Business Environment 1


SKU: AMSEQ-022 Category:

Assignment A


Question 1: “Freedom & ability of individuals and firms to initiate voluntary economic transactions with residents of other countries is Globalization”. Explain the term, its impact on world economy & characteristics of globalization.

Question 2: Explain the concept of Economic systems, their features, merits & demerits?

Question 3: Development of any country is severely hampered by major hurdles like Poverty and Unemployment. Explain the concepts in detail?

Question 4: The surroundings in which the business functions has a major impact on the success or failure of the business. Discuss the term business environment and its types.

Question 5: Instead of being called the World Trade organization it should be called “World Trade of Opportunities”. In lieu of this statement discuss the WTO.


Assignment A


Question 1: It is said that Multinational companies play a pivotal role in the global economy, linking rich & poor economies. In lieu of this statement discuss the merits, demerits & role of MNCs.

Question 2: The World Bank runs like a co-operative, with member countries as share holders. Explain clearly the IBRD, its functions & purpose?

Question 3: The International Monetary Fund (IMF) is the central institution of the international monetary system-Discuss the IMF.



Case Study

Corporate Social Responsibility at IOCL

“CSR: A Cornerstone of our Enduring Success” IOCL

At Indian Oil, corporate social responsibility (CSR) has been the cornerstone of success right from inception in the year 1964. The Corporation’s objectives in this key performance area are enshrined in its Mission statement: “… to help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience.”

We at Indian Oil have defined a set of core values for ourselves – Care, Innovation, Passion and Trust – to guide us in all we do. We take pride in being able to claim all our countrymen as our customers. That’s why, we coined the phrase, “Indian Oil – India Inspired”, in our corporate campaigns. Public corporations like Indian Oil are essentially organs of society deploying significant public resources. We, therefore, are aware of the need to work beyond financial considerations and put in that little extra to ensure that we are perceived not just as corporate behemoths that exist for profits, but as wholesome entities created for the good of the society and for improving the quality of life of the communities we serve.

As a constructive partner in the communities in which it operates, Indian Oil has been taking concrete action to realize its social responsibility objectives, thereby building value for its shareholders and customers. The Corporation respects human rights, values its employees, and invests in innovative technologies and solutions for sustainable energy flow and economic growth. In the past four decades, Indian Oil has supported innumerable social and community initiatives in India, Touching the lives of millions of people positively by supporting environmental and health-care projects and social, cultural and educational programmes.

Besides focusing primarily on the welfare of economically and socially deprived sections of society, Indian Oil also aims at developing techno-economically viable and environment-friendly products & services for the benefit of millions of its consumers, while at the same time ensuring the highest standards of safety and environment protection in its operations.


Sharing Profits

Every year, Indian Oil sets aside a fixed portion of its profits for spreading smiles in millions of lives across the country through a comprehensive community welfare and development programme. About one-fourth of the community development funds are spent on the welfare of Scheduled Caste and Scheduled Tribe beneficiaries.

Indian Oil has a concerted social responsibility programme to partner communities in health, family welfare, education, environment protection, providing potable water, sanitation, and empowerment of women and other marginalized groups. Indian Oil has always been in the forefront in times of national emergencies. Indian Oil People have time and again rallied to help victims of natural calamities, maintaining uninterrupted supply of petroleum products and contributing to relief and rehabilitation measures in cash and kind.

Indian Oil’s community-focused initiatives include allotment of petrol/diesel station dealerships and LPG distributorships to beneficiaries from among Scheduled Castes, Scheduled Tribes, physically handicapped, ex-servicemen, war widows, etc. The Corporation has also unveiled kisan seva kendras as small-format retail outlets to reach quality products and services to people in the rural areas. Indian Oil has also set up the Indian Oil Foundation (IOF) as a non-profit trust to protect, preserve and promote national heritage monuments. The Corporation also supports a variety of endeavors in arts, culture, music and dance, apart from organizing programmes on its own under the banners of Indian Oil Art Exhibition, Indian Oil Sangeet Sabha and Indian Oil Kavi Sammelan.

As part of its environment-protection initiatives, Indian Oil has invested close to Rs. 7,000 crore in state-of-the-art technologies at its refineries for production of green fuels meeting global standards. To further reduce dependence on precious petroleum products and secure the nation’s energy security, the Corporation is now in the process of commercializing various options in alternative fuels such as ethanol-blended petrol, biodiesel, and Hydrogen and Hydrogen-CNG mixture.

