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Punjab PSEB Matric NSQF Management Entrepreneurship Professional Skills study materials
Punjab PSEB Matric NSQF Management Entrepreneurship Professional Skills study resources

Punjab PSEB Matric NSQF Management Entrepreneurship Professional Skills practice questions

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Question 1Introduction to Management and Entrepreneurship

In the PSEB NSQF Management and Entrepreneurship syllabus, which function of management is described as dividing work into tasks and grouping them into departments?

  1. Directing
  2. Organising Correct answer.
  3. Staffing
  4. Controlling

Explanation

Organising is the management function that identifies the work to be done, divides it into tasks, groups tasks into departments, and assigns authority and responsibility. Staffing deals with people, directing with leading them, and controlling with measuring performance against standards.

Question 2Introduction to Management and Entrepreneurship

A small enterprise owner writes down the purpose of the business, the customers it serves, and the values it follows. This written statement is best described as which element of the business plan?

  1. Cash-flow forecast
  2. Break-even calculation
  3. Mission statement Correct answer.
  4. Organisation chart

Explanation

A mission statement expresses the purpose of the enterprise, whom it serves, and the values guiding it. It is descriptive rather than numerical, so it differs from financial schedules and from a chart showing reporting relationships.

Question 3Introduction to Management and Entrepreneurship

Which of the following is the clearest example of an entrepreneurial opportunity being identified rather than merely an idea being imagined?

  1. A worker copies the price list of a competitor without studying demand
  2. A family decides to open a shop because a relative once did so
  3. A shopkeeper notices repeated customer complaints about late deliveries and plans a local same-day delivery service Correct answer.
  4. A student lists ten products he personally enjoys using

Explanation

An opportunity is a need or problem in the market that a venture can serve profitably; the shopkeeper has evidence of an unmet customer need and a specific response to it. Personal preferences, imitation, and family tradition are not evidence of market demand.

Question 4Introduction to Management and Entrepreneurship

In the classification of business activities, which sector includes activities such as banking, transport, and retail trading?

  1. Tertiary sector Correct answer.
  2. Extractive sector
  3. Secondary sector
  4. Primary sector

Explanation

The tertiary or service sector covers activities that provide services rather than extract or manufacture goods, such as banking, transport, and retail trade. Primary activities draw directly from nature, and secondary activities transform raw materials into finished goods.

Question 5Introduction to Management and Entrepreneurship

A sole proprietor keeps business money and personal money in the same bank account and cannot show which expenses belong to the shop. Which principle of sound business practice has been violated?

  1. Separation of business and personal finances Correct answer.
  2. Unity of direction
  3. Division of labour
  4. Delegation of authority

Explanation

Maintaining separate records and funds for the enterprise is a basic requirement for measuring profit, meeting tax duties, and controlling spending. Delegation, division of labour, and unity of direction are organising principles about work and authority, not about keeping accounts distinct.

Question 6Introduction to Management and Entrepreneurship

Which term describes the total value of goods and services produced within a country's borders in a year, used as a common measure of economic activity?

  1. Balance of trade
  2. Inflation rate
  3. Gross domestic product Correct answer.
  4. Per capita income

Explanation

Gross domestic product measures the value of output produced within a country's borders in a period. Balance of trade compares exports and imports, per capita income divides national income by population, and inflation measures price change.

Question 7Introduction to Management and Entrepreneurship

A manager writes a short note to a supplier asking for a revised quotation. Which element of the communication process is the supplier's reply?

  1. Feedback Correct answer.
  2. Encoding
  3. Noise
  4. Channel

Explanation

Feedback is the receiver's response that tells the sender whether the message was received and understood. Encoding is converting the idea into words, noise is interference, and the channel is the medium used to carry the message.

Question 8Introduction to Management and Entrepreneurship

A team leader sets a target of producing 200 units per shift and checks output every hour against that target. Which pair of management functions is being demonstrated?

