CS Foundation Business Environment MCQ Questions
Question 1.
Which of the following does not characterise the business environment?
(a) Uncertainty
(b) Relativity
(c) Employers
(d) Complexity
Answer:
(d) Complexity
Question 2.
Out of the following the main sets of forces mostly affecting organisations are:
(a) External stakeholders, management and staff.
(b) Existing and potential competitors, suppliers, customers and substitute products or service.
(c) General environmental factors, competitive forces, factors internal to the organisation and the interests of stakeholders.
(d) Government, competitors and consumers.
Answer:
(c) General environmental factors, competitive forces, factors internal to the organisation and the interests of stakeholders.
Question 3.
When we analyze the processes of change in the business environment it conceptualizing it as:
(a) Complex
(b) Static
(c) Dynamic
(d) Diverse
Answer:
(c) Dynamic
Question 4.
The key word that can be used to describe the basic economic problem that all societies face is:
(a) Selfishness
(b) Greed
(c) Inequality
(d) Scarcity
Answer:
(d) Scarcity
Question 5.
Out of the following statements which is most likely to be true:
(a) As incomes rise the demand for food items in general will fall
(b) As incomes rise the percentage of total income spent on food items in general tends to fall
(c) As incomes rise the percentage of total income spent on food items in general tends to rise
(d) As incomes rise total spending on food items in general will fall
Answer:
(d) As incomes rise total spending on food items in general will fall
Question 6.
Appropriate Technology
(a) Is technology that seeks to replace energy intensive and polluting technologies
(b) Is technology that is best suited to the local internal and external environment in which a business operates
(c) Will occur when “high-tech” solutions replace “low-tech” ones
(d) Is when one business copies the technology that has been developed by another
Answer:
(b) Is technology that is best suited to the local internal and external environment in which a business operates
Question 7.
If there is a transfer of assets from the public sector to the private sector it is referred as:
(a) Privatization
(b) Deregulation
(c) Nationalization
(d) Individualism
Answer:
(a) Privatization
Question 8.
Political environment refers to:
(a) Global integration
(b) Legislature
(c) Economic factor
(d) None of the above
Answer:
(b) Legislature
Question 9.
As there has been globalization of markets, the tastes and preferences of consumers world-wide are:
(a) Converging upon a global norm.
(b) So different that they can be ignored by international organizations.
(c) Being encouraged by multinational organizations to become increasingly similar.
(d) Becoming similar to the tastes and preferences of American consumers.
Answer:
(a) Converging upon a global norm.
Question 10.
Internal factors of business environment include
(a) Vision of the organization
(b) Mission of the organization
(c) Vision and mission of the organization.
(d) Vision and mission of the organization and other internal mechanism of the organization.
Answer:
(d) Vision and mission of the organization and other internal mechanism of the organization.
Question 11.
General forces that affect business environment do NOT include:
(a) Investor
(b) Social conditions
(c) Customers
(d) Suppliers
Answer:
(a) Investor
Question 12.
Business environment is dynamic in nature means:
(a) Early identification of opportunities
(b) Changes are always taking place in the business environment
(c) Identification of threats
(d) Giving directions for growth
Answer:
(b) Changes are always taking place in the business environment
Question 13.
Business environment is multifaceted as’:
(a) It is an opportunity for some but a threat for others
(b) It has multiple work to do
(c) There are 40 many different businesses.
(d) None of the above.
Answer:
(a) It is an opportunity for some but a threat for others
Question 14.
Internal strategy of a business invariably takes care of:
(a) Taking care of political environment
(b) Media
(c) Employees.
(d) Both b and c.
Answer:
(d) Both b and c.
Question 15.
Out of the following which would you NOT classify as a political-legal factor in the external environment?
(a) European Union directive on working hours.
(b) Government policy on corporate and personal income taxes
(c) Regulatory requirements for the tele-communications industry.
(d) Consumer attitudes to greater competition in the gas and electricity industries
Answer:
(d) Consumer attitudes to greater competition in the gas and electricity industries
Question 16.
Keeping the view of marketing, an organization that enjoys competitive advantage in an industry has done so by:
(a) Constantly enlarging its marketing activities
(b) Creating superior value for customers.
