PART A (10 x 2= 20 Marks)

Answer All Questions

Q. No. Question Marks CO BL PI

Define the term business environment
Business Environment is the sum or collection of all internal
and external factors such as employees, customers' need and
expectations, supply and demand, management, clients,
1 2 1 1 1
suppliers, owners, activities by government, innovation in
technology, social trends, market trends, economic changes,
etc. These factors affect the function of the company and how
a company works directly or indirectly.
Name the types of business environment 1
There are various types of business environments but mainly it
2 is divided into two categories. 2 1 1
• Internal Environment
• External Environment
What are the general forces affecting business 1
environment?
3 General forces include social, political, economic, legal and 2 2 1
technological conditions which affect a business firm
indirectly.
List out a few features of business environment 1
• Totality of external forces
• Specific and general forces
4 2 1 1
• Inter-relatedness
• Dynamic
• Uncertainty
What are the components of the internal environment? 1
• Mission and Objectives
• Management structure and nature
5 • Internal power relationship 2 2 1
• Human Resource
• Company image and brand equity
• Physical Assets and facilities
Define social environment.
6 Social environment is concerned with the environment of 2 2 1 1
society as a whole of which everyone involved
What are the different types of social organization? 2
Social organizations have three systems (A) social system (B)
cultural system and(C) personality system. The social system
consists of family-community-caste-ethnicity religion and
7 linguistic factors. The cultural system consists of knowledge 2 2 1
and beliefs language-folkways, mores and institutions-ideals-
festivals-values-attitude symbols constitute the cultural system.
Personality system includes intelligence temperature-tone
body-build-look and outlook.
8 Define the term attitude 2 2 1 1
 A person’s enduring favourable or unfavourable evaluations,
emotional feelings and action tendencies towards some object
or idea.
Define corporate governance. 2
Corporate governance is the system of rules, practices, and
processes by which a firm is directed and controlled. Corporate
9 governance essentially involves balancing the interests of a 2 1 1
company's many stakeholders, such as shareholders, senior
management executives, customers, suppliers, financiers, the
government, and the community.
Define the term political environment 2
Political Environment is the state, government and its
10 institutions and legislations and the public and private 2 1 1
stakeholders who operate and interact with or influence the
system.

PART B (16 x 2= 32 Marks)

Q. No. Question Marks CO BL PI

What are the dimensions of business environment?
Describe
Economic dimension:
The economic factors that can affect management practices and
operations of a business make up the economic dimension of
the business environment. These can be the inflation rate,
resources, stock market indices, the growth rate of the GDP,
income of people, interest rates, value of the currency, etc.
Social dimensions
All the factors that are controlled by the society at large are
known as the social factors. These include the social customs,
rituals, traditions, instillment of values, ethics and importance
of one’s ethnicity are all included in the social dimensions of
business. These factors may cause the rise or threaten the
demand and supply of a certain type of good in the market.
11.a 15 1 2 1

Political dimensions
The political forces that affect a country from within and from
outside are also important in relation to the business. The
foreign trade of a company determines the rise and fall of the
economy. The export and import are very important factors
when it comes to international relations of a country. Moreover,
the internal political factors also influence the economy as
maintenance of peace in a country is carried by the government.
Technological dimensions
Technology is anything that makes life easier. That is how it
affects businesses also. With the advent of technology
dimensions, businesses have been able to flourish in all
directions. The latest technology makes the mass production of
goods possible and economical. The daily operations of
 business that otherwise are so minute and tedious to do are also
simplified by technology.
Legal dimensions
The law of a country is what dictates the functioning of every
organization in a country. There are many sections and
subsections of the constitution that have to be taken into
consideration while running a business. These factors include
the many legislations passed by the government. Acts such as
the Constitutional Provisions of the Companies Act 2013, The
Trade Union Act of 1926 etc. are examples of laws pertaining
to the legal dimensions of business.
Environmental dimensions
With the increasing global warming and environmental
hazards, the government issues certain guidelines according to
which the industries have to function. This is done to minimize
the waste that is produced by the industries and the harm these
factories cause to the environment. The smoke emission and
chemical discharges of industries greatly affect the
environment. Thus, the production in these factories is limited
so that they may not become contributors in the great
degradation of the environment.
Or
Describe the process and benefits of environmental analysis
PROCESS OF ENVIRONMENTAL ANALYSIS
Scanning
The first step in the environment analysis is scanning the
environment. Environmental scanning is about gathering
information from the environment to assess its nature.
Monitoring
Monitoring is auditing the environment. It involves the
observation of environmental changes to see the trend.
Forecasting
forecasting involves developing involves feasible projections
of what might happen and how quickly. It is done on the basis
11.b of trends and changes. 15 1 2 2

