Class 12 Business Studies - Chapter Business Environment NCERT Solutions | Why it is important for business enterpr
Why it is important for business enterprises to understand their environment? Explain.
Understanding the business environment is important for the business enterprise because it provides a lot of benefits to the businessman. Following are the benefits of understanding business environment:
1. It enables the firm to identify opportunities and get the first mover advantage: Environment provides numerous opportunities for business success. Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing them to competitors.
2. It helps the firm to identify threats and early warning signals: Threats means external environmental changes that hinder the performance of the firm. And proper awareness of the business environment helps the manager to identify the threats on time and then they can prepare themselves to meet the threats.
3. It helps in tapping useful resources: Environment is a source of various resources for running a business and it provides inputs to the business like finance, machines, raw materials, power, and water, labour etc. Every enterprise depends on the environment as a source of inputs or resources and in return the enterprise supplies outputs such as goods and services. And for that enterprise designs policies that allow it to get resources that it needs so that it can convert those resources into outputs that the environment desires.
4. It helps in coping with rapid changes: Business environment is dynamic in nature and changes are taking place at a fast pace. And to cope effectively with the changes managers must understand and examine the environment and develop suitable courses of action.
5. It helps in assisting in planning and policy formulation: Environment is a source of both opportunities and threats for the business enterprise. And its understanding and analyzing helps them to decide future course of action or training guidelines for making policies to deal with the present situation.
6. It helps in improving performance: The future of the business is bound with what is happening in the environment. And a continuous monitor to the environment helps to adopt suitable business policies and practices which not only improve the performance of the business but also continue to succeed in the market for long terms.
More Questions From Class 12 Business Studies - Chapter Business Environment
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How would you characterize the business environment? Explain with examples, the difference between general and specific environment.
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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.
This step resulted in a substantial increase 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 the business environment highlighted above.
b. State the features of Demonetization. - Q:-
National Digital Library of India (NDL India) is a pilot project initiated by the HRD ministry. It works towards developing a framework of virtual repository of learning resources with a single-window search facility. It provides support to all academic levels including researchers, life-long learners and differently-abled learners free of cost. State the dimensions of business environment highlighted above.
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How would you argue that the success of a business enterprise is significantly influenced by its environment?
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Briefly discuss the impact of Government policy changes on business and industry.
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What are the essential features of:
a. Liberalisation,
b. Privatization and
c. Globalisation? - Q:-
What economic changes were initiated by the Government under the Industrial Policy, 1991? What impact have these changes made on business and industry?
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How does understanding of business environment help in improving performance of a business?
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Give an example to show that a business firm operates within numerous inter related factors constituting the business environment.(Hint: example highlighting the inter relatedness of dimensions of business environment).
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State the impact of demonetization on interest rates, private wealth and real estate.
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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. State the quality of management that the company is lacking? 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?
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(Further information related to the above question 6) The management of company Bhasin Limited now realised its folly. In order to rectify the situation it appointed a management consultant -Mukti Consultants - to recommend a restructure plan to bring the company back on the rails. Mukti Consultants undertook a study of the production process at the plant of the company Bhasin Limited and recommended the following changes —
• The company should introduce scientific management with regard to production.
• Production Planning including routing, scheduling, dispatching and feedback should be implemented.
• In order to separate planning from operational management ’Functional foremanship’ should be introduced.
• ‘Work study’ should be undertaken to optimise the use of resources.
• ‘Standardisation’ of all activities should be implemented to increase efficiency and accountability.
• To motivate the workers ‘Differential Piece Rate System’ should be implemented.
(The above changes should be introduced apart from the steps recommended as an answer to Part c - case problem 6 above.) It was expected that the changes will bring about a radical transformation in the working of the company and it will regain its pristine glory.
a. Do you think that introduction of scientific management as recommended by M consultants will result in intended outcome?
b. What precautions should the company undertake to implement the changes?
c. Give your answer with regard to each technique separately as enunciated in points 1 through 6 in the case problem.
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