(c) Focusing on long-term profit.
(d) Charging lower prices than competition
Answer:
(b) Creating superior value for customers.
Question 17.
The main factors in global marketing are:
(a) Social and technical changes.
(b) Government policy and legislation.
(c) Marketing activities and plans.
(d) All of the above.
Answer:
(c) Marketing activities and plans.
Question 18.
Select out the one that is not a part of the macro-environment
(a) Demographic forces.
(b) Competitors’ forces.
(c) Political forces.
(d) Natural forces.
Answer:
(b) Competitors’ forces.
Question 19.
The most recent wave of globalisation has emphasized the outsourcing of:
(a) Natural resource extraction and mining job.
(b) Services and white collar jobs.
(c) Agricultural and forming jobs.
(d) Manufacturing and blue collar jobs.
Answer:
(b) Services and white collar jobs.
Question 20.
It is observed that there has been a decrease in the price of A’ the most certain explanation for this is:
(a) The demand for A has increased or the supply has decreased or both
(b) The demand for A has increased or the supply has increased or both
(c) The demand for A has decreased or the supply has increased or both
(d) The demand for A has decreased or the supply has decreased or both
Answer:
(c) The demand for A has decreased or the supply has increased or both
Question 21.
What is human capital?
(a) The development of robots in industry
(b) The rise of Information technology
(c) The skills pnd abilities of humans to learn
(d) Technological ideas of people
Answer:
(c) The skills pnd abilities of humans to learn
Question 22.
The exercising of political authority at a higher level is often referred as:
(a) Economic policies
(b) Economic conditions
(c) Technology
(d) Globalization
Answer:
(a) Economic policies
Question 23.
Delhi is often described as a ’cosmopolitan’ city. This means that it:
(a) Is the principal city
(b) Is a city of great wealth
(c) Is a city with a global reputation
(d) Is a city with an ethnically diverse population
Answer:
(d) Is a city with an ethnically diverse population
Question 24.
NAFTA is:
(a) Treaty signed between two companies of Europe
(b) Free trade between America and Europe
(c) Free trade agreement between US, Canada and Mexico.
(d) Free treaty between any two countries
Answer:
(c) Free trade agreement between US, Canada and Mexico.
Question 25.
By…….. EXIM policy we mean
(a) External and internal policy
(b) Export-import policy
(c) Extra import policy
(d) None of the above.
Answer:
(b) Export-import policy
Question 26.
First mover advantage refers to:
(a) Early identification of business opportunities
(b) Early identification of uncertainty
(c) Early identification of business rivals
(d) Early identification of uncertainty in business.
Answer:
(a) Early identification of business opportunities
Question 27.
Liberalization does NOT include:
(a) Reduction in taxes
(b) Simplifying exports
(c) Reducing administrative burden on state.
(d) Abolishing industrial licensing requirement for most of the industries.
Answer:
(c) Reducing administrative burden on state.
Question 28.
WTO helped in:
(a) Privatization
(b) Cross burden trade
(c) Helped in providing political stability for companies who are doing international business
(d) All of the above.
Answer:
(b) Cross burden trade
Question 29.
Fast growth in the private sector was after the policy reforms announced in:
(a) 1992
(b) 1991
(c) 1998
(d) 2001
Answer:
(b) 1991
Question 30.
The goals of international marketing are to:
(a) Create and retain customer in global markets.
(b) Eliminate competition in international markets.
(c) Expand business activities abroad.
(d) Gain market share and increase profit.
Answer:
(a) Create and retain customer in global markets.
Question 31.
If it is a global organization it means:
(a) Creating both standardized and customized products.
(b) Creating standardized products for homogeneous markets.
(c) Customizing the product range for each segment in part.
(d) None of the above.
Answer:
(a) Creating both standardized and customized products.
Question 32.
Out of the following …….. represents a company’s effort to identify and categorize groups of customers and countries according to common characteristics:
(a) Global targeting.
(b) Global marketing research
(c) Global market segmentation
(d) Global positioning.
Answer:
(c) Global market segmentation
Question 33.
Global market leader is an organization which:
(a) Has more than 50% global market share.