With safety, health and environment protection high on its corporate agenda, Indian Oil is committed to conducting business with a strong environment conscience, so as to ensure sustainable development, safe work places and enrichment of the quality of life of its employees, customers and the community. Indian Oil is also committed to the Global Compact Programme of the United Nations and endeavors to abide by the 10 principles of the programme, some of which are already part of the Corporation’s Vision and Mission statements. It is the firm resolve of Indian Oil people to move beyond business, touch every heart and fuel a billion dreams.

Read the article and make an assessment of its social responsibility towards;

1)   Customers

2)   Employees

3)   Local Community


Assignment C

(40 Multiple choice questions)


Q: 1).         The most recent round of GATT provided new rules to prevent dumping. This round was the:

a)   Kennedy Round.

b)   Uruguay Round.

c)   Merry-Go Round.

d)   American Round.


Q: 2).         MNCs have _______________ approaches for international business:

a)   1

b)   2

c)   4

d)   3


Q: 3).         Corporate Social responsibility is majorly towards:

a)   Only shareholders

b)   Shareholders, employees, customers & society

c)   Only employees

d)   Only customers


Q: 4).         A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.

a)   The most favored nation principle.

b)   The intra-regional principle

c)   The comparative advantage principle

d)   The trade diversion principle

e)   The excessive invoicing principle


Q: 5).         Which organisation of the World Bank Group deals with matters related to the development of the poorest countries in the world?

a)   The International Bank for Reconstruction and Development

b)   The International Development Association

c)   The International Finance Corporation

d)   The Multilateral Investment Agency


Q: 6).         What are the forms of assistance that the World Bank provides to its members?

a)   Technical and financial

b)   Political and financial

c)   Political and economic

d)   Technical and military


Q: 7).         Which of the following international organizations is now responsible for developing and maintaining the system of international trade rules and dealing with trade disputes?

a)   IMF

b)   WTO

c)   IBRD

d)   GATT


Q: 8).         SDR stands for

a)   State depository receipt

b)   Simple depository receipt

c)   Sample depository receipt

d)   Statutory depository receipt

N.B. the correct answer is: (Special Drawing Rights)


Q: 9).         Generally, countries with higher inflation have

a)   Similar money growth patterns to low-inflation countries.

b)   Lower money growth than low-inflation countries.

c)   Higher levels of government spending than low-inflation countries.

d)   Higher money growth than low-inflation countries.


Q: 10).       Being amongst the poorest of the poor in low income countries is:

a)   Relative poverty

b)   Absolute poverty

c)   Ultra poverty

d)   Voluntary poverty


Q: 11).       Concept relating to the unfairness or injustice of a society in its divisions of rewards & business is:

a)   Human resource development

b)   Social injustice

c)   Parallel economy

d)   Poverty


Q: 12).       Inflation can be defined as:

a)   Rise in the general level of prices of goods and services in an economy over a period of time.

b)   Fall in the general level of prices of goods and services in an economy over a period of time

c)   No change in the general level of prices of goods and services in an economy over a period of time

d)   Cyclical change in the general level of prices of goods and services in an economy over a period of time


Q: 13).       Which of the following are often regarded as characterizing globalization?

a)   Increasing space

b)   Shrinking space

c)   Strengthened borders

d)   Disappearing borders


Q: 14).       Which of the following perspectives of globalization is most likely to reflect the views of economists?

a)   The growth of international trade and the increase in international trade flows

b)   The rise of global culture and global media

c)   The emergence of global conflicts and global institutions

d)   The decline of sovereignty of the nation state


Q: 15).       The work of an MNC is mainly concerned with:

a)   Adapting a marketing mix to enter a market in another country.

b)   Transferring a marketing mix to enter a market in another country.

c)   Establishing global brands.

d)   Translating product instructions and advertising messages.


Q: 16).       A global market leader is an organization which:

a)   Has the monopoly over several foreign markets.

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 more than 50% global market share.


Q: 17).       Which of the following organizations was established by industrialized nations to loan money to underdeveloped and developing countries?

a)   OPEC

b)   NAFTA

c)   The World Bank

d)   The IMF


Q: 18).       GDP stands for:

a)   Gross National Product

b)   Gross Domestic product

c)   Government National Product

d)   Gross National Premise


Q: 19).       Capitalism, Socialism & Mixed economy are types of

a)   Economic systems

b)   Business environment

c)   Economic policies

d)   Economic controls


Q: 20).       Which of the following could not be considered a major economic system?

a)   Capitalism.

b)   Communism.

c)   Socialism.

d)   Physical quality of life index.


