Direction: Read the following text and answer the questions given below:
The government has opened up the economy to multinational corporations and has encouraged foreign companies to invest in some sectors of retailing. It is argued that customers can now afford to buy the products of these companies, as their income is rising gradually. Foreign retailers are also expected to bring new technology, which will provide new ways of producing and selling goods and will increase the variety of goods in the market. This will eventually improve the quality of life of the people.
Which of the following statements about the passage are true?
(A) For an Indian retailer, the foreign retailers entering India are a general force, as they are its competitors.
(B) The new ways of producing and selling goods that foreign retailers are expected to bring are a part of the technological environment.
(C) The opening of the economy and the rise in customers’ income are general forces, as they affect all retailers in the country.
(D) The opening of the economy, rising incomes and new technology in the passage affect one another, which shows the inter-relatedness of business environment.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (B), (C) and (D) only
(A) For an Indian retailer, the foreign retailers entering India are a general force, as they are its competitors. — Incorrect. Competitors are specific forces. Specific forces affect a firm directly and immediately in its day-to-day working. The foreign retailers compete for the same customers, so they touch the Indian retailer directly.
(B) The new ways of producing and selling goods that foreign retailers are expected to bring are a part of the technological environment. — Correct. The technological environment covers innovations that provide new ways of producing goods and services and new methods of operating a business. New ways of producing and selling come from new technology.
(C) The opening of the economy and the rise in customers’ income are general forces, as they affect all retailers in the country. — Correct. General forces are conditions that have an impact on all business enterprises. An open economy and rising incomes are economic conditions. Every retailer in the country faces them, so they are general forces.
(D) The opening of the economy, rising incomes and new technology in the passage affect one another, which shows the inter-relatedness of business environment. — Correct. Inter-relatedness means the parts of business environment are closely linked. In the passage, the open economy brings in foreign retailers. Rising incomes let people buy their goods, and the new technology changes how goods are made and sold. One change leads to another.
NCERT (2026-27 Edition): “(ii) Specific and general forces: Business environment includes both specific and general forces. Specific forces (such as investors, customers, competitors and suppliers) affect individual enterprises directly and immediately in their day-to-day working. General forces (such as social, political, legal and technological conditions) have impact on all business enterprises and thus may affect an individual firm only indirectly.” “(iii) Inter-relatedness: Different elements or parts of business environment are closely interrelated. For example, increased life expectancy of people and increased awareness for health care have increased the demand for many health products and services like soft drinks, fat-free cooking oil, and health resorts. New health products and services have, in turn, changed people’s life styles.” “Dimensions of Business Environment Dimensions of, or the factors constituting the business environment include economic, social, technological, political and legal conditions which are considered relevant for decision-making and improving the performance of an enterprise. In contrast to the specific environment, these factors explain the general environment which mostly influences many enterprises at the same time. …” “(i) Economic Environment: Interest rates, inflation rates, changes in disposable income of people, stock market indices and the value of rupee are some of the economic factors that can affect management practices in a business enterprise. …” “(iii) Technological Environment: Technological environment includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business. …” |