(b) Is recognized as being ahead of the rest in terms of market share.
(c) Is ahead of the competition in terms of global innovation.
(d) Has the monopoly over several foreign markets.
Answer:
(b) Is recognized as being ahead of the rest in terms of market share.
Question 34.
The objective of global marketing is to:
(a) Coordinate the marketing activities within the constraints of the global environment.
(b) Satisfy global customers better than competition.
(c) Find global customers.
(d) Achieve all of the above.
Answer:
(d) Achieve all of the above.
Question 35.
The importance of globalization for multinational firms is:
(a) Home demand, home factor conditions and domestic rivalry are no longer important to multinational firms.
(b) A multinational firm can gain a competitive advantage in a foreign country.
(c) The home base is no longer important to multinational firms.
(d) All of the above.
Answer:
(d) All of the above.
Question 36.
lincrease in the number of working women and the rise in no family households are examples of:
(a) The geographic shifts in population.
(b) The changing family.
(c) The changing age structure of the population.
(d) A better-educated and more white-collar population
Answer:
(b) The changing family.
Question 37.
The insecurity due to tomorrow’s products that haven’t even been invented yet, reflects which aspect of the technological environment?
(a) Concentration on minor improvements.
(b) Increased regulation.
(c) High R.and D budgets.
(d) The fast pace of technological change
Answer:
(d) The fast pace of technological change
Question 38.
Analysing the business environment best assists in:
(a) Identifying key competitive forces; identifying competitive position; identifying key opportunities, threats, strengths and weaknesses.
(b) Auditing macro-environmental influences, Identifying key opportunities and threats.
(c) Auditing external and organizational factors, identifying key competitive forces, identifying competitive positions, identifying key opportunities and threats. .
(d) Assessing historical trends; auditing environmental dangers; identifying strategic capabilities; identifying competitive position.
Answer:
(b) Auditing macro-environmental influences, Identifying key opportunities and threats.
Question 39.
The following factors are key drivers of globalisation:
(a) Government action, exchanges rates, competition and socio-demographic factors.
(b) Market convergence, competition, exchange rates and cost advantage.
(c) Cost advantages, government action, economic cycles and competition.
(d) Market, cost, competition and government policies.
Answer:
(d) Market, cost, competition and government policies.
Question 40.
Analysing process of change in the business environment involves conceptualizing it as:
(a) Complex
(b) Static
(c) Dynamic
(d) Diverse
Answer:
(c) Dynamic
Question 41.
Invariably Globalisation:
(a) Lowers poverty in developing countries.
(b) Leads to conservative market.
(c) Increases the world inflation rate.
(d) Mostly increases the corruption level.
Answer:
(a) Lowers poverty in developing countries.
Question 42.
Which of the following is not an example of social environment?
(a) Composition of family.
(b) Literacy rate. .
(c) Money supply in the economy.
(d) Technology.
Answer:
(d) Technology.
Question 43.
Research has shown that the most important demographic feature of India regarding oversell attraction?
(a) Easy availability of skilled labour.
(b) Easy availability of working population.
(c) Easy availability of mobile people.
(d) Easy availability of intermediary people.
Answer:
(a) Easy availability of skilled labour.
Question 44.
The type of business environment within a company is called………. environment:
(a) Culture.
(b) Employers
(c) Customers
(d) Internal
Answer:
(d) Internal
Question 45.
The 6 MS of internal environment are:
(a) Media, management, money, monitory policy, mission man
(b) Monitory policy, man, marketing, resources, money, machinery miscellaneous factors.
(c) Man, marketing resources, machinery, management, money, miscellaneous, money machinery
(d) None of the above
Answer:
c. Man, marketing resources, machinery, management, money, miscellaneous, money machinery
Question 46.
A society’s basic values, lifestyle, culture,preferences are all parts of its………… Environment:
(a) Cultural-economic
(b) Physical environment
(c) Natural
(d) Socio-cultural
Answer:
(d) Socio-cultural
Question 47.