Q: 21).       Basic human needs include

a)   Food, clothing and housing.

b)   Health, education and quality housing.

c)   Adequate nutrition, primary education, health, sanitation, water supply and housing.

d)   Longevity and living standards.


Q: 22).       The percentage of the labour force that is unemployed is the:

a)   Unemployment rate.

b)   Labour force rate.

c)   Unemployment population ratio

d)   Employment rate.


Q: 23).       An individual who is not working and who has given up looking for work is classified as:

a)   Hard core unemployed.

b)   Unemployable.

c)   A discouraged worker.

d)   Unemployed.


Q: 24).       Cyclical unemployment is the:

a)   Unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work.

b)   Portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.

c)   Portion of unemployment that is due to the normal working of the labour market.

d)   Unemployment that occurs during recessions and depressions.


Q: 25).       Unemployment resulting from real wages being above their equilibrium level is called ______ unemployment

a)   Natural

b)   Disequilibrium

c)   Structural

d)   Frictional


Q: 26).       The framework for helping employees develop their personal & organizational skills is:

a)   Human resource development

b)   Employee training

c)   Employee management

d)   Performance management


Q: 27).       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 competitive forces; identifying competitive position; identifying key opportunities and threats.

c)   Auditing external and organizational factors; identifying key competitive forces; identifying competitive position; identifying key opportunities and threats.

d)   Assessing historical trends; auditing environmental dangers; identifying strategic capabilities; identifying competitive position.


Q: 28).       The following factors are 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.


Q: 29).       In the Five Forces framework, the term “threat of entrants” means:

a)   The possibility of an existing competitor capturing the entire market.

b)   The possibility of an existing competitor withdrawing from the market.

c)   The possibility of a new competitor entering the market.

d)   The possibility of a potential competitor entering a different market.


Q: 30).       Which of the following statements in relation to the Five Forces framework

a)   The framework assists in developing a broad perspective on the environment within which an organization is operating.

b)   It is not appropriate in public sector management.

c)   The framework is a means of identifying the forces which affect the level of competition in an industry or sector.

d)   The framework identifies the major stakeholders of an organization.


Q: 31).       The five forces that affect the level of competition in an industry are:

a)   Threat of entrants; power of buyers; power of suppliers; threat of substitutes; competitive rivalry.

b)   Threat of buyers; power of entry; power of substitutes; threat of suppliers; threat of recession.

c)   Threat of recession; power of buyers; power of suppliers; threat of management failure; competitive rivalry.

d)   Threat of entry; power of buyers; power of suppliers; threat of substitutes; government action.


Q: 32).       Porter suggests the following reasons for one nation being more competitive than another:

a)   Ability to speak English; developed network of supporting industries; absence of competition; and low labour cost.

b)   Abundant natural resources; skilled labour force; temperate climate; and democracy.

c)   Factor conditions; demand conditions; related and supporting industries; and firm strategy, industry strategy and rivalry.

d)   Strong sporting ethos; emphasis on individual achievement; strong national party in power; large home market.


Q: 33).       A successful business must meet its:

a)   Economic objectives

b)   Social objectives.

c)   Economics and social objectives

d)   Top executive’s expectations


Q: 34).       Companies have to change their product portfolio because of cultural preferences. These are included under:

a)   Demographic environment

b)   Political environment

c)   Socio-Cultural environment

d)   Technological environment


Q: 35).       Environment related to business is

a)   Stagnant

b)   Predictable

c)   Dynamic

d)   Simple


Q: 36).       The marketing mix for an organization is decided by

a)   Legal environment

b)   Demographic environment

c)   Economic environment

d)   Political environment



Q: 37).       HRD aims to maximize employees as well as organizational ____________?

a)   Effectiveness

b)   Economy

c)   Efficiency

d)   Performance


Q: 38).       The focus of HRD revolves around

a)   Machine

b)   Motivation

c)   Money

d)   Men


Q: 39).       The form of economic system in which man, machine and land are in individual hands is:

a)   Capitalism

b)   Socialism

c)   Mixed Economy

d)   Democracy


Q: 40).       Industrial, fiscal, Export-Import policies are types of:

a)   Economic policy

b)   Licensing policy

c)   Monetary policy

d)   Foreign policy



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