitation measures in cash and kind.

Indian Oil’s community-focused initiatives include allotment of petrol/diesel station dealerships and LPG distributorships to beneficiaries from among Scheduled Castes, Scheduled Tribes, physically handicapped, ex-servicemen, war widows, etc. The Corporation has also unveiled kisan seva kendras as small-format retail outlets to reach quality products and services to people in the rural areas. Indian Oil has also set up the Indian Oil Foundation (IOF) as a non-profit trust to protect, preserve and promote national heritage monuments. The Corporation also supports a variety of endeavors in arts, culture, music and dance, apart from organizing programmes on its own under the banners of Indian Oil Art Exhibition, Indian Oil Sangeet Sabha and Indian Oil Kavi Sammelan.

As part of its environment-protection initiatives, Indian Oil has invested close to Rs. 7,000 crore in state-of-the-art technologies at its refineries for production of green fuels meeting global standards. To further reduce dependence on precious petroleum products and secure the nation’s energy security, the Corporation is now in the process of commercializing various options in alternative fuels such as ethanol-blended petrol, biodiesel, and Hydrogen and Hydrogen-CNG mixture.

With safety, health and environment protection high on its corporate agenda, Indian Oil is committed to conducting business with a strong environment conscience, so as to ensure sustainable development, safe work places and enrichment of the quality of life of its employees, customers and the community. Indian Oil is also committed to the Global Compact Programme of the United Nations and endeavors to

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abide by the 10 principles of the programme, some of which are already part of the Corporation’s Vision and Mission statements. It is the firm resolve of Indian Oil people to move beyond business, touch every heart and fuel a billion dreams.

Read the article and make an assessment of its social responsibility towards;

1) Customers 2) Employees 3) Local Community

Answer:

Indian Oil acts in a socially responsible manner by setting aside a fixed portion of its profits for spreading smiles in millions of lives across the country through a comprehensive community welfare and development programme. About one-fourth of the community development funds are spent on the welfare of Scheduled Caste and Scheduled Tribe beneficiaries.

Against this backdrop, Indian Oil thinks of their overall stakeholders, which include:

1) Customers: The most immediate, influential and targeted stakeholder for any organization is the customer or the consumer of its goods or services. Indian Oil has social responsibilities towards its customers. Those responsibilities to consumers are a natural outcome of Indian Oil’s good business. However, there are broader social responsibilities including:

Providing good value for money.

The safety and durability of products/services.

Standard of after-sale service.

Long-term satisfaction – serviceability, adequate supply of

products/services.

Fair standards of advertising and trading; and

Full and unambiguous information to potential consumers.

2) Employees: social responsibilities of Indian Oils towards their employees extend beyond the terms and conditions of the contract to include: justice in treatment; democratic functioning of the organization; training in new skills and technologies; effective personnel and employment relations policies and practices; and provision of social and leisure facilitates.

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3) Local Communities: Indian Oil has a concerted social responsibility programme to partner communities in health, family welfare, education, environment protection, providing potable water, sanitation, and empowerment of women and other marginalized groups. Indian Oil has always been in the forefront in times of national emergencies. Indian Oil People have time and again rallied to help victims of natural calamities, maintaining uninterrupted supply of petroleum products and contributing to relief and rehabilitation measures in cash and kind.

Indian Oil’s community-focused initiatives include allotment of petrol/diesel station dealerships and LPG distributorships to beneficiaries from among Scheduled Castes, Scheduled Tribes, physically handicapped, ex-servicemen, war widows, etc. firms often try to be seen as friendly to their neighborhood. Although this might be considered a genuine concern or just an attempt to buy favour, In both cases, one might argue, the organizations will adopt a proactive tendency to community rather than to wait for long and be reactive.

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Assignment C (40 Multiple choice questions)

Q: 1).

The

most

recent round of GATT provided

new rules to prevent dumping. This round was the:

a)

Kennedy Round.

 

b)

Uruguay Round. (√)

c)

Merry-Go Round.

 

d)

American Round.

Q: 2).

_______________

MNCs

have

approaches

for

international business:

 

a)

1

b)

2

c)

4

d)

3 (√)

Social responsibility is majorly

Q: 3). Corporate towards:

a)

Only shareholders

 

b)

Shareholders, employees, society(√)

customers

&

c)

Only employees

 

d)

Only customers

Q: 4).

A situation where any advantage given by

one

member of the WTO to another member must be extended to all WTO members.

a)The most favored nation principle. (√)

 

b)

The intra-regional principle

 

c)

The comparative advantage principle

 

d)

The trade diversion principle

 

e)

The excessive invoicing principle

Q: 5).