The acronym STEEP means:
(a) socio-cultural and demographics, Technology, Economic conditions, Ecology and physical environment, Political and legal
(b) Suppliers, Technology conditions, Ecology and physical environment, Political and legal
(c) Employees and Political legal
(d) Shareholders
Answer:
(a) socio-cultural and demographics, Technology, Economic conditions, Ecology and physical environment, Political and legal
Question 48.
Globalisation has brought:
(a) Economic growth best growing inequalities wealth and
(b) Resentment from low skilled workers who see there jobs go abroad
(c) a and b
(d) Real jobs in less developed countries and closed the poverty gap.
Answer:
(c) a and b
Question 49.
Which of the following is a part of liberalisation process?
(a) Making industrial licensing requirement mandatory in most of the industry
(b) Regulating the scale of business activities
(c) Fixing of prices of goods and services
(d) Simplifying the procedures for imports and exports.
Answer:
(d) Simplifying the procedures for imports and exports.
Hint Liberalisation can be termed as removal of controls. It is actually elimination of unnecessary controls and restrictions on the business organization. Characteristic features of Liberalisation are:
– Abolishing industrial licensing
– Reduction of tax rates .
– Freedom in fixing of price of goods and services
– Simplifying the procedure of export and import
– Simple policies to enhance the investment from foreign companies
– Development of stiff competition
– Low inflation rate
Question 50.
Macro factors of business environment are generally:
(a) As controllable as micro factors
(b) Less controllable than micro factors
(c) More controllable than micro fqctors
(d) None of the above.
Answer:
(b) Less controllable than micro factors
Hint
The macro-environment includes those things that may impact businesses but which are outside of their control. It is the larger, external environment within which businesses operate from an industry or economic standpoint. It is also known as General or Remote environment.
Question 51.
Which one of the following is the result of product differentiation?
(a) Brand Equity
(b) Competitive Advantage
(c) Value System
(d) None of the above.
Answer:
(b) Competitive Advantage
Hint
Product differentiation is a marketing strategy that businesses use to distinguish a product from similar offerings on the market. For businesses, a product differentiation strategy may provide a competitive advantage in a market.
Question 52.
Which one of the following is the desired future position?
(a) Financial Statement
(b) Vision Statement
(c) Objectives
(d) All of the above.
Answer:
(b) Vision Statement
Hint
By vision we mean what an enterprise wants to be. Thus it is the future of an enterprise and mission is to reach that vision. Vision is actually the future goal of the enterprise and for achieving that goal some measurements are to be followed by company
Question 53.
Mission Statement of a company is derived from its:
(a) Articles of Association
(b) Vision Statement
(c) Memorandum of Association
(d) Prospectus.
Answer:
(b) Vision Statement
Hint
Vision is actually the future goal of the enterprise and for achieving that goal some measurements are to be followed by company. These measurements are the mission of the enterprise. Elements of Mission and Vision Statements are often combined to provide a statement of the company’s purpose, goals and values. However, sometimes the two terms are used interchangeably.
Question 54.
There is a close and interaction between the business and its environment:
(a) Frequent
(b) Continuous
(c) Seldom
(d) Occasional
Answer:
(b) Continuous
Hint
As a business environment is uncertain and dynamic, an enterprise has to keep itself fit to survive in this environment. An enterprise has to constantly keep an eye on this changing environment. It can be said that there is close and continuous interaction between business and its environment.
Question 55.
Which one of the following shows a big picture of what a company wants to achieve in future?
(a) Vision statement
(b) Mission statement
(c) Value statement
(d) Quality statement.
Answer:
(a) Vision statement
Hint
Every enterprise has to have a vision and mission for its progress. By vision we mean an enterprise wants to be. Thus it is the future of an enterprise and mission is to reach that vision.
Question 56.
Value system of an organisation have an impact on its: I. Objectives II. Policies III. Practices IV. Profit The correct option is:
(a) I and II only
(b) I, II and III only
(c) II, III and IV only
(d) I, II, III and IV.
Answer:
(b) I, II and III only
Hint
By value system we mean what is the policy of the organization regarding the right and wrong. It is the business ethics that the organization follows which defines the organization’s policy about right and wrong. Internal factors like organizational structure and the corporate culture decides the motivation of the employee with the company.
Question 57.
Which among the following are the key drivers of globalisation?
