Campus: Smart Campus

Session: 2024-2025

ANSWER KEY

Name of the Examination: CT-2

Class : CBSE 12 Subject: Business Studies
Date : May 28, 2024

Answer
Section A
Multiple Choice Questions- [10]

1. Which of the following elements of business environment is shaped by beliefs and customs of people?

(a) Legal Environment

(b) Economic Environment

(c) Social Environment

(d) Political Environment

2. Which of the following is a feature of demonetization?

(a) Tax administration measure

(b) Channelizing savings into the formal financial system

(c) Development of less-cash economy

(d) All of the above

3. “The most common of these are Diet Coke, since more number of people has become fitness and health conscious .”Identify the related feature of
Business Environment

(a) Totality of external forces

(b) Dynamic nature

(c) Inter-relatedness

(d) Relativity

4. Which of the following is not a benefit of demonetization in India?

(a) Control over corruption

(b) Counterfeiting the use of high denomination notes for illegal activities
(c) Control on black money

(d) More demanding customers

5.Which of the following is not a feature of Business environment

(a) Interrelated Elements

(b) Dynamics

(c) Complexity

(d) Continuous

6. Which activity will be a futile exercise if it is not acted upon or implemented?

(a) Management

(b) Coordination

(c) Directing

(d) Planning.

7. Which of the following is not a benefit of planning?

(a) Planning reduces overlapping and wasteful activities.

(b) Planning is a mental exercise.

(c) Planning provides directions.

(d) Planning reduces the risks of uncertainty.

8. Rahim wanted to start with a stationery app to help students of schools and colleges to provide stationery to them. He felt that students were not able
to get the needed stationery easily and hence wanted to provide the stationery directly to students in the school. He listed out the various ways of setting
up this business and finally selected the best way to set up this business by developing an app. Suggest what should be the next step for him:

(a) Developing premises

(b) Identifying the alternative course of action.

(c) Implementation of the plan

(d) Follow-up action.

9. Rahul, sales executive of Mankind Pharma Ltd. put forth the idea of using artificial intelligence in the marketing of its products which will help in saving
time, cost, and energy for both ends. The marketing manager appreciated him but suggested continuing with the already-developed marketing strategy.
which limitation of planning is reflected in the above case.

(a) Planning is time-consuming

(b) Planning reduces creativity

(c) Planning leads to rigidity

(d)Planning does not guarantee success

10. For the following two statements choose the correct option:

Statement I: Planning is pervasive.

Statement II: Planning reduces creativity as it is usually made by top management and the rest of the members’ just implements these plans.

Choose the correct option from the options given below:

(a) Statement I is correct and II is wrong

(b) Statement II is correct and I am wrong

(c) Both statements are correct

(d) Both statements are incorrect

11. Identify & explain the various dimensions of business environment which relate to the above mentioned case.
[6]

The various dimensions of business mentioned case are outlined below:

(a) Political Environment: Political Environment includes political conditions such as general stability and peace in the country and specific attitudes that
elected government representatives hold towards business.

(b) Technological environment: Technological Environment includes forces relating to scientific improvements and innovations which provide new ways
of producing goods and services and new methods and techniques of operating a business

(c) Legal environment: Legal Environment includes various legislations passed by the Government administrative orders issued by government authori-
ties, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— Centre, State or Local.

(d) Social environment: Social Environment includes the social forces like customs and traditions, values, social trends, society‘s expectations from busi-
ness, etc.

(e) Economic Environment: Economic Environment comprises of factors that can affect management practices in a business enterprise includes interest
rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee etc.

12. (i) Identify Opportunities and get First Mover Advantage : Early identification of opportunities helps the firm to be the first to exploit them instead of
losing them to competitors. [4]

(ii) Identify Threats and Early Warning Signals : Environmental awareness can help managers to identify various threats on time and serve as an early
warning signals.

(iii) Tap Useful Resources: A business firm assembles various resources called inputs like finance, machines, raw materials, power and water, labour,
etc. from its environment.

(iv) Assist in Planning and Policy Formulation: Since business environment provides both opportunities and threats for the firm, its understanding and
analysis can be the basis for planning and policy formulation
(v) Help in Coping with Rapid Changes : Managers must understand and examine the environment and develop suitable courses of action to cope with
rapid changes in business environment.

13. 1. Name the function of management being discussed above. [1]

2. Also briefly discuss any two limitations of the function discussed in the case. [4]

. 1. Planning

2. The limitations of planning are described below:

(a) Planning may not work in a dynamic environment: The business environment is dynamic in nature. Every organisation has to constantly adapt itself
to changes in its environment in order to survive and grow. However, it is difficult to anticipate all the likely future changes in the environment with ut-
most accuracy. Hence, even with planning, everything cannot be foreseen.

(b) Planning reduces creativity: The top management undertakes planning of various activities whereas the other members are expected to merely im-
plement these plans. This restricts the creativity of the middle level managers as they are neither allowed to deviate from plans nor are they permitted to
act on their own.

14. Identify the function and state its steps in chronological order other than the one discussed in the above paragraph.
[5]

Planning. Steps in the process of Planning are: (i) Developing Premises which involves making assumptions about future, upon which plans are to be
withdrawn. (ii) Identifying alternative courses of action which may be used to achieve the set objectives. (iii) Evaluating alternative courses of action and
selecting the best alternative which involves scrutinizing the feasibility and consequences of each alternative before a choice is made. (iv) Implementing
the plan which involves seeing whether plans are put into action. (v) Follow up which involves seeing that activities are performed according to plans.

15. Explain, with examples, the difference between general and specific environment.[6]

The sum of all the forces (external, institutions and individuals) that are outside the control of a business organisation is referred to as the business envi-
ronment. The forces mentioned here can be of varied nature, such as social, economic, political, legal or technological.

Specific environment is said to be the external forces that play a role in functioning of an organisation directly. These forces are specific to a particular
organisation or an enterprise. Specific environment is unique to a industry and has an impact on how the day to day business is run. For example,
change in price of a raw material required for production will result in less demand and abundant supply of raw materials has a direct impact on the pro-
duction of the company.

General Environment comprises of all the forces that has an impact on all organisations irrespective of the type of industry. These forces do not differen-
tiate between the industries or types of business. They have a cumulative effect on the organisation’s performance. For example, a new technology for
communication will have a impact on the quality and quantity of production or if there is a change in government then it will have an effect on all organi-
sations.

16. If planning involves working out details for the future, why does it not ensure success?
[4]

True, planning is a forward-thinking function that is based on analysing and forecasting future aspects. However, the future is unpredictable and cannot
be foretold. External forces have a variety of effects on how an organisation operates. These natural forces are complicated and ever-changing. Social
trends, political situations, technology, and government rules and regulations, for example, all change on a regular basis.

Due to such uncertainties, it is impossible to predict the success rate of the plans; instead, the plans must be constantly adjusted to adapt to the chang-
ing environment.
Assume, for example, that a competitor's arrival diminishes demand for a company's products. The company had not anticipated such a change when
planning production. As a result, the company's earlier strategies fail, and it must devise new ones in light of the change in demand.

Similarly, imagine the government announces a loosening of the rules for foreign investment, resulting in increased market competitiveness. Domestic
enterprises' sales and manufacturing plans may collapse in the face of growing competition. Thus, despite the fact that planning entails working out de-
tails for the future, it does not guarantee success.

*** End of the paper ***