Which organisation of the World Bank Group deals

with matters related to the development of the poorest countries in the world?

a)

International

Bank

The

Reconstruction

for

and

Development

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b)

The International Development Association (√)

c)

The International Finance Corporation

d)

The Multilateral Investment Agency

 

Q: 6).

What are the forms of assistance that the World

Bank provides to its members?

 

a)Technical and f inancial (√)

b)

Political and financial

c)

Political and economic

d)

Technical and military

Q: 7). Which of the following international organizations

is now responsible for developing and maintaining the system of international trade rules and dealing with trade disputes?

a)

IMF

b)

WTO (√)

c)

IBRD

d)

GATT

Q: 8).

SDR stands for

 

a)

State depository receipt

 

b)

Simple depository receipt

c)

Sample depository receipt

d)

Statutory depository receipt

N.B.

the

correct

answer

is:

( Special Drawing

Rights) (√)

 

Q: 9). Generally, countries with higher inf lation have

a)

Similar money growth patterns to low-inflation countries.

b)

Lower money growth than low-inflation countries.

c)

Higher levels of government spending than low- inflation countries.

d)

Higher money growth than low- inf lation

countries. (√) Q: 10). Being amongst the poorest of the poor in low income countries is:

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  • a) Relative poverty

  • b) Absolute poverty

  • c) Ultra poverty (√)

  • d) Voluntary poverty

Q: 11).

Concept relating to the unfairness or

injustice of a society in its divisions of rewards & business is:

  • a) Human resource development

  • b) Social injustice (√)

  • c) Parallel economy

  • d) Poverty

 

Q: 12).

Inf lation can be def ined as:

 

a)Rise

in

the general

level

prices of goods

of

and services in an economy over a period of time. (√)

  • b) Fall

in

the general

level

of

prices

of goods

and

services in an economy over a period of time

  • c) No change

in the general

level of prices of goods

and services in an economy over a period of time

  • d) change

Cyclical

in

the

general level of

prices

of

 

goods and

services

in an economy

over

a period

of time

Q: 13).

Wh ich

of

the

follow ing

are

often

regarded as character iz ing g lobalizat ion?

  • a) Increasing space

  • b) Shrinking space

  • c) Strengthened borders

  • d) Disappearing borders (√)

Q: 14). Which

the

of

following

perspectives

of

globalization

most

is

likely

reflect

to

views

the

of

economists?

  • a) of

growth

The

international

trade

and

the

increase in international trade flows

 
  • b) The rise of global culture and global media

 
  • c) emergence

The

of

global

conflicts

global

and

institutions

  • d) The

decline

of

sovereignty

nation

the

of

state(√)

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Q: 15). The work of an MNC is mainly concerned with:

a)Adapting a marketing mix to enter a market in another country. (√)

  • b) Transferring a marketing mix to enter a market in another country.

  • c) Establishing global brands.

  • d) Translating product messages.

Q: 16).

A

global

organization which:

instructions

and

advertising

market

leader

is

an

  • a) Has the monopoly over several foreign markets.

  • b) Is recognized as being ahead of the rest in terms of market share. (√)

  • c) Is ahead of the competition in terms of global innovation.

  • d) Has more than 50% global market share.

Q: 17). Which of the following organizations

was established by

industrialized nations to

loan money to underdeveloped and developing

countries?

  • a) OPEC

  • b) NAFTA

  • c) The World Bank (√)

  • d) The IMF

Q: 18).

GDP stands for:

  • a) Gross National Product

  • b) Gross Domestic product (√)

  • c) Government National Product

  • d) Gross National Premise

Q: 19).

Capitalism, Socialism & Mixed economy

are types of

  • a) Economic systems

  • b) Business environment (√)

  • c) Economic policies

  • d) Economic controls

Q: 20).

Which

of

the

following

could

not

be

considered a major economic system?

~ 24 ~

a)

Capitalism.

b)

Communism.

c)

Socialism.

d)

 

Physical quality of li fe index. (√) Basic human needs include

Q: 21).

a)Food, clothing and housing. (√)

 

b)

Health, education and quality housing.

 

c)

Adequate nutrition, primary education, health, sanitation, water supply and housing.

d)

Longevity and living standards.

 

Q: 22).

The

percentage

of

the

labour

force

that is unemployed is the:

 

a)

Unemployment rate. (√)

b)

Labour force rate.

c)

Unemployment population ratio

d)

Employment rate.

Q: 23).

An

individual who is not working and

who

has given up looking for work is classi f ied

as:

a)

Hard core unemployed.

 

b)

Unemployable.

c)

A discouraged worker. (√)

 

d)

Unemployed.

Cyclical unemployment is the:

Q: 24).

