28 extra multiple-choice questions for Environmental Factors (12th Standard Commerce, Samacheer Kalvi), beyond the ones printed in the textbook — each with the correct option highlighted and a clear, worked explanation. Free to read in English and Tamil.
Q1
Who defined business environment as "the total of all things external to firms and industries which affect their organisation and operations"?
- A. Uday Kotak
- B. Narayana Murthy
- C. Bayard O WheelerCorrect
- D. Adi Godrej
Explanation. Section 19.01 quotes Bayard O Wheeler's definition of business environment as the total of all things external to firms and industries which affect their organisation and operations.
Q2
Consider the following statements about SWOT analysis of the business environment.
1. The internal environment yields the strengths and weaknesses of an organisation.
2. The external environment relates to opportunities and threats.
3. The external environment is fully controllable by the business.
Which of the statements given above is/are correct?
- A. 1 only
- B. 1 and 2 onlyCorrect
- C. 2 and 3 only
- D. 1, 2 and 3
Explanation. The chapter introduction says the controllable internal environment yields strengths and weaknesses, while the uncontrollable external environment relates to opportunities and threats. Statement 3 is wrong because external factors are uncontrollable.
Q3
Dr. Reddy started Apollo Hospitals in the 1980s after seeing the need for quality service in healthcare. The lesson uses this example to show that studying the business environment helps to
- A. enhance the public image
- B. identify new opportunitiesCorrect
- C. overcome internal power relations
- D. reduce the cost of inventory
Explanation. Under the significance of business environment, point ii says analysis of the environment helps a business identify new opportunities, with Dr. Reddy starting Apollo Hospitals as the example.
Q4
Large retail stores like Aditya Birla's "More" now provide home delivery services. The lesson gives this as an example of which benefit of environmental analysis?
- A. Public imageCorrect
- B. Environment scanning
- C. Formulating strategy
- D. Identifying threats
Explanation. Point v says environmental analysis helps a business enhance its public image by responding quickly to the changing environment and needs of people, with More's home delivery as the example.
Q5
Which one of the following is NOT an internal environment factor of a business?
- A. Value system
- B. Human resources
- C. CompetitorsCorrect
- D. Company image
Explanation. Value system, human resources and company image are internal factors listed in section 19.02.01. Competitors are outside the firm and belong to the micro (external) environment.
Q6
"Amul the taste of India" of the Gujarat Co-operative Milk Marketing Federation (GCMMF) is given as an example of which internal factor?
- A. Internal power relations
- B. Management structure
- C. Value system
- D. Vision and objectivesCorrect
Explanation. Section 19.02.01 says the vision and objectives of a business guide its operations and strategic decisions, and quotes Amul the taste of India of GCMMF as the example.
Q7
Under which internal factor does the lesson say that the board is the highest decision making authority, so its composition and professionalism play a critical role?
- A. Human resources
- B. Management structure and natureCorrect
- C. Company image
- D. Value system
Explanation. Point iii, management structure and nature, says the board is the highest decision making authority, so its composition, professionalism and style of operation are critical for growth.
Q8
Which two Indian companies were named among the world's most ethical companies, as stated in the lesson?
- A. Apollo Hospitals and Amul
- B. TATA Steel and WIPROCorrect
- C. Fuji Films and More
- D. Sterlite Copper and TVS
Explanation. The box in section 19.02.01 states that two Indian companies, TATA Steel and WIPRO, have been named among the world's most ethical companies.
Q9
The external environment of business is subdivided into micro environment and macro environment. These are also called
- A. task environment and general environmentCorrect
- B. internal and controllable environment
- C. general environment and task environment
- D. future and VUCA environment
Explanation. Section 19.02.02 says the external environment is subdivided into micro or task environment and macro or general environment, in that order.
Q10
Match the micro environment factors with the examples given in the lesson.
