Business Studies

Business Environment

Question:

What economic changes were initiated by the Government under the Industrial Policy, 1991? What impact have these changes made on business and industry?

Answer:

Economic changes initiated by the government under the Industrial Policy, 1991
(i) The government reduced the number of industries under compulsory licensing to six.
(ii) The role of public sector was reduced. It was now limited only to four industries of strategic importance.
(iii) Disinvestment was carried out in case of many public sector industrial enterprises.
(iv) Foreign Direct Investment was permitted.
(v) Automatic permission was now granted for technology agreements with foreign companies.
(vi) Foreign Investment Promotion Board (FIPB) was set up to promote and channelise foreign investment in India.
The Indian corporate sector has come face-to-face with several challenges due to government policy changes. Some of them are
(i) Increasing Competition The competition has increased due to entry of new players (privatisation and globalisation).
(ii) More Demanding Customers Customers today, has become more demanding because they are well-informed. Increased competition in the market gives the customers wider choice in purchasing better quality of goods and services.
(iii) Rapidly Changes Technological Environment The rapidly changing technological environment creates tough challenges before smaller firms.
(iv) Necessity for Change After 1991, the market forces have become turbulent as a result of which the enterprises have to continuously modify their operations.
(v) Need for Developing Human Resources Earlier, Indian enterprises worked with inadequately trained personnel. The new market conditions require people with higher competence and greater commitment. Hence, the need for developing human resources.
(vi) Market Orientation Before 1991, all firms worked with production oriented marketing operations. In a fast changing world, there was a shift to market orientation. The firms had to study and analyse the market first and produce goods accordingly.
(vii) Loss of Budgetary Support to the Public Sector The public sector undertakings have realised that in order to survive and grow, they will have to be more efficient and generate their own resources for the purpose.

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Business Environment

Q 1.

How would you characterise business environment? Explain with examples, the difference between general and specific environment.

Q 2.

What are the essential features of
(a) Liberalisation
(b) Privatisation
(c) Globalisation

Q 3.

Identify changes in business environment under different heads – economic, social, technological, political and legal that have facilitated the companies decisions to plan significant invstments in organised retailing.

 

Q 4.

What has been the impact of these changes with regard to globalisation and privatisation?

Q 5.

Explain with examples, the various dimensions of business environment.

Q 6.

How would you argue that the success of a business enterprise is significantly influenced by its environment?

Q 7.

What do you understand by business environment?

Q 8.

Mention the various dimensions of business environment.

Q 9.

Why it is important for business enterprises to understand their environment? Explain briefly.

Q 10.

What economic changes were initiated by the Government under the Industrial Policy, 1991? What impact have these changes made on business and industry?

Q 11.

Briefly discuss the impact of Government policy changes on business and industry.

Q 12.

Why it is important for business enterprises to understand their environment? Explain briefly.

Q 13.

Briefly explain the following
(a) Liberalisation
(b) Privatisation
(c) Globalisation