Political Environment

Q.

Company X is facing a lot of problems these days. It manufactures white goods like washing machines, microwaves, refrigerators, and air conditioners. The company's margins are under pressure and the profits and market share are declining. The production department blames the marketing department for not meeting sales targets and marketing blames production department for producing goods, which are neither of good quality nor meeting, customers expectations. The finance department blames both the production and the marketing department for a declining return on investment and bad marketing.
Which quality of management do you think the company is lacking? Explain briefly. What steps should the company's management take to bring the company back on track?

Q.

Define political environment.

Q. The government of India announced Demonetization of ₹ 500 and ₹ 1, 000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1, 000 currency notes ceased to be legal tender from that date. New currency notes of the denomination of ₹ 500 and ₹ 2, 000 were issued by Reserve Bank of India after the announcement.

The step resulted in a substantial increases in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.

a. Enumerate the dimensions of business environment highlighted above.

b. State the features of Demonetization.

Q.

A company X Ltd. manufacturing cosmetics, which has enjoyed a pre-eminent position in a business, has grown in size. Its business was very good till 1991. But after that, a new liberalised environment has seen an entry of many MNC's in the sector.

With the result, the market share of X Ltd. has declined. The company had followed a very centralised business model with directors and divisional heads making even minor decisions. Before 1991, this business model had sewed the company very well as consumers have no choice. But now, the company is under pressure to reform.

What organisation structure changes should the company bring about in order to retain its market share?

Q.

________ refer to negative and unfavourable external factors that are likely to create hurdles for a firm.

Q.

Just after declaration of Lok Sabha Elections in the year 2009, the results, the Bombay Stock Exchange's price index rose by 2100 points in a day. Identify the environmental factor which led to this rise.

1. Social Environment

2. Political Environment

3. Technological Environment

4. Economic Environment

Q. Krishna Furnishers Mart started its operations in the year 1954 and emerged as the market leader in the industry because of their original designs and efficiency in operations. They had a steady demand for their products but over the years, they found their market share declining because of new entrants in the field. The firm decided to review their operations and decided that in order to meet the competition, they need to study and analyze the market trends and then design and develop their products accordingly. List any two impacts of changes in business environment on Krishna Furnishers Mart's operations. (Hint: increase in competition and Market orientation).

Q.

Identify a factor that does not play an important role in attracting FDI.

1. Language

2. Cost of resources

3. Administrative procedure and efficiency

4. Laws, rules and regulations

Q.

What is included in 'political environment' of business?

1. 1. Political System

   2. Changes in disposable income of people

2. 1. Political System

   2. Constitutional Framework

3. All of the above

4. 1. Political System

   2. Stock market indices

Q.

Conclusion of demonetisation in long process.

Q.

Just after the declaration of Lok Sabha Elections in 2014, the Bombay Stock Exchange Index rose by 1000 points. Identify the dimension of the business environment.

1. Political environment

2. Legal environment

3. Social environment

4. None of these

Q. Political environment deals with government actions which affects the operations of a company or a business.

1. False
2. True

Q.

Convertibility of rupee implies ?

Q.

Advertising of a product is a part of _________.

1. Strategy

2. Budget

3. Method

4. Rule

Q. Company X is facing a lot of problems these days. It manufactures white goods like washing machines, microwave ovens, refrigerators and air conditioners. The company’s margins are under pressure and the profits and market share are declining. The production department blames marketing for not meeting sales targets and marketing blames production department for producing goods, which are not of good quality meeting customers expectations. The finance department blames both production and marketing for declining return on investment and bad marketing.

What quality of management do you think the company is lacking? Explain briefly. What steps should the company management take to bring the company back on track?

Q. One Mark Questions:-
What is meant by 'Production on concept' of marketing?

Q.

Identify the dimension of business environment, in each of the following cases, and explain them.

(i) The project of Nano Car re-established in Gujarat.

(ii) Decrease in the repo rate to overcome recession.

