II Mid Term Examination BBA II Semester Session 2011-2012

Subject: Business Environment (11 !

Time: "0 Min# Max# Mar$s: 20 %art A# &bjective t'(e )uestions (1 *0#+ , 0-! .i// u( t0e b/an$s

1) Government role is minimum in which type of economic system?...........................

Which economic system is found in following countries?

2) Japan: .. 3) India: . 4) North Korea: 5) 6)

conomic !egislation is concerned with investigating. la"orate #$I

7) %echnology has an impact on society& organi'ation itself and 8) %o promote development of "usiness government used to develop 9) (onetary policy regulates what? 10) )urrency e*change rate is the rate at which .. can "e e*changed.
1rite true or 2a/se 2or t0e 2o//o3in4 statements

11) While deciding any "usiness location a "usiness owner has to analy'e the climate of the region. 12) +ocialist economic system helps in improving technology in the economy. 13) conomic growth is measured as change in Gross $omestic ,roduct of different
countries over a period of one year.

14) %echnology is transferred from government to "usiness. 15) %echnological leadership "rings with it "oth advantages and disadvantages. 16) )olors have no significance in different cultures.
%art B# Attem(t an' 2 )uestions (2*2!

1. What is capitalist economic system and what are its characteristics? 2. What is monetary policy and fiscal policy? 3.
*plain four responsi"ilities of "usiness towards government.

%art 5# Attem(t an' 2 )uestion (2*6!

1. What is socio cultural environment? *plain four factors of socio cultural environment
along with e*amples.

2. Give a detailed note on natural environment

3. What is the impact of technology on society?

II Mid Term Examination BBA II Semester Session 2011-2012

Subject: Business Environment (11 !
S&78TI&9
%art A: &bjective t'(e )uestions

1. )apitalist economic system 2. )apitalist economic system 3. (i*ed economic system 4. +ocialist economic system 5. )urrent regulations and laws 6. #oreign $irect Investment 7. conomy 8. Infrastructure 9. (oney supply 10. )urrencies 11. %rue 12. #alse 13. #alse 14. %rue 15. %rue 16. #alse
%art B: S0ort ans3er t'(e )uestions

Ans3er 1#
5a(ita/ist economic s'stem: - capitalist system is one where resources are allotted through the price or price mechanism. *ample: .+-& Japan& )olum"ia 50aracteristics o2 5a(ita/ism: 1. :i40ts o2 (rivate o3ners0i( o2 means o2 (roduction : very individual has a right to ac/uire private property& to 0eep it and to use it for his welfare. ,roperty refers to only material means of production i.e. land& machinery and factories. 2. %ro2it motive -nything which is produced is produced to sell and only with the motive to earn large profit. 3. .reedom o2 c0oice %here is full freedom to the capitalists in this system. %hey can ma0e their own strategies and decisions for their firm with full freedom. 4. Mar$et 2orces ,rices are not decided "y any e*ternal agency li0e Government. ,rices are automatically decided on the "asis of demand and supply in the mar0et.

Minima/ ro/e o2 4overnment In this type of economy ma1or decisions are ta0en "y the capitalist or private entities. 2ere the ma1or role is played "y the capitalist only.

Ans3er: 2
Monetar' %o/ic' and .isca/ %o/ic'

Monetary policy: %he central "an0 "y its policy can significantly influence the savings& investments and consumer spending in the economy. $epending upon the conditions of the economy the central government may adopt a monetary policy to regulate the supply of money in the economy. #or e*ample& on percentage point reduction in the )ash 3eserve 3atio or +tatutory !i/uidity 3atio will significantly increase the loana"le funds with the commercial "an0s.
Fiscal policy: Government4s strategy in respect of pu"lic e*penditure and revenue can have significant impact on the "usiness. Governments often use ta* incentives or disincentives to encourage or discourage certain activities. #or e*ample& when an industry suffers from recession& a reduction of ta*es li0e e*cise duty or sales ta* may help improve the demand.

Ans3er: ;
:es(onsibi/ities o2 business to3ards 4overnment (an' 2our! 1 Tax (a'ment: %a*es paid "y "usiness enterprises provides a ma1or source of revenue to the government. #irms themselves pay regular ta*es on their sales& income and deduct income ta*es from salaries and wages of employees and pay the collection to the government.
<o/untar' (ro4rammes: 5usiness firms cooperate with government and give special assistance to local government in connection with drought relief& education& tree planting etc. 5usiness e*tends these facilities under the name of social responsi"ility.

%rovidin4 in2ormation: ,olitical leaders "ecause of ine*perience ma0e certain decisions which may not "e in the overall interest of "usiness. 5usiness leaders place "efore the decision ma0ers the facts and pro"lems and argue for the modification or change of decisions. =overnment contracts: (any "usiness firms "id for government contract and if successful carry out the resulting pro1ects with the re/uired specifications and standards. 2ousing pro1ects& oil pipelines are e*ecuted "y private "usiness houses for the government. =overnment services: 5usiness e*ecutives accompany delegations to foreign countries for e*ploring trade and industry prospects. +imilarly& "usiness leaders serve on various advisory "oards constituted "y the government.

