Chapter 1

Question 1

What does the term ‘environment’ refer to in a business context?

Answer 1

Anything outside an organisation (industry/market) that affects what it does or how it acts.

Question 2

What is an ‘environmental scan’?

Answer 2

An analysis that includes identifying factors in the environment that create threats or opportunities, recognising the most significant factors, and deciding how the organisation should respond to them.

Question 3

What are ‘threats’ in the context of environmental analysis?

Answer 3

Factors in the environment that might prevent the organisation from achieving its business objectives and create an adverse risk for the entity’s future prospects.

Question 4

What is necessary for understanding the environment according to the text?

Answer 4

It should be an on-going activity.

Question 5

What are ‘opportunities’ in environmental analysis?

Answer 5

Developments that provide opportunities for the organisation to achieve its objectives more successfully.

Question 6

What are the two methods for analysing environmental factors?

Answer 6

• Porter’s 5 forces model (Industry Analysis)
• PESTEL analysis (Country/Region/Macro environment Analysis)

Question 7

List the five factors in Porter’s 5 forces model.

Answer 7

• Threats from potential entrants
• Threats from substitute products or services
• The bargaining power of suppliers
• The bargaining power of customers
• Competitive rivalry within the industry or market

Question 8

What categories are used in PESTEL analysis?

Answer 8

• Political
• Economic
• Social, cultural and demographic
• Technological
• Environmental/Ecological
• Legal

Question 9

Fill in the blank: PESTEL analysis groups environmental factors into _______.

Answer 9

[four or six categories]

Question 10

What is the scope of political and legal influence on business?

Answer 10

Political decisions and legal changes can significantly impact business activities in different countries.

Question 11

What does nationalisation of industry mean?

Answer 11

Nationalisation refers to the state owning wholly or partly an industry.

Question 12

What is privatisation?

Answer 12

Privatisation is the transfer of ownership of state-owned businesses to commercial companies.

Question 13

How can transport and infrastructure affect businesses?

Answer 13

Businesses rely on the transport system to move goods and employees, which is affected by the quality of the infrastructure.

Question 14

What role does government policy play in transport and infrastructure?

Answer 14

Government policy on transport and building roads or rail networks can significantly affect business operations.

Question 15

How can taxation influence business activities?

Answer 15

Businesses may be affected by changes in taxation, such as increased taxes on fuel consumption or waste disposal.

Question 16

What is the purpose of government subsidies?

Answer 16

Governments may offer subsidies to encourage certain activities, such as skills training.

Question 17

What factors determine the political setup in a country?

Answer 17

The political setup depends on pre-existing laws, regulations, political ideology, and opposition agendas.

Question 18

How does environmental policy impact businesses?

Answer 18

Environmental policy can include regulations to reduce pollution levels in air, water, or land.

Question 19

What was the significance of the 2007 corn shipment incident?

Answer 19

The shipment contained genetically-modified corn, which was legal in the US but illegal in the European Union.

Question 20

Who is responsible for the education system in most countries?

Answer 20

The government is typically responsible for the education system.

Question 21

How does education policy affect the workforce?

Answer 21

Education policy impacts the quality and skills of individuals, which are crucial for the workforce of business entities.

Question 22

Fill in the blank: The political ideology of the ruling political party can influence _______.

Answer 22

[business activities and regulations]

Question 23

True or False: Political opposition has no effect on economic agendas.

Answer 23

False

Question 24

What was the impact of the Nationalization Act of 1970 in Pakistan?

Answer 24

It led to the nationalization of various industries.

Question 25

What is the primary focus of communism?

Answer 25

Attainment of equality and social justice ## Footnote Communism emphasizes the elimination of class distinctions and the redistribution of resources.

Question 26

True or False: In communism, religion is completely suppressed.

Answer 26

True ## Footnote Communism often views religion as an obstacle to social progress.

Question 27

Fill in the blank: Large corporations can _______ in a capitalist system.

Answer 27

flourish ## Footnote Capitalism allows for private ownership and competition, which can lead to the growth of large corporations.