(iii) Rise in the BSE price index, soon after the declaration of Lok Sabha Election 2014 results.

(iv) Increase in the number of working women.

(v) Prohibition of advertisement of alcoholic beverages on Doordarshan.

(vi) Demand for reservation for minorities in government jobs.

Q.

Mable Company is manufacturing health powders and chywanprash for domestic and export markets. Mable has enjoyed a substantial market shares and also has a loyal customer following. However, it has been facing problems because they haven’t been able to meet sales targets and the required customer satisfaction. Also, the health market in Indian has grown tremendously and new players have come with better technology and pricing thus causing problems for the company. Mable plans to revamp their controlling systems and take other steps necessary to rectify the problems they are facing.

(i) Identify the benefits Mable company will derive from a good control system?

(ii) How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented and targets attained?

(iii) Specify the steps in the control process that the company should follow to remove the problems it is facing?

(iv) What techniques of control can the company use?

Q.

How do you make a product mix?

Q.

There is a growing competition in the market of electronics, due to technological advancement and ever-increasing demand of households. As a result, ABC Ltd. is facing the problem of a decline in market share. In order to combat competition, the company plans to introduce new models with added features and technological advancements.

(i) How will you seek to remove the problem of ABC Ltd.?

(ii) Identify the missing values in the above case.

Q. environment influences the general stability and peace in the country.

1. Social
2. Legal
3. Political
4. Economic

Q.

“Difficulty in doing business by foreign companies because of strict rules and regulations”.
dimension of business is reflected in the above statement.

1. Social
2. Political
3. Legal
4. Economic

Q. A decrease in import due to trade restrictions affects the environment of a business.

1. Legal
2. Economic
3. Political
4. Social

Q. As per the newspaper reports, the RBI is planning to introduce "Plastic Currency Notes". What is/are the benefits of "Plastic Notes"?
A. Their shelflife will be longer.
B. It will replace plastic money or credit, debit cards which are giving birth to many fraudulent practices.
C. Printing will be cheaper.

1. Only (C)
2. Only (B)
3. Only (A)
4. All (A), (B) and (C)

Q.

After change in government policy, it is necessary for firms to adapt to the market orientation technique.

1. True

2. False

Q.

Demonetisation occurs when there is a change in ___ by the government.

1. Currency

2. Economy

3. Policies

4. None of these

Q.

Which is not a characteristic feature of the business environment?

Q.

In which year did India face its first demonetisation?

1. To combat black money.

2. To create digital India

3. To eradicate poverty

4. To improve foreign exchange

Q. ________ are generally more uncontrollable than micro environment factors.

1. Macro factors
2. Micro factors
3. Non-business factors
4. Estimated factors

Q.

NSE Indices	Word Markets
Index	Current	Prev.	% CHG	Index	Current	Prev.	% Change
S&P CNX Nifty	3641.1	3770.55	-3.43%	NYSE Composite	8926.88	9120.93	-2.13%
CNX Nifty Junior	6458.55	6634.85	-2.66%	NASDAQ Composite	2350.57	2402.29	-2.15%
CNX IT	5100.5	5314.05	-4.02%	DOW Jones I. A.	12076	12318.6	-1.97%
Bank Nifty	5039.05	5251.55	-4.05%	S & P 500	1377.95	1406.6	-2.04%
CNX 100	3519.35	3540.35	-3.32%	Nikkei 225	16676.9	17178.8	-2.92%
More

The above figures are taken from the website of national stock exchange of India. They illustrate the movement of NSE stock indices as well as world stock indices on the date indicated.

Questions

1. What do you mean by a stock index? How is it calculated?

2. What conclusions can you draw from the various movements of NSE stock indices?

3. What factors affect the movement of stock indices? Elaborate on the nature of these factors.

4. What relationship do you see between the movement of indices in world markets and NSE indices?

5. Give details of all the indices mentioned above. You can find information on the web or business magazines.