 

a)

Unemployment that results when people become

discouraged about their chances of finding a job so they stop looking for work.

b)

Portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.

c)

Portion of unemployment that is due to the normal working of the labour market.

d)

Unemployment

that

occurs

during

recessions and depressions. (√)

 

Unemployment

resulting

Q: 25).

from

real

wages being above their equilibrium level

is

called

______

unemployment

~ 25 ~

  • a) Natural

  • b) Disequilibrium (√)

  • c) Structural

  • d) Frictional

Q: 26). The framework for helping employees

develop their personal & organizational skills is:

a)Human resource development (√)

  • b) Employee training

  • c) Employee management

  • d) Performance management

Q: 27).

Analysing

best assists in:

the

business

environment

  • a) Identifying key competitive forces; identifying competitive position; identifying key opportunities, threats, strengths and weaknesses.

b) Auditing

macro

environmental

influences;

identifying key competitive forces; identifying competitive position; identifying key

opportunities and threats.

c) Auditing external and organizational factors;

identi fying key competitive forces; identi fying competitive position; identi fying key opportunities and threats. (√)

d) Assessing

historical

trends; auditing

environmental dangers; identifying strategic capabilities; identifying competitive position.

Q: 28).

The

following

of globalisation:

factors

are

key

drivers

  • a) Government action, exchange rates, competition and socio-demographic factors.

  • b) Market convergence, competition, exchange rates and cost advantages.

  • c) Cost advantages, government action, economic cycles and competition.

  • d) Market, cost, competition and government

policies. (√) Q: 29). In the Five Forces framework, the term “threat of entrants” means:

~ 26 ~

a)

The possibility

an

of

competitor

existing

capturing the entire market.

 

b)

The possibility of an existing competitor

withdrawing from the market.

 

c)

The possibility of a new competitor entering the market.

d)

The

possibility

of

a

competitor

potential

entering a di f ferent market. (√)

 

Q: 30).

Which of the following statements in

relation to the Five Forces framework

 

a)

The framework assists in developing a broad perspective on the environment within which an organization is operating.

b)

It is not appropriate in public sector management.

c)

The framework is a means of identi fying the forces which af fect the level of competition in an industry or sector. (√)

d)

The framework identifies the major stakeholders of an organization.

Q: 31).

The f ive forces that af fect

level of

the

competition in an industry are:

 

a)Threat of entrants; power of buyers; power of suppliers; threat of substitutes; competitive rivalry. (√)

b)

Threat

of

buyers;

power

of

power

entry;

of

substitutes;

threat

of

suppliers;

threat

of

recession.

 

c)

Threat

of

recession;

power

of

buyers;

power

of

suppliers;

threat

of

management

failure;

competitive rivalry.

d)

Threat

of

power

entry;

of

buyers;

power

of

suppliers;

threat

of

government

substitutes;

action.

Q: 32).

Porter suggests the following reasons

for

one

nation

being

more

competitive than

another:

 

~ 27 ~

  • a) Ability to speak English; developed network of supporting industries; absence of competition; and low labour cost.

  • b) Abundant natural resources; skilled labour force; temperate climate; and democracy.

  • c) Factor conditions; demand conditions; related and supporting industries; and f irm strategy, industry strategy and rivalry. (√)

  • d) Strong sporting ethos; emphasis on individual achievement; strong national party in power; large home market.

Q: 33).

A successful business must meet its:

  • a) Economic objectives

  • b) Social objectives.

  • c) Economics and social objectives (√)

  • d) Top executive’s expectations

Q: 34).

Companies

have

to

change

their

product portfolio because

cultural

of

preferences. These are included under:

  • a) Demographic environment

  • b) Political environment

  • c) Socio-Cultural environment (√)

  • d) Technological environment

Q: 35).

Environment related to business is

  • a) Stagnant

  • b) Predictable

  • c) Dynamic (√)

  • d) Simple

Q: 36).

The marketing mix for an organization

is decided by

  • a) Legal environment

  • b) Demographic environment (√)

  • c) Economic environment

  • d) Political environment

Q: 37).

HRD

aims

to

well as organizational

maximize

employees

?

____________

as

~ 28 ~

a)

Effectiveness

b)

Economy

c)

Efficiency

d)

Performance (√)

Q: 38).

The focus of HRD revolves around

a)

Machine

b)

Motivation

c)

Money

d)

Men (√)

Q: 39).

The form of economic system in which

man, machine and land are in individual hands

is:

a)Capitalism (√)

 

b)

Socialism

c)

Mixed Economy

d)

Democracy

Q: 40).

Industrial,

f iscal,

Export- Import

policies are types of :

 

a)Economic policy (√)

b)

Licensing policy

c)

Monetary policy

d)

Foreign policy

~ 29 ~