Assessing
Assessing determines the timing and significance of the effects
of environmental changes and trends that have been identified.
Benefits
Helps in identifying threats and opportunities.
Helps in determining strengths and weaknesses.
Helps to identify competitive advantage.
Helps to formulate new plans and strategies.
Fit for big companies.
Helps in plans and strategies implementation.
Helps to adjust to changing business environment.
Discuss the types of social organization in detail.
12.a Social organizations have three systems (A) social system (B) 15 2 2 1
cultural system and(C) personality system. The social system
 consists of family-community-caste-ethnicity religion and
linguistic factors. The cultural system consists of knowledge
and beliefs language-folkways, mores and institutions-ideals-
festivals-values-attitude symbols constitute the cultural system.
Personality system includes intelligence temperature-tone
body-build-look and outlook.
Or
Explain the components of the social environment.
1. Social norms:
Standards of behaviour. Norms define the boundaries between
acceptable and un acceptable behaviour. E.g.: Dress norms,
hospitality norms, and religious norms are followed in social
life. These are called social norms. Social norms influence
people’s material needs.
2. Gender roles:
Social attitudes towards gender roles speak out the difference
between males and females. Of late, there is a change in gender
roles. The difference is slowly disappearing. Women are not
confined to doors. They are shouldering greater responsibilities
on par with males.
3. Family structure:
In some societies “father” is the head; in some others “mother”
is the head of their families. In joint families’ “elder” heads the
family. Purchase decisions, and resource allocation decisions
are taken by the head of the family.
4. Material aspects:
Include money, precious materials, gadgets, houses,
ornaments, vehicles, estates, properties, fixed deposits etc., by
12.b and large Indian society is not very much after material wealth. 15 2 2 2
But in the recent past, material possessions are valued.
5. Spiritual aspects of life:
Our country is a land of spirituals, land of gods, religious
rituals and so on. Positive attitude towards spiritual aspects of
life is deep-rooted in our society.

6. Religion:
Social attitude towards religion is widespread. Irrespective of
religious-path, every person performs his/her rituals to seek
divine blessings. Tolerance for other religious is practical.
7. Technology:
Indian society has been slow on technology adaptation and
absorption. But now, there is a social change, that is pro-
technology. Every society has a technological dimension. This
changes quite often.
8. Aesthetics:
Sense of admiration and appreciation of finer points of beauty.
Design-cut-shade-color and other outward features are
receiving admiration and attention.
9. Education:
 Education is very much valued by the society. Knowledge is
power. An education explosion is taking place. Formal and
non-formal education systems are gaining prominence.
10. Politics:
Eradication of political ills and efforts in that direction are
good politics. In our country, most of the intellectuals avoid
politics.
11. Recreation:
Recreation is re-energizing. Leisure and recreation industry,
such as tourism, entertainment is getting prominence in our
society.
12. Ameliorative interests:
“To give” to the deserved is a good cherished value and goal.
Social attitude towards ameliorative interest is generally
positive in our country.
13. Science:
Indian society is becoming a scientifically advanced society.
We continue to value science as truth. Science has been our
pursuit, right from the past.
14. International community:
Indian society underlines the concept of global cooperation in
all walks of humanity. We are members and we contribute to
global prosperity.
 PART A (10 x 2= 20 Marks)

