Business Environment BBA 2 Sem

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Q1. Discuss the nature and dynamism of business environment. What factors trigger changes in the business environment?

Q2. Elaborate upon the major components of internal environment of a business firm?

Q3. Explain the main objectives as incorporated in various five-year plans of India.

Q4. Social responsibility is a luxury which a few business organizations can afford’. Do you agree or disagree? Give arguments in support of your answer.

Q5. Write short answers to any three of the following: – 

  1. a) Factors effecting technological environment of business
  2. b) Economic Liberalization
  3. c) Horizontal and vertical integration
  4. d) Special Economic Zones (SEZs)
  5. e) TRIPS & TRIMS

Q6. How technological change effects business? Discuss with suitable examples.

Q7. Explain the regulatory role of the government in an economy. Is government intervention in the economy desirable?

Q8. Explain the role and functions of WTO and discuss its importance in promoting international trade.


Case Study


ABC Ltd. is an Ahmedabad based soaps and detergent company. It has a broad product portfolio, with salt and soda ash to soaps and detergent manufacturing and marketing. The company was established in 1975 and its early operations were small. It adopted a strategy of low pricing and low margins to beat Multinational giants in the same sector. It benefited by operating in small scale sector and thus saved enormously on excise duty that multinationals had to pay for every kilogram of soap/ detergent they produced. It also concentrated on widening its distribution network. Initially, sales pushed mainly through word of mouth and latter on as the products became popular, sales agents/distributors across the country associated with the company and operated on the tiny margins offered by the company, owing to volumes.

The company intelligently uses television as a medium to promote its brands and push sales. In 2007-08, the company’s net sales grew to Rs 3206 crores, 13.5% higher than 2006-07. Its net profit during the same period was Rs. 446 crores, up by 18% from 2006-07. The debt servicing burden was also decreased by 21% to about 36 crore during 2007-08.


The company saves much on its various expenditure heads like staff cost, power and fuel through better operational efficiency and re-engineering. It has already created a brand associated with cheap products. The company also faces intense competition from hundreds of small scale soap makers. Currently, in 2009-10 the company employs a workforce of 14000 and a turnover of around Rs. 3600 crores. Over the years the company has increased its sales volumes through better product mix, focus on R&D, and proper advertising.


As a part of its ‘Corporate Social Responsibility’ ABC Ltd. has ventured into secondary and higher education and runs educational institutions with a determination to serve the society and create a goodwill. Quality education and vocational training is imparted to the needy free of cost. It has also set up old age homes in the state of Gujarat.


Q1. Read the profile of ABC Ltd and carry out SWOT analysis for presenting before the board if it is feasible to expand the operations.

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  1. Banking sector will fall under which of the following sectors?
  2. In which production India has attained self-sufficiency?
  3. The main watchdog of international trade is —
  4. Find the odd one out—
  5. National Income estimates in India is prepared by—
  6. Who is the Chairman of NDC?  
  7. The Plan Holiday refers to the period—  
  8. Which of the following regulates the working of stock markets in India?  
  9. The New Economic Policy launched in 1991 consist of—

(i) Stabilization policy

(ii) Import control policy

(iii) Deficit financing

(iv) Structural adjustment policy


  1. Closed economy’ is one in which—  
  2. Mixed economy means—  
  3. The largest share in India’s national income is from—  
  4. VAT is imposed—
  5. Which of the following countries per capita income is the highest?
  6. India is not a member of—  
  7. Black money in India—  
  8. Stagflation means—
  9. The President of India is elected by—  
  10. Which of the following is not a fundamental right enshrined in the Indian Constitution?  
  11. India has—
  12. Income tax is an item of—  
  13. The objective of case-study is—  
  14. Inflation, in theory occurs—
  15. Among the supply side measures to control inflation is—  
  16. ‘Level playing field’ argument of industries requires-
  17. In a flexible exchange-rate system, an increase in the domestic interest rate would tend to—
  18. Which of the following items is not included in a country’s balance of payments?
  19. Which two of the following are the most likely effects of the imposition of a tariff on an imported good? (a) The domestic price of the imported good will fall (b) Overseas production of the good may be stimulated (c) Overseas employment will rise (d) The domestic price of the imported good will rise (e) Gain of tax revenue by the government
  20.  Which two of the following are regarded as the main aims of the World Trade Organisation (WTO)?  a)     To eliminate discrimination in world trade  b)     To provide financial assistance to countries with debt  c)     To reduce tariff barriers  d)     To make ‘infant industry’ protection illegal  e)     To help give preferences to smaller economies
  21. Which of the following is the most integrated form of regional economic arrangement?
  22. Which two of the following arguments are most likely to be used to justify protectionism? a) To protect high cost domestic industries b) To protect strategically important industries c) To protect industries which are still immature d) To maximise government tax revenue e) To protect environmental standards  
  23. A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.
  24. A situation where a country exports a product at a price below its cost of production.
  25. A protectionist measure whereby members of a regional trading bloc agree to impose an identical rate of protection on all goods imported from non-member countries.
  26. An MNC (multinational company or corporation) can be defined as a firm which:
  27. Coca Cola is a good example of a _______________ MNC (Multinational Corporation).
  28. MNCs are in a good position to vary their strategies in different phases of the product life cycle. For instance in the __________ phase(s) they will usually _______________.
  29. Which of the following is NOT likely to be a benefit that host countries will obtain from MNCs?
  30. When MNCs reduce their tax bill in different host countries this is usually done by a technique called:
  31. Which of the following can be a disadvantage to the host country of MNC investment:

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