Business StudiesControlling

Consider the following events in a firm:(A) A change in tax rates by…

Consider the following events in a firm:

(A) A change in tax rates by the government

(B) A rival firm cutting its prices

(C) A delay caused by a defective process

(D) A new technology that makes the firm’s machines out of date

Which of these are external factors that an enterprise generally cannot control?

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A), (B) and (D) only

(A) A change in tax rates by the government — Correct. Tax rates are part of government policies. The firm has to work within them.

(B) A rival firm cutting its prices — Correct. A rival’s price cut is competition, which comes from outside the firm.

(C) A delay caused by a defective process — Incorrect. A defective process lies inside the firm. Managers can find this cause of delay and correct it.

(D) A new technology that makes the firm’s machines out of date — Correct. New technology is a technological change in the outside world. The firm cannot stop it.

NCERT (2026-27 Edition): “Limitations of Controlling … (ii) Little control on external factors: Generally an enterprise cannot control external factors such as government policies, technological changes, competition etc.
(iii) Resistance from employees: Control is often resisted by employees. They see it as a restriction on their freedom. For instance, employees might object when they are kept under a strict watch with the help of Closed Circuit Televisions (CCTVs).”