Class 12 Business Studies - Chapter Business Environment NCERT Solutions | What are the essential features of: a.
What are the essential features of:
a. Liberalisation,
b. Privatization and
c. Globalisation?
a) Liberalization
Liberalization means to liberate industry from the shackles of the licensing system. The economic reforms that were introduced were aimed at liberalizing the Indian business and industry from all unnecessary controls and restrictions. Liberalization signalled the end of the license permit quota and other restrictions that were put on the industries before 1991.
The essential features of liberalization are:
1. It stresses freedom of business and industry from unnecessary controls and restrictions of the government.
2. Emphasis was laid on simplifying export and import procedures.
3. Restrictions on the movement of goods and services were removed. 4) Public sector enterprises were dereserved.
b) Privatization
Privatization means to drastically reduce the role of the public sector. It refers to transfer of ownership, management and control of the public sector to the private sector. And to achieve this government adopted disinvestment of the public sector and referred the loss making and sick enterprises to the Board of industrial and Financial Reconstruction.
The essential features of privatization are:
1. It stresses the induction of private ownership, management and control in the public sector.
2. There was a significant reduction in the role of public sector enterprises for economic growth.
3. BIFR (Board on Industrial and Financial Reconstruction) was established for revival of loss making and sick enterprises.
4. Disinvestment of the public sector took place at a significant rate. Disinvestment means the process of sale of public sector enterprises to the private sector.
c) Globalization
Globalization means to encourage foreign private participation in India’s industrial development. It refers to integration of the various economies of the world leading towards the emerging of a cohesive or interconnected global economy. It also implies reducing the restrictions on the import and export such as licensing and tariffs.
The essential features of Globalization are:
1. It stresses the integration of domestic economies into a cohesive or interconnected global economy.
2. Licensing was abolished for imports.
3. The share of foreign equity participation was increased.
4. Foreign Investment Promotion Board (FIPB) was set up to promote foreign investments in India.
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:-
Why it is important for business enterprises to understand their environment? Explain.
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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 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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‘Bhasin’ limited was engaged in the business of food processing and selling its products under a popular brand. Lately the business was expanding due to good quality and reasonable prices. Also with more people working the market for processed food was increasing. New players were also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the subordinates had to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage. The workers were becoming indisciplined. The spirit of teamwork, which had characterized the company, previously was beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share was on the verge of decrease. Actually the company had implemented changes without creating the required infrastructure.
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