CA FOUNDATION PAPER - 4 (BUSINESS AND COMMERCIAL KNOWLEDGE) 500+ MCQs
CHAPTER - 2 BUSINESS ENVIRONMENT MOST IMPORTANT OBJECTIVE QUESTIONS
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1. Organizations depend upon which environment for Input:
-
(a) Technological Environment
(b) Social-Economic Environment
(c) External Environment
(d) Legal Environment
2. What is the single word that can best describe today's business?
-
(a) Technology
(b) Persistence
(c) Profit making
(d) Change
3. A business is created to provide:
-
(a) Products to Customers
(b) Services to Customers
(c) Employment opportunities
(d) All of the above
4. In order to survive over the long term, a company must have the:
-
(a) Ability to Prosper
(b) Ability to change
(c) Both (a) and (b)
(d) None of the above
5. As per Charles Darwin, who survives?
-
(a) Strongest
(b) Most Intelligent
(c) Most responsive to change
(d) All of the above
6. Which one of the following is not true about business?
-
(a) It is created to provide products or services to customers.
(b) It creates job opportunities.
(c) It is beneficial to Society.
(d) It always gives return on investment.
7. Read the following three statements:
(i) The environment is constantly changing in nature.
(ii) Various environmental constituents exist in isolation and do not interact with each other.
(iii) The environment has a far reaching impact on organizations.
From the combinations given below select an alternative that represents statements that are true:
(i) The environment is constantly changing in nature.
(ii) Various environmental constituents exist in isolation and do not interact with each other.
(iii) The environment has a far reaching impact on organizations.
From the combinations given below select an alternative that represents statements that are true:
-
(a) (i) and (ii).
(b) (ii) and (iii)
(c) (i) and (iii)
(d) (i), (ii) and (ii)
8. Which one of following is not true about Business Environment?
-
(a) It represents all external forces, factors or conditions that exert same degree of impact on business decisions.
(b) The success of business is affected by business environment.
(c) The business must continuously monitor and adapt itself to the environment.
(d) It includes internal forces only.
9. The integral elements of business environment include.
-
(a) Internal forces
(b) External Forces
(c) Both (a) and (b)
(d) Either (a) or (b)
10. As per Traditional authors, the integral elements of business environment include:
-
(a) Internal forces only
(b) External forces only
(c) Internal & External forces
(d) Internal or External Forces
11. In order to Survive and proposer a business:
I. Must Continuously monitor
II. Must adapt itself to the environment
III. Must Concentrate on its weakness only
IV. Must Concentrate on its Strength only.
II. Must adapt itself to the environment
III. Must Concentrate on its weakness only
IV. Must Concentrate on its Strength only.
-
(a) I
(b) I and II
(c) II and III
(d) III and IV
Characteristics of Business Environment
12. What is not a characteristic of business environment?
-
(a) Static
(b) Complex
(c) Far reaching
(d) Multi-faced
13. Which of the following are not characteristics of business environment:
-
(a) Complex
(b) Dynamic
(c) Single Faceted
(d) Far reaching impact
14. Which is not a feature of business environment?
-
(a) Simple
(b) Complex
(c) Multi fact
(d) Dynamic
15. It is easy to understand the business environment in parts but difficult to grasp in totality Therefore, Business Environment is.
-
(a) Complex
(b) Dynamic
(c) Multi-faceted
(d) Far Reaching impact
16. Now-a-days, the film industry generates revenue from ring tones/caller tunes rather than sale of music C.D. It exhibits________ feature of business environment
-
(a) Complex
(b) Dynamic
(c) Multi-faceted
(d) Far Reaching impact
17. An organisation like Aditya Birla Group has moved from textile to cement, to retail and to financial services as well as telecom due to changing circumstances. This example is related with feature of Business Environment.
-
(a) Complex
(b) Dynamic
(c) Multi-faceted
(d) Far Reaching impact
Importance of Business Environment
18. There is _________ interaction between Business and Business Environment.
-
(a) Close
(b) Close and continuous
(c) Close and static
(d) Continuous and Static
19. The interaction between Business and its Environment, helps the business in:
-
(a) Determining Opportunities and Threats
(b) Continuous learning
(c) Giving directions for growth
(d) All of the above.
20 In relation to solving the problem of shortage of Electricity, "CPP" means:
-
(a) Captive Power Plant
(b) Creative Power Plant
(c) Central Power Plant
(d) Controlled Power Plant
21. The interaction between Business and Environment brings out:
-
(a) Opportunities for the business
(b) Threats to the business
(c) Opportunities for and Threats to the business
(d) Complex and Dynamic analysis.
