BUSINESS ENVIRONMENT IIBMS EXAM ANSWERS

BUSINESS ENVIRONMENT IIBMS EXAM ANSWERS

FOR ALL IIBMS EXAM ANSWER SHEETS CONTACT:
DR. PRASANTH BE BBA MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
Business Environment

Note: Attempt any five questions (question no. 1. is compulsory)

1. Attempt any four of the following questions:

(a) Explain the relevance of ecological issues to business environment.

 ANSWER
Ecological environment refers to all living and non living thing around us within which we live and work. People have a two way relationship with the ecological environment. An individual lives and work is affected by the ecological environment he or she lives in. At the same time ecological environment gets affected by the people in it.
Relevance of ecological environment on the business is very similar to it relevance to individual. After all, business can be considered as the activities of of people organized in bigger group. The activities of an average business is carried out on much larger scale than an average individual. Thus business and ecological environment influence each other in much bigger way than individuals.
In recent years the business activities, particularly the ones involving intensive use of energy, release of harmful effluents, and using harmful substances are threatening to damage our environment irreversible to a state in which life itself will become unbearable for human beings because of phenomenon like global warming.
Industrialization in general involves, urbanization. This not only changes the life of people because of living in urban areas but also causes deforestation.
Some industry such as paper and furniture are fast destroying the substantially depleted forests. This has not only contributed to global warming, but also destroyed many varieties of flora and fauna.
Of course there scan be a positive side of business also. business can, because of its economic power and its relationship with its employees, customers and other stakeholders, play an important part in protecting and improve our ecological environment.



(b) Analyze the social responsibility of business towards employees.



(c) State the basic objectives of regulating business.


Regulation means providing rules and frameworks for business and other activity. Some aspects of business activity are self-regulating - for example the Advertising Standards Authority provides a voluntary code of practice for the regulation of advertising in this country. However, in many areas it is important to establish some form of compulsory regulation backed up by legal sanctions such as fines, and even prison sentences for directors (and employees) for malpractice.

Today we are bound by European Union regulations which are directly binding on all Member States without the need for national legislation to put them in place.
Regulation takes place:

• to guarantee minimum standards e.g. of consumer protection, health and safety at work etc
• to protect the weak against the strong e.g. small companies against larger companies or groups of companies that work together to fix prices
• to provide benchmarks of good practice for business to set as minimum standards
• to provide an appropriate framework for ethical business behaviour
• to create standards where none exist.

In a number of industries that were formerly under government control, regulators have been appointed to make sure that prices are fair, and that there are no restrictive practices carried out by the newly privatised businesses that operate in these markets e.g. OFWAT is the official regulator for the water industry.



(d) Describe the basic instruments of fiscal policy in lndia
 ANSWER
Some of the major instruments of fiscal policy are as follows: A. Budget B. Taxation C. Public Expenditure D. Public Works E. Public Debt.

1. Budget:

The budget of a nation is a useful instrument to assess the fluctuations in an economy.

1. Taxation:

Taxation is a powerful instrument of fiscal policy in the hands of public authorities which greatly effect the changes in disposable income, consumption and investment. An anti- depression tax policy increases disposable income of the individual, promotes consumption and investment. Obviously, there will be more funds with the people for consumption and investment purposes at the time of tax reduction.
This will ultimately result in the increase in spending activities i.e. it will tend to increase effective demand and reduce the deflationary gap. In this regard, sometimes, it is suggested to reduce the rates of commodity taxes like excise duties, sales tax and import duty. As a result of these tax concessions, consumption is promoted. Economists like Hansen and Musgrave, with their eye on raising private investment, have emphasized upon the reduction in corporate and personal income taxation to overcome contractionary tendencies in the economy.

1. Public Expenditure:

The active participation of the government in economic activity has brought public spending to the front line among the fiscal tools. The appropriate variation in public expenditure can have more direct effect upon the level of economic activity than even taxes. The increased public spending will have a multiple effect upon income, output and employment exactly in the same way as increased investment has its effect on them. Similarly, a reduction in public spending, can reduce the level of economic activity through the reverse operation of the government expenditure multiplier.

1. Public Works:

Keynes General Theory highlighted public works programme as the most significant anti-depression device. There are two forms of expenditure i.e., Public Works and ‘Transfer Payments. Public Works according to Prof. J.M. Clark, are durable goods, primarily fixed structure, produced by the government.
They include expenditures on public works as roads, rail tracks, schools, parks, buildings, airports, post offices, hospitals, irrigation canals etc. Transfer payments are the payments such like interest on public debt, subsidy, pension, relief payment, unemployment, insurance and social security benefits etc. The expenditure on capital assets (public works) is called capital expenditure.

2. Discuss how does the environment acts as a stimulant to business. Analyze why business often does little for physical environment preservation despite the fact that it is significant for business activity.

 ANSWER
A good environment is a constitutional right of the Indian Citizens. Environmental Protection has been given the constitutional status. Directive Principles of State Policy states that, it is the duty of the state to 'protect and improve the environment and to safeguard the forests and wildlife of the country'. It imposes Fundamental duty on every citizen 'to protect and improve the natural environment including forests, lakes, rivers and wildlife'. In India, the Ministry of Environment and Forests (MoEF) is the apex  administrative body for :- (i) regulating and ensuring environmental protection; (ii) formulating the environmental policy framework in the country; (iii) undertaking conservation & survey of flora, fauna, forests and wildlife; and (iv) planning, promotion, co-ordination and overseeing the implementation of environmental and forestry  programmes. The Ministry is also the Nodal agency in the country for the United Nations Environment Programme  (UNEP). The organizational structure of the Ministry covers number of Divisions, Directorate, Board, Subordinate Offices, Autonomous Institutions, and Public Sector Undertakings to assist it in achieving all these objectives. Besides, the responsibility for prevention and control of industrial pollution is primarily executed by the Central Pollution Control Board (CPCB) at the Central Level, which is a statutory authority, attached to the MoEF. The State Departmentsof Environment and State Pollution Control Boards are the designated agencies toperform this function at the State Level. Because of their impact on the environment, businesses have an obligation to try to mitigate the effects of their activities in an effort to protect the land and water resources. Many businesses act voluntarily to reduce their environmental impact. Industries that use or produce hazardous waste are mandated by law to regulate their businesses. In any case, reducing their environmental impact is a sensible approach to business that can have many benefits........................

3. Analyze the fourfold role of the government in business. Also explain in what respects the role of government has been redefined in lndia during the 1990s.

 ANSWER 
Though the government’s role has increased over time, the business community still enjoys considerable freedom. The government exercises its authority several ways.

The fourfold role of the government in business are

4. "The Industrial Policy of 1991 makes a clear departure from the Industrial Policy of 1956" Comment.

6. Describe the recent export promotion measures of the Government of India.