A. Financiers - 1. Dealers, wholesalers and retailers
B. Suppliers - 2. Media group and citizen action group
C. Marketing channel members - 3. Debenture holders and financial institutions
D. Public - 4. Providers of raw materials and other inputs
- A. A-3, B-4, C-1, D-2Correct
- B. A-4, B-3, C-2, D-1
- C. A-3, B-1, C-4, D-2
- D. A-1, B-4, C-3, D-2
Explanation. Financiers include debenture holders and financial institutions; suppliers provide raw materials and inputs; marketing intermediaries include dealers, wholesalers and retailers; public includes media and citizen action groups.
Q11
In 2018 the Sterlite Copper factory in Thoothukudi was closed due to protests by
- A. its suppliers
- B. its competitors
- C. an environment protection groupCorrect
- D. its financiers
Explanation. The box in section 19.02.03 says the Sterlite Copper factory in Thoothukudi was closed in 2018 due to protests by an environment protection group, showing how the public can make or mar a business.
Q12
In which type of economic system are there a lot of restrictions on the private sector?
- A. Capitalistic economy
- B. Mixed economy
- C. Free enterprise market
- D. Socialistic economyCorrect
Explanation. The nature of economic system section says a socialistic economy is state controlled with many restrictions on the private sector, while a capitalistic economy is a free enterprise market and a mixed economy combines both.
Q13
Which one of the following countries is NOT listed in the lesson as a developed economy?
- A. USA
- B. Japan
- C. BrazilCorrect
- D. Germany
Explanation. The lesson lists the USA, Japan, Germany, Canada and Australia as developed economies. Brazil is grouped with India, China and Mexico as a developing, middle income economy.
Q14
Monetary policy, fiscal policy, export-import policy and foreign exchange policy are part of which element of the economic environment?
- A. Economic indices
- B. Economic policies of a nationCorrect
- C. Economic structure
- D. Development of financial market
Explanation. Point 3 of the economic environment, the economic policies of a nation, lists monetary, fiscal, export-import, industrial, trade and foreign exchange policies.
Q15
According to the lesson, the three political institutions which direct and influence a business are
- A. the legislative, executive and judiciaryCorrect
- B. the Military, Police and bureaucracy
- C. SEBI, GST Council and stock exchanges
- D. political parties, media and citizen groups
Explanation. Under political and legal environment the lesson says the legislative, executive and judiciary are the three political institutions which direct and influence a business.
Q16
Which of the following is given in the lesson as a parameter of political stability?
- A. Caste system in the society
- B. Rate of change in technology
- C. Per capita income
- D. Declaration of President's ruleCorrect
Explanation. Political stability is reflected by the election system, law and order, the role of Military and Police, the declaration of President's rule and civil war. Caste is socio-cultural, technology change is technological and per capita income is economic.
Q17
Consider the following statements about the geo-physical environment.
1. The concentration of the cotton textile industry in Coimbatore is due to conducive weather conditions.
2. The ban on use of plastic bags by the Ooty corporation is an example of ecological factors.
3. Availability of natural harbours is a factor of the technological environment.
Which of the statements given above is/are correct?
- A. 1 only
- B. 2 and 3 only
- C. 1 and 2 onlyCorrect
- D. 1, 2 and 3
Explanation. The geo-physical section gives Coimbatore's cotton textile industry and the Ooty plastic bag ban as examples. Natural harbours and port facilities are also listed under geo-physical, not technological, environment, so statement 3 is wrong.
Q18
Which one of the following is NOT listed under the technological environment?
- A. Level of technology available within the country
- B. Rate of change in technology
- C. Technological obsolescence
- D. Differences in currenciesCorrect
Explanation. The technological environment lists the level of technology, rate of change, technology adopted by competitors and technological obsolescence. Differences in currencies is a factor of the global environment.
Q19
Family structure, role of marriage as an institution and caste system in the society are factors of which environment?
- A. Political and legal environment
- B. Socio-cultural environmentCorrect
- C. Economic environment
- D. Geo-physical environment
Explanation. The socio-cultural environment includes social institutions, family structure, the role of marriage, the caste system, customs and beliefs, demographic factors and the lifestyle of people.