22. Which one of the following is not an advantage of Business Environment to the business?
-
(a) Determination of Opportunities & Threats
(b) Meeting Competition
(c) Image Building
(d) Identification of financial needs.
Relationship between organisations and its Environment
23. Relationship between organisation and environment can be described through:
-
(a) Exchange of information
(b) Exchange of resources
(c) Exchange of influence and power
(d) All of the above
24. Which one of the following is the major areas as regards interaction of organisation and its environment?
-
(a) Exchange of Information
(b) Exchange of Resources
(c) Exchange of influence power
(d) All of the above.
25. The nature of relationship between the organization and the Environment depends upon:
I Size of organisation
II Age of organisation
III Nature of Business
IV Nature of ownership
V Degree of Professionalization of management.
I Size of organisation
II Age of organisation
III Nature of Business
IV Nature of ownership
V Degree of Professionalization of management.
-
(a) I and II
(b) I, II and III
(c) I, II,III & IV
(d) I, II, II, IV & V
26. Which one of the following is not true about External Environment?
-
(a) It offers opportunities
(b) It offers limitations also.
(c) It creates pressures & threats
(d) It never affects small business.
27. Which one of the following Companies is affected by FMCG Company 'Patanjali' endorsed by Baba Ramdev?
-
(a) Hindustan Unilever Ltd.
(b) P&G Ltd.
(c) Dabur Ltd.
(d) Bajaj Auto Ltd.
28. In relation to resources, "5M" represents:
-
(a) Men, Money, Method, Machine and Material
(b) Management, Motivation, Money Machine and Material
(c) Morale, Money, Method, Machine and Material
(d) Mobility, Method, Management, Machine and Material
29. In the relationship between organizations and its environment, there is exchange of:
-
(a) Information
(b) Resources
(c) Influence and Power
(d) All of the above.
30. Which one of the following Statement is incorrect?
-
(a) The organisation is dependent on the external environment for disposal of its output of products and services.
(b) The organisation scans the external environmental valuables.
(c) Apart from gathering in formability, the organization itself transmits information to several external agencies.
(d) The external environment offers strengths and weakness.
31. Which one of the following is organisations response to its Environment Organisations Response to its Environment
-
(a) Administrative
(b) Competitive
(c) Collective
(d) All of the above.
32. The formation or clarification of the organization's mission; the development of objectives, polices and budgets, etc are the examples of response of organisation to environment:
-
(a) Administrative
(b) Competitive
(c) Collective
(d) None of the above
33. The methods like bargaining, Contracting, Co-opting, creating joint ventures, etc. are related with___________ response of organisation to its environment.
-
(a) Administrative
(b) Competitive
(c) Collective
(d) Ministerial
34. In order to respond appropriately, the organizations must:
-
(a) Have the Capacity to monitor
(b) Make sense of their environment
(c) Identify and attend the environmental factors
(d) All of the above.
35. In order to sustain competitive advantage, organizations must achieve an external position vis-à-vis their competitors or perform internally in ways that is/are:
-
(a) Unique
(b) Valuable
(c) Difficult to imitate
(d) All of the above.
36. Which of the following statement is incorrect as regards organization's response to its environment?
-
(a) Organizations must have the capacity to monitor and make sense of their environments.
(b) Organizations must identify and attend to the environmental factors and features that all closely related to goal achievement and performance.
(c) Organizations must have the interval capacity to develop effective responses.
(d) Organisation can function ignoring the environment.
Environmental Influences on Business
37. In relation to a popular cold drink "Pepsi", which one of the following is not internal factor?
-
(a) Packaging
(b) Scheme & Promotion
(c) Distribution Networks
(d) Health Awareness
38. Which one of the following statement is incorrect?
-
(a) Business does not function in an isolated Vacuum.
(b) Business function within a whole gambit of relevant environment.
(c) Businesses have to negotiate their ways through it
(d) Business must monitor the environment periodically.
39. A Successful business has to the various opportunities and threats in its environment.
-
(a) Identify
(b) Identify and appraise
(c) Identify, appraise and respond to
(d) Identify, appraise, suggest and respond to.
40. Apart from the natural environment, environment of humans include:
-
(a) Family
(b) Friends and peers
(c) Neighbours and society
(d) All of the above.