Question 28

What is the role of the state in a socialist system?

Answer 28

Regulate and protect the interests of the people ## Footnote In socialism, the state is seen as responsible for ensuring that everyone has access to basic needs.

Question 29

What does the term 'status quo' refer to in political ideology?

Answer 29

The existing state of affairs ## Footnote It often implies maintaining current social, political, and economic conditions.

Question 30

List the two ends of the political spectrum mentioned.

Answer 30

* Authoritarian * Democratic ## Footnote These represent contrasting approaches to governance and individual freedoms.

Question 31

What is the main characteristic of fascism?

Answer 31

Authoritarian nationalism ## Footnote Fascism emphasizes strong, centralized control, often led by a dictator.

Question 32

True or False: Private property is completely prohibited in socialism.

Answer 32

False ## Footnote While socialism promotes collective ownership, some forms allow for personal property.

Question 33

What is the difference between left-wing and right-wing ideologies in terms of tradition?

Answer 33

Left-wing tends to be more open to change while right-wing is more reverent towards tradition ## Footnote This reflects differing attitudes towards social and political reforms.

Question 34

Fill in the blank: The _______ is a political ideology that seeks to minimize state intervention in the economy.

Answer 34

Laissez Faire ## Footnote This approach advocates for free markets and minimal government regulation.

Question 35

What is a key feature of a democratic regime?

Answer 35

Protection of individual liberties ## Footnote Democracies prioritize the rights and freedoms of individuals.

Question 36

List three characteristics of socialism.

Answer 36

* Economic equality * Social collectivism * Cooperation ## Footnote These principles aim to create a more equitable society.

Question 37

What does 'authoritarian' refer to in terms of governance?

Answer 37

Concentration of power in a leader or elite ## Footnote Authoritarian regimes often limit individual freedoms in favor of state control.

Question 38

True or False: The extreme left is characterized by radical changes to the political system.

Answer 38

True ## Footnote Extreme left ideologies often advocate for revolutionary changes.

Question 39

What is the primary economic system associated with capitalism?

Answer 39

Private ownership ## Footnote Capitalism is defined by the ownership of production by individuals or corporations.

Question 40

Fill in the blank: _______ is a form of socialism that seeks gradual reform rather than revolution.

Answer 40

Fabian Socialism ## Footnote This approach emphasizes gradual changes through democratic means.

Question 41

What does 'collectivism' mean in a political context?

Answer 41

The practice of prioritizing group goals over individual goals ## Footnote Collectivism often involves shared ownership or control of resources.

Question 42

Explain the term 'oligarchy'.

Answer 42

Rule by a small group of people ## Footnote Oligarchies concentrate power in the hands of a few, often leading to inequality.

Question 43

What is a common criticism of capitalism?

Answer 43

It can lead to economic inequalities ## Footnote Critics argue that capitalism often benefits the wealthy at the expense of the poor.

Question 44

What is the impact of political ideologies on government spending

Answer 44

Government spending depends on a political ideology. Socialism focuses on public welfare (health, education), while Dictatorial Capitalism emphasizes defense and international alliances.

Question 45

What types of taxation can political ideologies propose?

Answer 45

Political ideologies can propose direct taxes (on income) or indirect taxes (on goods/services).

Question 46

How does taxation affect businesses?

Answer 46

Taxation impacts businesses by increasing overhead costs and reducing profit margins.

Question 47

What are the effects of taxation on public resources?

Answer 47

Taxes fund public expenditures like roads, schools, hospitals, and parks, enhancing the competitive position of businesses.

Question 48

How do labor laws impact businesses?

Answer 48

Labor laws, influenced by political ideologies, regulate minimum wages, insurance, and safety. International labor standards can restrict imports from countries with poor labor conditions.

Question 49

What is the role of international relations and policies in business?

Answer 49

Policies supporting foreign investments boost business, but protectionism restricting imports may harm competitiveness.

Question 50

What is the connection between agriculture policies and political ideology?

Answer 50

Agricultural policies are tailored to political ideologies, focusing on managing economies suitable for agriculture sectors