(a) Government action, exchange rates, competition and socio-demographic factors
(b) Market convergence, competition, exchange rates and cost advantages
(c) Cost advantages, government action, economic cycles and competition
(d) Market, cost, competition and government policies.
Answer:
(b) Market convergence, competition, exchange rates and cost advantages
Hint
Reasons for Globalization:
– Domestic markets are not enough and other markets are required for the progress of industry
– World is shrinking because of the development of the transportation, communication, technological changes etc.
– An organization named WTO (World Trade Organization ) was established for the development of cross border trade
– For the development of business a new technology is needed which could be taken from overseas
– To cut down the manufacturing cost, industries may set up manufacturing units overseas where manufacturing cost is favourable
– To set up a business in a place which is politically more stable
– Adverse business environment in home country pushes the companies to look for global market
– Most companies move their headquarters to overseas to avoid their respective home countries’ high taxes and other costs associated in business operation in those countries
Thus, we can say that, market convergence, competition, exchange rates and cost advantages are the key drivers of globalization.
Question 58.
Which one of the following is not a feature of business environment?
(a) Dynamic nature
(b) Image building
(c) Uncertainty
(d) Totality of external forces.
Answer:
(b) Image building
Hint
The features of business environment are:
(i) Dynamic
(ii) Multi-faceted
(iii) Complex
(iv) Uncertainty
(v) Totality of external forces
(vi) Far reaching impact
Therefore, image building is not a feature of business environment.
Question 59.
Which one of the following describes the desired future position of a company?
(a) Mission Statement
(b) Vision Statement
(c) Competitive advantage
(d) Qualitative’ policy.
Answer:
(b) Vision Statement
Hint
Every enterprise has to have a vision and mission for its progress. By vision we mean an enterprise wants to be. Thus it is the future of an enterprise and mission is to reach that vision.
Question 60.
The process of eliminating unnecessary controls and restrictions on the smooth functioning of a business enterprise is known as:
(a) Liberalisation
(b) Globalisation
(c) Privatisation
(d) None of the above
Answer:
(a) Liberalisation
Hint
Liberalisation can be termed as removal of controls. It is actually elimination of unnecessary controls and restrictions on the business organization.
Question 61.
Business environment consists of which element?
(a) Internal
(b) External
(c) Both (a) and (b)
(d) None of these
Answer:
(c) Both (a) and (b)
Hint
Mainly there are two types of business environment.
(a) Internal
(b) External
Question 62.
Which of the following is not an economic policy?
(a) Industrial Policy
(b) Fiscal Policy
(c) Exim Policy
(d) Technological Policy
Answer:
(d) Technological Policy
Hint
The economic environment constitutes to economic conditions, economic policies and the economic system that is important to external factors of business. Economic policies are fiscal policies, Industrial policies, taxation policy, exchange rates, EXIM policy but not technological policy.
Question 63.
Macro-environment is concerned with major issues and upcoming changes in the environment:
(a) True
(b) False
(c) Partly True
(d) Partly False
Answer:
(a) True
Hint
Macro-environment study the overall issues of firms and broader dimensions. It is mainly concerned with major issues.
Question 64.
Which of the following factor is not included in micro-environment?
(a) Customers
(b) Employees
(c) Suppliers
(d) Technology
Answer:
(d) Technology
Hint
Some of the Micro-environment are:
(a) Employees
(b) Customers
(c) Shareholders
(d) Suppliers
(e) Media
(f) Competitors
Question 65.
The economic environment of business in India is changing at a fast rate mainly due to economic policies:
(a) True
(b) False
(c) Partly Yes
(d) Partly No
Answer:
(b) False
Hint
The economic environment constitutes to economic conditions, economic policies and the economic system that is important to external factors of business. The economic environment of business in India is changing at a fast rate’ mainly due to government policies.
Question 66.
Which of the following affects an individual enterprise?
(a) General forces
(b) Specific forces
(c) Both (a) and (b)
(d) None of these
Answer:
(b) Specific forces
Hint
Specific forces affect the individual enterprises.
Question 67.
Which among the following is the vision of ICSI?