41. Which of the following is/are included in man-made structures within an environment?
-
(a) Buildings and Roads
(b) Furniture
(c) Other Physical infrastructure
(d) All of the above
42. Different organizations use different inputs & produce different outputs. The input-output exchange activity is.
-
(a) Different for organizations
(b) A continuous process
(c) It calls for an active interaction with the external environment
(d) All of the above
43. Business functions as a part of broader environment. Business converts resources through various processes. This exchange process may bring_______
-
(a) Profits
(b) Reputation
(c) Good Public Image
(d) Any of the above
44. In an attempt to identify a framework for understanding the environment of organizations, various steps are required.
I Explicit Consideration of immediate environment
II To Check the nature (Static/ Simple/Complex)
III Auditing of environmental influences.
I Explicit Consideration of immediate environment
II To Check the nature (Static/ Simple/Complex)
III Auditing of environmental influences.
-
(a) I , II & III
(b) I , III & II
(c) II, III and I
(d) III, II and I
Environmental Analysis
45. Environmental Analysis helps in:
-
(a) Providing input for strategic decision making
(b) Turning threat's to firms advantage
(c) Anticipate opportunities and to take optimal responses
(d) All of the above
46. Business Environment analysis help in:
-
(a) Give directions for growth
(b) Determining opportunities and threats
(c) Image building
(d) All of the above.
47. Which of the following is not the basic goal of environmental Analysis?
-
(a) Understanding of Current and potential changes taking place in the environment.
(b) Provide inputs for strategic decision making.
(c) Facilitate and foster strategic thinking in organization
(d) Provide the internal strengths of the organisation.
48. When the company does not react to the demands of the environment by changing its Strategy, the result is:
-
(a) Declining performance of the Company
(b) Forgoing of opportunities avail able
(c) Ignoring the treats to the firm.
(d) All of the above
49. Which of the following signifies the utility of Environmental analysis?
-
(a) It gives the time to strategists to anticipate the opportunities
(b) The strategists can plan to take optional response to the opportunities.
(c) Strategists can develop an early warning system to prevent threats.
(d) All of the above
50. Select the correct statement out of the following:
-
(a) Environmental factors are totally beyond the control of a single industrial enterprise
(b) Environmental factors are largely beyond the control of a single industrial enterprise.
(c) Environmental factors are totally within the control of a single industrial enterprise.
(d) None of the above.
51. Analyzing process of change in the business environment involves conceptualizing its as:
-
(a) Complex
(b) Static
(c) Dynamic
(d) Diverse
Environmental Scanning
52. ________is the process by which organisations monitor their relevant environment to identify opportunities and threats affecting their business for the purpose of taking strategic decisions.
-
(a) Forecasting
(b) Assessment
(c) Scanning
(d) None of the above
53. Environmental Scanning must identify.
-
(a) Threats existing in the environment
(b) Opportunities existing in the environment
(c) Threats and opportunities existing in the environment
(d) Threats, Opportunities, Strengths and Weaknesses.
54. In environmental scanning, the factor ________ represents certain happening in the internal or external organizational environment which can be observed and tracked.
-
(a) Events
(b) Trends
(c) Issues
(d) Expectations
55. __________ is important and specific occurrence taking place in different environmental sectors.
-
(a) Events
(b) Trends
(c) Issues
(d) Expectations
56. Trends relate to:
-
(a) Happening of events in internal Environment
(b) Grouping of similar or related events
(c) Demands made by Interested group
(d) None of the above
57. ___________are the general tendencies or the causes of action along which events take place.
-
(a) Events
(b) Probability
(c) Trends
(d) Directions
58. The demands made by interested groups in the light of their concern for Issues that arise in response to events and trends is called as____________
-
(a) Appraisal
(b) Evaluation
(c) Observation
(d) Expectations
59. The businesses should continuously _______and ________to the environment if it is to service and prosper.
-
(a) Identify, appraise
(b) Monitor, adapt
(c) Identify, monitor
(d) Monitor, appraise
60. Which one of the following is not a factor which need to be considered for environmental scanning?
-
(a) Events
(b) Trends
(c) Issues
(d) Strategy
61. Perceiving the needs of the external environment and catering to them, sat- isfying the expectations and demands of the clientele groups is:
-
(a) Reciprocal agreement
(b) Interdependent process
(c) Management process
(d) Interaction process
62. Which of the following is a part of process of Scanning?
-
(a) Scanning Strategic
(b) Perceived Environment Change
(c) Strategic change
(d) All of the above
Components of Business Environment
63. A threat is
-
(a) An unfavourable condition in organization environment which creates risk or damage to the Environment
(b) An inherent limitation or constraint
(c) An unfavourable condition in organization environment which consolidates its strength
(d) None of the above
64. Internal Environment includes
-
(a) Demography
(b) Customer
(c) Economic
(d) Mission and Objective
65. Opportunity is
-
(a) Inherent Capacity
(b) Strategic disadvantage
(c) Favourable condition
(d) None of the above
66. SWOT stands for:
-
(a) Strength, Weakness, Opportunity, Threats
(b) Strong, Weak, occurring, Things
(c) Strong, Weak, Occurring, Things
(d) Strength. Weak, Opportunity, Things
67. Through SWOT analysis
-
(a) Strengths and weakness existing within the environment can be matched with opportunities and threats in the organisation.
