Chapter-3 , Features of Business Environment

April 20, 2020


Good morning boys! Let us first see the answer to the previous case study.

ANS IS TIME STUDY AND DIFFERENTIAL PIECE WAGE SYSTEM are the two techniques of scientific management highlighted in the case study.

Today, we are starting Chapter-3 (Business Environment). There will be short test for XII-A (DAY 1- APRIL 21) and XII-B(DAY 4- APRIL 24). TOPIC IS CHAPTER-2 (PRINCIPLES OF MANAGEMENT). ONLY MULTIPLE CHOICE QUESTIONS WILL BE ASKED.


CHAPTER- 3
BUSINESS ENVIRONMENT

Q.1 What is meant by business environment? (1)
Ans- The term business environment means the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its performance.

Q.2 What are the two types of environment? (1)
Ans-a) The economic ,social, political, legal and technological forces which operate outside a business enterprise are part of its general environment.
b) The individual consumers or competing enterprises as well as governments, consumer groups, competitors,  media and other institutions working outside an enterprise constitute its specific environment.

Q.3 Explain the features or characteristics of business environment. (6)
Ans- 1) Totality of external forces-  business environment is the sum total of all things external to  business firms and as such is aggregative in nature .
2) Specific and General forces-
a)  Specific forces affect individual enterprises directly and immediately in  their day to day working. Example- Investors, Customers, Competitors and Suppliers.
b)General Forces have impact on
all business enterprises and thus may affect an individual firm only indirectly.
For example- Social , Political , Legal and Technological  Conditions.
3) Interrelatedness-a) Different parts of business environment are closely inter- related.
b) For example- Increased life expectancy of people and increased awareness for healthcare have increased the demand for many health products and services like soft drinks, fat free cooking oil and health resorts.
4)  Dynamic nature- a) Business environment is dynamic as it keeps on changing in terms of technological improvement , shifts in consumer preferences, entry of new competition in the market, etc.
5) Uncertainty-  Business environment is largely uncertain as it is very difficult to predict the future happenings, especially when environment changes are taking place very frequently as in case of information technology of fashion industries.
6) Complexity-a) Since it becomes difficult to comprehend at once what exactly constitutes a given environment as it consists of numerous interrelated and dynamic conditions or forces.
b) Environment is a complex phenomenon that is relatively easier to understand in parts but difficult to grasp in its totality .
7) Relativity- a) Business environment is a relative concept since it differs from country to country and even region to region .
b)For example - Political conditions in USA differ from those in China or Pakistan , demand for sarees maybe fairly high in India where as it may be almost non existent in France.