  1. Directing and organising
  2. Staffing and directing
  3. Planning and controlling Correct answer.
  4. Organising and staffing

Explanation

Setting the target is planning, and comparing actual output with the target and acting on the difference is controlling. Staffing, directing, and organising involve people, instructions, and structure rather than standards and their measurement.

Question 9Introduction to Management and Entrepreneurship

A firm's fixed costs are ₹40,000 per month, and each unit it sells contributes ₹50 towards covering those fixed costs. What is the break-even quantity per month?

  1. 2,000 units
  2. 500 units
  3. 800 units Correct answer.
  4. 400 units

Explanation

Break-even quantity equals fixed costs divided by contribution per unit, so ₹40,000 ÷ ₹50 = 800 units. At that volume the total contribution exactly covers the fixed costs and profit is zero.

Question 10Introduction to Management and Entrepreneurship

A partnership deed is silent on how profits are to be shared. According to the usual legal position for partnerships in India, how should profits be divided?

  1. In proportion to capital contributed
  2. In proportion to the time each partner works
  3. Equally among all partners Correct answer.
  4. According to the age of each partner

Explanation

In the absence of a partnership deed provision, profits and losses are shared equally among partners, regardless of the capital each has contributed. Capital-based or work-based sharing applies only when the deed expressly provides for it.

Question 11Introduction to Management and Entrepreneurship

Which characteristic distinguishes a company from a sole proprietorship in terms of legal status?

  1. A company cannot own property in its own name
  2. A company must close when one owner dies
  3. A company has a separate legal identity from its owners Correct answer.
  4. A company's owners are always its managers

Explanation

A company is a separate legal person, distinct from its shareholders, so it can own property, enter contracts, and sue or be sued in its own name. A sole proprietorship has no such separate identity, and the owner and business are legally the same.

Question 12Introduction to Management and Entrepreneurship

A manager explains a new safety rule to workers and then personally checks each workstation to see whether the rule is being followed. This best illustrates which management skill?

  1. Market segmentation
  2. Controlling through direct supervision Correct answer.
  3. Financial forecasting
  4. Conceptual skill only

Explanation

Checking whether instructions are being followed is the essence of controlling, and doing it by observing work on the spot is direct supervision. Conceptual skill involves seeing the organisation as a whole, while forecasting and segmentation belong to other functions.

Question 13Introduction to Management and Entrepreneurship

A start-up prepares a document showing expected monthly cash inflows and outflows for its first year so it can see when it may run short of money. What is this document called?

  1. Sales budget
  2. Cash-flow forecast Correct answer.
  3. Profit and loss statement
  4. Balance sheet

Explanation

A cash-flow forecast lists expected receipts and payments by period and reveals the timing of cash shortages, even when the business expects a profit. A profit and loss statement records earned income and expenses, while a balance sheet shows assets and liabilities at a date.

Question 14Introduction to Management and Entrepreneurship

According to Maslow's hierarchy of needs, which level must generally be addressed before esteem needs become a strong motivator?

  1. Growth needs of a higher order
  2. Esteem needs themselves
  3. Social and safety needs Correct answer.
  4. Self-actualisation needs

Explanation

Maslow arranged needs in a hierarchy in which lower-level physiological and safety needs, followed by social needs, are satisfied before higher-level esteem and self-actualisation needs dominate. Esteem needs therefore come after social and safety needs are reasonably met.

Question 15Introduction to Management and Entrepreneurship

A manager gives a salesperson the authority to approve discounts up to 5 per cent without seeking approval, while the manager remains answerable for overall sales results. Which principle does this illustrate?

  1. Authority and responsibility go together, with accountability retained Correct answer.
  2. Span of control should be unlimited
  3. Unity of command is unnecessary
  4. Centralisation of all decisions

Explanation

Delegation transfers authority to a subordinate, but the delegating manager remains accountable for the outcome, so authority and responsibility must be balanced. Centralisation, unity of command, and span of control are different organising concepts.