(b) Strengths and weakness existing outside the organisation can be matched with opportunities and threats with the internal environment
(c) Strengths and weakness existing outside the organisation can be matched with opportunities and threats with the external environment
(d) Strengths and weakness existing within an organisation can be matched with opportunities and threats in the environment
'
68. Which one of the following is not a part of interval Environment?
-
(a) Value System
(b) Mission and objectives
(c) Customers
(d) Labour Union
69. The Micro Environment of external Environment includes:
-
(a) Market
(b) Technological
(c) Demographic
(d) Economic
70. The interval environment of business organisation is composed of multiple elements existing within the organisation. It includes:
-
(a) Management
(b) Current Employees
(c) Corporate Culture
(d) All of the above
71. The Micro and Macro environment are the major types of:
-
(a) Interval Environment
(b) External Environment
(c) Both Internal and External environment
(d) Business Environment.
72. The growing demand for the products or services, that a company provides, may be regarded as:
-
(a) Opportunity
(b) Strength
(c) Weakness
(d) Threat
73. The emergence of strong new competitors who are likely to offer stiff competition to the existing Companies in an industry is an example of:
-
(a) Threat
(b) Weakness
(c) Problem
(d) Hurdle
74. A Company is having superior re- search and development skills which can be used for new product development so that the Company gains competitive advantage. It is an example of:
-
(a) Potential
(b) Strength
(c) Competitive advantage
(d) Strong Capabilities
75. Process of strategy formulation starts with:
-
(a) Appraisal of external and internal environment of the of an organisation
(b) Performance analysis
(c) Choice of strategy
(d) None of the above
76. A ___________is inherent capacity which an organisation can use to gain strategic advantage over it's competitors.
-
(a) Strength
(b) Opportunities
(c) Threat
(d) Weakness
77. An understanding of the external and internal environment is crucial for ___________of any organisation. the
-
(a) Existence
(b) Growth
(c) Profitability
(d) All of the above
78. The opportunities and threats operate in ___________environment
-
(a) Internal
(b) External
(c) Internal and External
(d) Micro
79. An organization should use it's _________to minimize impact of_________
-
(a) Strengths, weakness
(b) Opportunities, weakness
(c) Strengths,Threats
(d) Opportunities, Threats
Micro Environment
80. According to __________ the aim of the business is to create and retain customer.
-
(a) Peter Drucker
(b) Adam Smith
(c) Henry Ford
(d) Schumpeter
81. _____________ have a vested interest in the well-being of the company.
-
(a) Shareholder
(b) Directors
(c) Owner
(d) Employees
82. Cost structure of an industry is effected by ____________ own bargaining power.
-
(a) Organizations
(b) Suppliers
(c) Consumer
(d) Intermediary
83. All are elements of micro environment except:
-
(a) Consumer.
(b) Suppliers.
(c) Competitors.
(d) Society.
84. Competition brings direct benefit to
-
(a) Customers
(b) Suppliers
(c) Government
(d) Intermediaries
85. Competition is beneficial to the competing firms besides benefiting the__________
-
(a) Intermediaries
(b) Customers
(c) Producers
(d) Financiers
86. The market is larger than customers. The market is to be studied in terms of.
-
(a) Actual and potential size
(b) Growth prospect
(c) Attractiveness
(d) All of the above.
87. The price sensitivity of the market is an important factor of which element of Micro environment:
-
(a) Suppliers
(b) Market
(c) Intermediaries
(d) Customer
88.___________ exert a considerable influence on the business organisations. They are the ones who act as a bridge between the manufacture and the marketer.
-
(a) Customers
(b) Intermediaries
(c) Suppliers
(d) Organisation.
89. The performance of business in the private sector is measured by:
-
(a) Profitability
(b) Customer Satisfaction
(c) Number of employees
(d) The salary of BOD
90. Environment which is close to business and affect its capacity to work is known as__________ environment.
-
(a) Micro
(b) Macro
(c) Internal
(d) External
91. __________is also known as the task environment and affects business and marketing in the daily operating level.
