MBA 1st Year Introduction Micro Business Environment Short Question Answer Model Paper

MBA 1st Year Introduction Micro Macro Business Environment Short Question Answer Model Paper :- In this Post you will find MBA 1 year related to important questions related to the answer such as the Introduction Micro Business Environment Answer and many other important questions. Short Questions are answerer in section B

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Section B 

MBA 1st Year Introduction Micro Macro Business Environment Short Question Answer Model Paper
MBA 1st Year Introduction Micro Macro Business Environment Short Question Answer Model Paper

SHORT ANSWER QUESTIONS

Q.1. Explain the nature and scope of a business.

Ans. The word business technically means a state of being busy. Every person is engaged in some kind of occupation: a farmer works in the field, a worker works in the factory, a clerk does his office  work in an office, a teacher teaches in the class, esalesmdan busy in the selling  selling goods, an entrepreneur busy in running his factory. The primary activities relating to the production of goods of ser doing some work. All creative ary aim of all these persons is to earn their livelihood while isfving human wants are known as business. It is also a gainful procedure through winactivities relating to the production of goods or services for and groups exchange goods and services. Human activities may be categorised as economi economic.

Q.2. What are the objectives of a business?

Ans. Profit is not the only objective of business Every work is starte objective the objective is a goal, the achievement of which is a necessity and all efforts are concentrated for the fulfillment of it. According to Peter Drucker, objectives are needed in every area where performance results directly and vitally affect survival and prosperity of the business.

1. Profit Earning: It cannot be denied that business is started for earning profits. Profit is basic incentive to business pursuits. Profits are needed to face various uncertainties like trade cycle,change in demand pattern, fluctuations in money markets. A business needs profits not only for its existence but also for expansion and diversification. The investors want an adequate return on their investments, worker wants higher wages and the entrepreneur needs money for reinvesting.

2. Production of Goods: The profit can be earned only when some exchange of goods and services takes place. So the next objective is to produce more goods and sell them to the consumer.

3. Creating Markets: The aim of the businessman is to sell products. Marketing consists of these efforts which affect transfer in ownership of goods and care for their physical distribution.

4. Technological Improvement: A businessman should always strive to use latest methods of production. In the world of competition, everybody tries to sell his products by offering goods quality products at lower prices.

Q.3. Explain the relationship between business and environment.

Ans. Business environment is the interrelationship of all conditions, events and influences that surround and affect the business. Today, business is vitally affected by the economic, social, legal, technological and political factors which form the business environment. So, business environment is the total of all external forces that affect the organisation and the operations of business.

“Business environment is defined as the pattern of all external influences that affect its life and development.’

Business and environment are related to each other. They are a set of political, economic, social and technological forces that are largely outside the control and influence of a business and that can potentially have both a positive and a negative impact on the business.

A firm does not have much influence on the environment but the collective behaviour of diffe firms may affect the environment. The analysis of business environment shows that environ remains external to the firms. The internal dynamics of the firm are meant to adjust themselves external conditions, ie. the environment.

Thus, a business firm is a product of several environments and to survive, the firm musta itself to its environment as it occurs.

MBA 1st Year Introduction Micro Macro Business Environment Short Question Answer Model Paper

Q.4. Mention the salient features of business environment and state its importance. 

Or “Business environment plays a key role in the functioning of an organisation’. Discuss features of business environment. 

Ans. Salient Features of Business Environment 

1. Business environment is compound in nature consisting of events, conditions and influence arising from various sources. 

2. Business environment is dynamic as it keeps on changing with technological improvement 

3. Business environment is made up of social, economic, legal, cultural, technological and political factors. 

4. Business environment includes both specific and general forces that affect individual enterprises or firms either directly or indirectly. 

5. It is a relative concept as it differs from one country to another or from one region to another 

6. Business environment has both long-term and short-term impact, i.e. it has different effects on different firms within the same industry. 

7. The different factors of business environment are correlated and if there is a change in one factor, it affects the changes in other factors also. 

8. Business environment is made of economic, social, cultural, political and technological factors which are inter-dependable. 

9. Business environment is very uncertain as it is a difficult job to predict the happenings of the future mainly when frequent changes in environment are there. 

10. It is the sum total of all the factors that are available outside the business or over which there is no control of business. 

Importance of Business Environment: Refer to Sec-C, Q.6. 

Q.5. Differentiate between micro and macro environment. 

Ans. Difference between Micro and Macro Environment 

1. Micro environment is an operating environment which is close to business and affects its capacity to work whereas macro environment is a general environment that includes factors which create opportunities and threats to business units.

2. Micro environment is an internal environment of an organisation but macro environment is an external environment of an organisation.

3. In micro environment, marketer interacts with other functional economic scenario areas of the organisation whereas marketer interacts with the determines the prospects of elements prevailing outside the organisation in macro environment. business in a country.

4. Micro environment is less complex to perceive but macro

5. In micro environment, factors may be controlled to a large extent by marketers but factors remain beyond the control of marketers in macro environment. 

6. Micro environment remains comparatively independent in shaping marketing decisions but macro environment creates a huge impact on shaping marketing decisions. 

7. Factors reveal the capabilities of an organisation so as to exploit the opportunities that are created by the macro environment or to cope with the threat through its marketing activities in micro environment but factors may create opportunity or even pose a large number of threats to the marketing activities of an organisation. 

Thus, micro and macro environment differ in various respects.

Q.6. Explain the significance of business environment. Also explain financial environment.

Or Discuss the significance of the study of business environment in Indian context. 

Ans. Business environment refers to those factors surrounding a business which either influence or detemine its effectiveness. 

Significance of the Study of Business Environment 

Study of business environment is significant for a business enterprise to keep its surrounding environment. It has following significances: 

1. It helps in developing broad strategies and long-term policies of the firm.

2. It gives us information about changes taking place in the environment so that it can adjust itself accordingly. 

3. It is essential for the development of action plans to deal with technological ad 

4. It helps in the analysis of competitor strategies and the formulation of effective counter measures.

5. A business enterprise can go for expansion drive, when favourable changes environment. 

6. Knowledge about changing environment keens the organisation flexible and dynamics in its approach.

7. It enables us to visualise the  impact of the socio-economic changes and accordingly make necessary adjustments.

Glucck and jaurch stressed, ‘Environmental analysis and diagnosis give strategists, time to anticipate opportunities and plan to take optimal responses to these opportunities. It also help strategists to develop an early warning system to prevent threats or to develop strategies which can pose a threat to firm’s advantages.’ It is undoubtedly true that firms which systematically diagnose the environment are more effective than those which don’t.

Financial Environment

Financial environment refers to all the financial institutions and markets lying around the company which affect the working of that company. It deals with the monetary transactions based on money, time and risk. This environment can exist anywhere so long as the major players exist in the economy.

This environment sets the basis of developmental activity of a country and the business system. There are various elements which make up this environment, some of which are:

1.  Reserve Bank of India (RBI).

2. Health and vision of the commercial banks.

3. Presence and focus of the developmental banks.

4. Non-banking financial institutions

5. Interest rates prevailing recently. 

6. Policies governing disbursement of loans.

Thus, financial environment is the most important part of business environment and with its Cooperation only. industries can progress further. It is required for the development and growth of usiness, industry and economy. Financial markets that are a part of this environment provide facility

the interaction of demand and requirements while financial institutions facilitate the allocation of funds in an efficient manner.

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