Q. No. Question Marks CO BL PI

What is meant by opportunities?
Opportunities refer to favorable external factors that could give
1 an organization a competitive advantage. For example, if a 2 1 2 1
country cuts tariffs, a car manufacturer can export its cars into
a new market, increasing sales and
What is an environmental analysis?
Environmental analysis can be defined as the process by which
the factors of the internal and external environment are
2 2 1 2 1
monitored to find out the likely impact on the company’s
performance. The factors usually have both positive and
negative impacts on the firm’s performance.
Define the concept of technological environment.
The technological environment refers to external factors in
technology that impact business operations. Changes in
3 2 1 1 1
technology affect how a company will do business. A business
may have to dramatically change their operating strategy as a
result of changes in the technological environment.
What is meant by competitor analysis?
The competitive environment is where different businesses
4 compete within a defined marketplace. It relates to how an 2 1 2 1
enterprise is affected by its competition and how it adapts its
practices to compete effectively
What are the components of the external environment?
• Geographical and Ecological or Natural
Factors.
5 • Demographic Factors. 2 1 2 1
• Economic Factors.
• Political and Legal Factors.
• Social and Cultural Factors
What are the benefits of social responsibility?
• Increased employee engagement
6 • Better bottom-line financials 2 2 2 2
• More support for local and global communities
• Increased investment opportunities
How does the state influence the business environment?
• Regulation
• Antitrust Laws
7 • Taxation 2 2 2 2
• Subsidies and Incentives
• Ownership and Nationalization
• Trade Policies
Mention the elements of demographic factors.
• Name
• Age
8 2 2 1 1
• Gender
• Occupation
• Educational Qualification
 List out the roles and responsibilities of state governments.
• Intellectual Property Protection
• Environmental and Social Responsibility
• Consumer Protection
9 • Regulation 2 2 1 2
• Antitrust Laws
• Taxation
• Subsidies and Incentives
• Ownership and Nationalization
Name the factors of the political environment.
• Political system
• Political institutions
10 • Political ideologies of the parties 2 2 1 1
• Political stability
• Strength of opposition and political nature of
parties

PART B (15 x 2= 30 Marks)

Q. No. Question Marks CO BL PI

Discuss the nature and importance of business
environment.
FEATURES OF BUSINESS ENVIRONMENT:
Totality of external forces: Business environment is the sum
total of all the forces/factors external to a business firm.
Specific and general forces: Business environment includes
both specific and general forces. Specific forces include
investors, competitors, customers etc. who influence business
firm directly while general forces include social, political,
economic, legal and technological conditions which affect a
business firm indirectly.
Inter-relatedness: All the forces/factors of a business
environment are closely interrelated. For example, increased
awareness of health care has raised the demand for organic food
and roasted snacks.
11.a 15 1 1 2
Dynamic: Business environment is dynamic in nature which
keeps on changing with the change in technology, consumer's
fashion and tastes etc.
Uncertainty: Business environment is uncertain as it is difficult
to predict the future environmental changes and their impact
with full accuracy.
Complexity: The business environment is complex which is
easy to understand in parts separately but it is difficult to
understand in totality.
Relativity: Business environment is a relative concept whose
impact differs from country to country, region to region and
firm to firm. For example, a shift of preference from soft drinks
to juices will be welcomed as an opportunity by juice-making
companies while a threat to soft drink manufacturers.
IMPORTANCE OF BUSINESS ENVIRONMENT
 • It aids in the identification of opportunities and the
achievement of first-mover advantage.
• It assists the company in identifying potential threats
and early warning signals.
• It aids in the retrieval of useful resources.
• It aids in the adaptation to rapid changes in the
environment.
• It contributes to the facilitation of planning and
policy formulation.
• It contributes to the improvement of performance.