-
(a) Micro Environment
(b) Macro Environment
(c) Mini Environment
(d) Internal Environment
92. The non-specific elements of the organisations surroundings that may affect its activities are;
-
(a) Customers suppliers and employees
(b) Supplier, owners, employees
(c) Owners, Board of Directors and Employees
(d) Customers Intermediaries Suppliers.
93.___________with their own bargaining power affect the cost structure of the industry.
-
(a) Intermediaries
(b) Suppliers
(c) Consumer
(d) Government
94. Who has given the preposition, "we have met the enemy and he is us"?
-
(a) Pogo
(b) Drucker
(c) Kotler
(c) None of these
95. All are elements of macro environment except:
-
(a) Society.
(b) Government
(c) Competitors
(d) Technology.
96. Macro Environment includes
-
(a) Strength
(b) Weakness
(c) Opportunity
(d) All of the above
97. Which of the following is not a part of the economic environment?
-
(a) Market and trade cycles
(b) Consumer buying patterns
(c) Strength of consumer spending
(d) Interest and exchange rates
98. Which of the following factor affects the economic environment?
-
(a) Economic System
(b) Economic Condition
(c) Economic Policies
(d) All of the above
99. of the government covers all those principles, polices rules, regulations and procedures which direct and control the industrial enterprises of the country and shape the pattern of Industrial development
-
(a) Industrial Policy
(b) Monetary Policy
(c) Investment Policy
(d) Generic Policy
100. Demographic environment relates to:
-
(a) Characteristics of population in an area, district, country or in the World.
(b) Influence almost all enterprises in a similar manner.
(c) Influence almost all enterprises in a similar manner.
(d) Positive and negative impact of significant international event.
101. Which of the following statement is not a factor influencing socio-cultural environment:
-
(a) Family structure and changes in it, attitude towards and within the family, and family values.
(b) Educational levels, awareness and consciousness of rights, and work ethics of members of society.
(c) Opportunities arising out of technological innovation.
(d) Role of women in society, position of children and adolescents in family and society.
102. Business and technology are:
-
(a) Interrelated
(b) Interdependent
(c) Interrelated & Interdependent
(d) None of the above
103. Which of the following is not a factor of Demographic Environment?
-
(a) Ethnic Mix
(b) Legal
(c) Population size
(d) Geographic Distribution
104. The Fiscal Policy includes government policy in respect of:
-
(a) Public Expenditure
(b) Taxation
(c) Public Debt
(d) All of the above
105. The important elements in political-legal environment are:
-
(a) Government, legal and economical
(b) Government, legal and political
(c) Technological,legal and economical
(d) Government, technological and legal
106. The environment refers to the nature and direction of the economy in which a company competes or may compete.
-
(a) Sociocultural
(b) Internal
(c) Micro
(d) Economic
107. The Central Government has introduced new GST law which has Influenced most of the business. It is related with which of the following elements of Macro environment?
-
(a) Demographic
(b) Economic
(c) Political-Legal
(d) Sociocultural
108. Study of human population is called as environment.
-
(a) Political
(b) Demographic.
(c) Global
(d) Economic
109. Which of the following is a factor of Demographic Environment?
-
(a) Population size
(b) Geographic Distribution
(c) Ethnic Mix
(d) All of the above
110. Which one of the following Statement is incorrect?
-
(a) Customers are the people who pay money to acquire an organisations products
(b) The organisations cannot survive without customers
(c) Consumer is one who ultimately Consumes or uses the product or service.
(d) Customer is always a Consumer.
PESTLE Analysis
111. In the PEST framework for environmental analysis what does the letter E stand for?
-
(a) Ecological
(b) Economic
(c) Ethical
(d) Educational
112. The two E's in PESTLE stands for:
-
(a) Economic and Environment
(b) Endless and Economic
(c) Entry and Exist
(d) End and Exit
113. The term PESTLE analysis is used to describe a framework for analyzing:
-
(a) Macro Environment
(b) Micro Environment
(c) Both Macro and Micro Environment
(d) None of above
114. Which of the following factor is not included in Traditional model "PEST" available for environmental monitoring?
-
(a) Political and Legal
(b) Economic and Environmental
(c) Legal and environmental
(d) Economic and Legal
115. PESTLE analysis does not include
-
(a) Legal
(b) Economic
(c) Technology
(d) Policy