%art 5: 7on4 ans3er t'(e )uestions

Ans3er: 1
Socio 5u/tura/ Environment +ocio cultural environment is the sum total of man0ind4s 0nowledge& "eliefs& arts& morals& customs and ha"its ac/uired "y humans as mem"ers of society. .actors 2ormin4 a cu/ture 7an4ua4e
!anguage is central to the e*pression of culture. !anguage is not only a 0ey to understanding the group6 it is the principal way of communicating within it. If several languages are spo0en within the "orders of a country& that country is seen to have as many cultures. If promotional material needs to "e prepared in a foreign language& it is important to ensure that none of the meaning is lost when information is translated. #or e*ample ,ar0er ,en )ompany suffered many pro"lems of multiple meaning in different countries. It hoped to use bola to descri"e its "all point pen. In some countries it conveys the intended meaning& "all pen& "ut in different countries it means 7lie8 or 7revolution8.

Aest0etics
- culture4s aesthetics refer to its ideas concerning good taste and "eauty as e*pressed in the fine arts 9 music& art etc and in the appreciation of color and form. Insensitivity to aesthetic values cannot only lead to ineffective advertising and pac0age design for products6 it can also upset prospective customers. %he significance of different colors may vary considera"le from one culture to another. #or e*ample& "lac0 signifies death to -mericans and many uropeans& "ut in Japan and many other -sian countries& white represents death. -esthetics also hold people4s dress and appearance i.e. garments or accessories.

:e/i4ious be/ie2s - religious system refers to the spiritual side of a culture. 3eligion e*erts a considera"le influence on people4s actions and outloo0 on life& as well as on products they "uy. %o disregard the significance of religious "eliefs could result in e*pensive mista0es. #or e*ample& when the -merican fast food chain (c$onalds was planning to enter India& one political party stated that it would oppose the mar0eting of "eef product in the country "y the multinational where cow is regarded as sacred. <a/ues
:alues are 1udgments regarding what is valua"le or important in life& and they vary greatly from one culture to another. ,eople who are operating at a survival level will value food& shelter and clothing. %hose with high security needs& on the other hand& may value 1o" security& status& money etc. #or e*ample& ,epsodent tried to sell its toothpaste in regions of south east -sia through a promotion which stressed that the toothpaste helped enhance white teeth. In this area&

where some local people deli"erately chewed "etel nut in order to achieve the social prestige of dar0ly stained teeth& such an ad was understanda"ly less than effective

Ans3er: 2
9atura/ Environment 7%he natural environment is the source and support of everything used "y "usinesses 9 raw material& energy source& climactic conditions etc. 3esource availa"ility is the fundamental factor for every "usiness set;up.8 %hus& geographical and ecological factors such as natural resources& weather and climatic conditions& topographical factors& locational aspects in the glo"al conte*t& port facilities etc are all relevant to "usiness. $ifferences in geographical conditions "etween mar0ets may sometimes call for changes in the mar0eting mi*. Geographical and ecological factors also influence the location of certain industries. #or e*ample& industries are re/uired to "e located near the raw material source. %he e*pectations of earth/ua0e occurrences also influence the decision ma0ing in respect of location of "usiness. )limatic and weather conditions affect the location of certain industries li0e tea is suita"le in the climate of -ssam so tea industries are found over there to the ma*imum e*tent. %hey also affect the demand of certain type of product. #or e*ample& in several regions where the temperature is very high in summer& there is good demand for desert coolers6 "ut they are not at all used in some of the other regions. %opographical factors may affect the demand pattern in some cases. #or e*ample& in hilly areas with a difficult terrain 1eeps may "e in greater demand than cars.
cological factors such as depletion of natural resources& environmental pollution and distur"ance of the ecological "alance also affects the "usiness. Government policies aimed at the preservation of environmental purity and ecological "alance& conservation of non replenisha"le resources etc have resulted in additional responsi"ilities and pro"lems for "usiness.

Ans3er: ;
Im(act o2 tec0no/o4' on societ'
%he most influential impact of technology is found on society. %he technological developments affect the every area of social life and an individual4s lifestyle. %hese may "e:

1. Tec0no/o4' reac0es (eo(/e t0rou40 business: %he technology reaches people through "usiness. +ociety e*pects new inventions to "e converted into goods and services and the "usiness is an institution which provides this facility. %he "usiness has necessary resources to convert new discoveries into useful products. 2. >i40 ex(ectations o2 consumers: %oday4s consumer is considered as 0ing of the
mar0et. %hey demand new varieties of products& superior in /uality& more safe and more comforta"le. %his e*pectation of consumers is due to high technological developments.

2igh e*pectations of consumers pose a challenge to the "usiness and provide an opportunity to the owners of "usiness institutions for technological advancement. 3. S'stem com(/exit': %echnology has resulted in system comple*ity. No dou"t& modern
machines wor0 "etter and faster in comparison to men. 5ut if they fail the whole wor0 comes to halt and they often fail "ecause of their comple*ity of composition.

4. Socia/ c0an4e: %echnology advancements affect our routine life "y ma0ing the life more comforta"le and simpler. #or e*ample& communication mode is affected a lot "y technological development. Initially only letters were the mode of communication "ut now a day4s wireless communication system has emerged.