Or
How to do competitor analysis? Explain
Threat of new entrants: how easy it is to enter the market
Power of suppliers: how easily suppliers can charge higher
prices
Power of buyers: the ability of buyers to negotiate lower prices
Threat of substitute products: availability of alternative
products
Rivalry among existing competitors: the intensity of
competition
11.b 15 1 3 2
Internal competitive factors
Competitive factors from within the company include:
Quality of products and services: A company offering better
products increases has a better chance to be more competitive.
Innovation: A business investing in research and development
is more likely to introduce innovative products a overcome its
competition.
Productivity: A company that is able to produce more at a lower
cost has a better chance of increasing its market share.
Explain the principles of corporate governance.
Accountability: Companies should be accountable for their
actions to their shareholders and other stakeholders. This
includes transparency in financial reporting and decision-
making processes.
Transparency: There should be clear and open disclosure of
information about the company's performance, financial health,
and decision-making processes. Transparency builds trust
among stakeholders.
Fairness: Corporate governance should ensure fair treatment of
12.a 15 2 2 1
all shareholders and stakeholders, including minority
shareholders. It means that no group or individual should
receive preferential treatment or be unfairly disadvantaged.
Responsibility: The board of directors and senior management
have a responsibility to act in the best interests of the company
and its shareholders. This includes making informed decisions
and managing risks effectively.
Independence: The board of directors should have a sufficient
number of independent directors who are not influenced by
management and can provide objective oversight and guidance.
 Accountability and Audit: Companies should have an effective
system of internal controls and an independent audit function
to ensure the accuracy and reliability of financial reporting.
Ethical Behaviour: Ethical behaviour and integrity should be at
the core of the company's culture. This includes avoiding
conflicts of interest and unethical practices.
Stakeholder Inclusiveness: The interests of all stakeholders,
including employees, customers, suppliers, and the community,
should be considered in decision-making.
Long-Term Focus: Corporate governance should promote a
long-term perspective rather than a short-term focus on
quarterly profits. This helps ensure the sustainability of the
company's operations and its ability to create value over time.
Risk Management: Effective risk management is crucial to
corporate governance. Companies should have mechanisms in
place to identify, assess, and mitigate risks that could affect
their performance and reputation.
Compliance and Legal Obligations: Companies should comply
with all applicable laws, regulations, and ethical standards.
Failure to do so can have legal and reputational consequences.
Board Effectiveness: The board of directors should be
composed of individuals with diverse skills and experiences
who can effectively oversee the company's management and
strategy.
Shareholder Rights: Shareholders should have the right to vote
on important matters, such as the election of directors and
major corporate transactions. They should also have access to
accurate and timely information.
Or
Describe the elements of political environment.
Government Structure: The type of government in place,
whether it's a democracy, autocracy, monarchy, or some other
form, has a profound influence on political stability and
decision-making.
Political Parties: The presence of political parties and their
ideologies can shape government policies and the direction of
a country. The dynamics between these parties can also be
critical.
Political Leaders: The personalities, ideologies, and decisions
13.b of political leaders, such as the president, prime minister, or 15 2 2 1
head of state, can have a significant impact on the political
environment.
Elections and Political Processes: The frequency and fairness
of elections, as well as the integrity of the electoral process, are
essential elements in a political environment. These processes
determine who holds power and how it's transferred.
Political Stability: The level of political stability in a country is
crucial for business and investment. Political instability,
including protests, riots, or coups, can disrupt operations and
lead to economic uncertainty.
Political Ideologies and Beliefs: The prevailing political
ideologies and beliefs in a society influence the development
of policies, laws, and regulations.
Policy and Regulation: Government policies, regulations, and
laws can impact businesses and industries. These can cover
areas such as taxation, trade, labor, environmental regulations,
and more.
Political Risk: Political risk refers to the potential for
government actions, changes in policy, or geopolitical events
to negatively affect businesses and investments. Companies
often assess political risk when expanding internationally.
International Relations: The relationships a country has with
other nations, including alliances, treaties, and conflicts, can
shape its political environment. These relations can have
implications for trade, diplomacy, and security.
Corruption: The level of corruption within government
institutions can have a significant impact on the political
environment and the ease of doing business. Transparency and
anti-corruption measures are critical in this regard.
Legal System: The effectiveness and fairness of a country's
legal system, including the rule of law and the protection of
property rights, influence the political environment and
business climate.
Media and Information: The role of media in shaping public
opinion and holding governments accountable is essential.
Freedom of the press and the control or censorship of
information can impact the political environment.
Public Opinion: The attitudes and beliefs of the general
population can influence political decisions and government
policies, especially in democratic societies.
Geopolitical Factors: Geopolitical factors, including a
country's position in the world and its relations with
neighbouring nations, can affect its political environment and
security.
International Organizations: Participation in international
organizations like the United Nations, World Trade
Organization, and regional blocs can influence a country's
political environment and policies.