Q20
The acronym VUCA, which describes the future environment of business, was developed in the late 80's by
- A. the GST Council
- B. the U.S. militaryCorrect
- C. SEBI
- D. the Kumara Mangalam Birla Committee
Explanation. Section 19.03 says the acronym VUCA, standing for volatility, uncertainty, complexity and ambiguity, was developed in the late 80's by the U.S. military.
Q21
Consider the following requirements of the Indian corporate governance framework for listed companies.
1. At least one third of the directors have to be independent directors.
2. There must be at least one independent woman director.
3. The CEO and CFO must sign that the governance norms have been complied with in the financial statements.
Which of the statements given above is/are correct?
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3Correct
Explanation. The framework requires at least one third independent directors, at least one independent woman director, disclosure of related party deals and managerial pay, and CEO and CFO sign-off on compliance. All three statements are correct.
Q22
Arrange the committees constituted in India for corporate governance in chronological order.
1. Adi Godrej Committee
2. Kumara Mangalam Birla Committee
3. Uday Kotak Committee
4. Narayana Murthy Committee
- A. 2, 4, 1, 3Correct
- B. 4, 2, 1, 3
- C. 2, 1, 4, 3
- D. 1, 2, 4, 3
Explanation. The lesson lists the Kumara Mangalam Birla Committee 2000, Narayana Murthy Committee 2003, Adi Godrej Committee 2008 and, presently, the Uday Kotak Committee.
Q23
Assertion (A): Internal environment factors are known as controllable factors.
Reason (R): They are factors within the organisation which can be changed or altered.
- A. Both A and R are true, and R is the correct explanation of ACorrect
- B. Both A and R are true, but R is not the correct explanation of A
- C. A is true, but R is false
- D. A is false, but R is true
Explanation. The lesson says internal factors such as policies, structure, employees and resources lie within the organisation and can be changed or altered, and hence are known as controllable factors. So R explains A.
Q24
Match the taxes under GST with the correct description.
A. CGST - 1. Collected by the State Government on an intra-state sale
B. SGST - 2. Collected by the Central Government for an inter-state sale
C. IGST - 3. Collected by the Central Government on an intra-state sale
- A. A-1, B-3, C-2
- B. A-3, B-1, C-2Correct
- C. A-2, B-1, C-3
- D. A-3, B-2, C-1
Explanation. CGST is collected by the Central Government on an intra-state sale, SGST by the State Government on an intra-state sale, and IGST by the Central Government for an inter-state sale, such as Punjab to Tamil Nadu.
Q25
The Goods and Services Tax Council, a constitutional body that makes recommendations on GST to the Union and State Governments, is chaired by
- A. the Prime Minister
- B. the Union Finance MinisterCorrect
- C. the Governor of the Reserve Bank of India
- D. the Chairman of SEBI
Explanation. Section 19.05 says the GST Council is a constitutional body chaired by the Union Finance Minister, with the ministers in charge of Finance or Taxation of the States among its other members.
Q26
Which one of the following is NOT one of the five core Tata values given in the lesson?
- A. Integrity
- B. Excellence
- C. CompetitionCorrect
- D. Pioneering
Explanation. The five core Tata values are Integrity, Excellence, Unity, Responsibility and Pioneering. Competition is not among them.
Q27
The case study on Amul in the lesson describes Dr. Verghese Kurien as the pioneer of
- A. the Green revolution in India
- B. the White revolution in IndiaCorrect
- C. corporate hospital care in India
- D. rural transport service in Tamil Nadu
Explanation. The case study calls Dr. Verghese Kurien the pioneer of the White revolution in India. Corporate hospital care relates to Dr. Reddy of Apollo, and the rural transport service relates to the TVS group.
Q28
According to the lesson, GST is a comprehensive, multi-stage, destination-based tax levied on every value addition. What kind of tax is it?
- A. Direct tax on income
- B. Indirect tax on goods and servicesCorrect
- C. Tax on property and wealth
- D. Tax only on imports
Explanation. Section 19.05 says GST is the indirect tax levied on goods and services across the country, a comprehensive, multi-stage, destination-based tax levied on every value addition.