(a) “Promoting global excellence”
(b) “To be a global leader in promoting good corporate governance”
(c) “Partners in Nation building”
(d) “Building corporate responsibility”
Answer:
(b) “To be a global leader in promoting good corporate governance”
Hint
Every enterprise has to have a vision and mission for its progress. By vision we mean an enterprise wants to be. Thus it is the future of an enterprise and mission is to reach that vision. Thus to be global leader for promoting good corporate governance is vision of ICSI.
Question 68.
When a state owned enterprise is given in private hands, it is known as:
(a) Liberalisation
(b) Globalisation
(c) Privatisation
(d) Transformation
Answer:
(c) Privatisation
Hint
The transfer of ownership, property or business from the Government to the private sector is termed as privatisation. The government ceases to be the owner of the entity. Privatisation is considered to bring more efficiency and objectivity to the company.
Question 69.
Who started the process of Liberalisation ?
(a) Yashwant Singh
(b) Jashwant Singh
(c) Manmohan Singh
(d) Mahatma Gandhi
Answer:
(c) Manmohan Singh
Question 70.
Mission Statement is derived from –
(a) Future position of the company
(b) Company’s business and its objectives
(c) Both (a) and (b)
(d) None
Answer:
(b) Company’s business and its objectives
Hint
Vision is actually the future goal of the enterprise and for achieving that goal some measurements are to be followed by company. These measurements are the mission of the enterprise.
Question 71.
Which of the following is not an example of mission statement?
(a) NIKE — To bring inspiration and innovation.
(b) FACEBOOK — Power to share and make the world open and connected.
(c) GOOGLE — To organise the world’s information.
(d) ICSI — To be a global leader in promoting good corporate governance.
Answer:
(b) FACEBOOK — Power to share and make the world open and connected.
Hint
This is the vision statement of ICSI.
Question 72.
Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing it to competitors. The mentioned advantage can be categorised under:
(a) First mover advantage
(b) Initial identifier advantage
(c) Earlier advantage
(d) Second mover advantage.
Answer:
(a) First mover advantage
Hint
First Mover’ is a form of competitive advantage that a company earns by being the first to enter a specific market or industry. Being the first allows a company to acquire superior brand recognition and customer loyalty.
Question 73.
Liberalization in India did not result in:
(a) A high growth rate
(b) A healthy and flourishing stock market
(c) Easy availability of goods at competitive . prices
(d) Low foreign exchange reserves.
Answer:
(d) Low foreign exchange reserves.
Hint
Benefits of liberalization are:
(a) Removing Barriers to International Investing .
(b) Improves stock market performance ’
(c) Low inflation rate
(d) High growth rate
(e) Unrestricted flow of capital
(f) Availability of goods at competitive price
(g) Reduces political risk to investors
But it does not result in low foreign exchange reserves.
Question 74.
Recruitment of public relations consultants are a part of:
(a) Operating Environment
(b) General Environment
(c) Macro-Environment
(d) Competitive Environment.
Answer:
(d) Competitive Environment.
Hint
A competitive environment is the dynamic external system in which a business competes and functions. The more sellers of a similar product or service, the more competitive the environment in which you compete. Recruitment of public relation consultant is a part of competitive environment. Human resource is the most important resource used by organisations to counter competition.
Question 75.
Where is company’s mission statement derived from?
(a) From the vision of the company
(b) From the company policies
(c) Memorandum of Association of the Company
(d) All of the above
Answer:
(a) From the vision of the company
Hint
Every enterprise has to have a vision and mission for its progress. By vision we mean an enterprise wants to be. Thus it is the future of an enterprise and mission is to reach that vision. Vision is actually the future goal of the enterprise and for achieving that goal some measurements are to be followed by company. These measurements are the mission of the enterprise.
Question 76.
Opening up of an industry that has been reserved for the public sector to the private sector is an example of:
(a) Modernisation
(b) Liberalisation
(c) Globalisation
(d) Privatisation
Answer:
(d) Privatisation
Hint
The transfer of ownership, property or business from the Government to the private sector is termed privatisation.
Question 77.
Mission statement is derived from:
(a) Vision statement
(b) Laws and statutes
(c) Company policies
(d) The company’s memorandum of association
Answer:
(a) Vision statement