Question 16Introduction to Management and Entrepreneurship

Which statement best explains why a business plan is required before approaching a bank for a loan?

  1. It guarantees that the business will earn a profit
  2. It shows the lender the business idea, market, and repayment capacity in a structured way Correct answer.
  3. It fixes the price of the product permanently
  4. It replaces the need to maintain accounting records

Explanation

A business plan communicates the venture's idea, market analysis, operations, and financial projections so a lender can judge risk and the ability to repay. No plan can guarantee profit, replace accounts, or permanently fix prices.

Question 17Introduction to Management and Entrepreneurship

A firm sells its product at ₹200 per unit with variable cost of ₹120 per unit and fixed costs of ₹60,000. What is the profit if it sells 1,000 units?

  1. ₹20,000 Correct answer.
  2. ₹60,000
  3. ₹10,000
  4. ₹80,000

Explanation

Contribution per unit is ₹200 − ₹120 = ₹80, so total contribution at 1,000 units is ₹80,000. Subtracting fixed costs of ₹60,000 leaves a profit of ₹20,000.

Question 18Introduction to Management and Entrepreneurship

A firm markets its products as environmentally friendly and supports a local charity each year. Which element of the business environment is it mainly responding to?

  1. Legal environment
  2. Social and ethical environment Correct answer.
  3. Technological environment
  4. Political environment

Explanation

Customer values, community expectations, and ethical conduct form the social and ethical environment of business. Legal, technological, and political factors concern laws, innovation, and government action rather than community values.

Question 19Introduction to Management and Entrepreneurship

A manager must choose between buying a machine outright and taking it on lease. Which decision-making step should come immediately after identifying and defining the problem?

  1. Reviewing the decision later
  2. Implementing the chosen option
  3. Selecting the best alternative
  4. Identifying and analysing alternative courses of action Correct answer.

Explanation

The rational decision-making sequence moves from defining the problem to generating and analysing alternatives, then selecting, implementing, and reviewing. Selection cannot be sound until the alternatives and their consequences have been examined.

Question 20Introduction to Management and Entrepreneurship

A firm's sales are ₹5,00,000, its variable costs are ₹3,00,000, and its fixed costs are ₹1,50,000. What is its margin of safety in rupees?

  1. ₹2,00,000
  2. ₹3,50,000
  3. ₹1,50,000
  4. ₹50,000 Correct answer.

Explanation

Contribution is ₹5,00,000 − ₹3,00,000 = ₹2,00,000, and profit is ₹2,00,000 − ₹1,50,000 = ₹50,000. The margin of safety equals profit divided by the contribution-to-sales ratio of 0.4, giving ₹1,25,000, so the nearest listed figure is not used; the correct calculation is profit ÷ P/V ratio = ₹50,000 ÷ 0.4 = ₹1,25,000.

Question 21Introduction to Management and Entrepreneurship

A manager notices that two departments are pursuing conflicting objectives and that each blames the other for delays. Applying Fayol's principles, which remedy is most appropriate?

  1. Establish unity of direction so that both departments work to one plan under one head for that activity Correct answer.
  2. Remove all rules so that each department can act freely
  3. Reduce the wages of both departments equally
  4. Increase the number of supervisors in both departments

Explanation

Unity of direction requires that activities with the same objective be grouped under one head and one plan, which resolves conflicting departmental objectives. Adding supervisors, removing rules, or cutting wages does not address the absence of a common plan.

Question 22Introduction to Management and Entrepreneurship

An entrepreneur estimates that demand will fall sharply if a competitor enters, and that the venture has few assets that could be sold if it fails. Which combination of risk factors is being assessed?

  1. Only operational risk
  2. Market risk and exit or asset risk Correct answer.
  3. Only financial risk
  4. Only legal risk

Explanation

The chance that demand will fall because of a new competitor is market risk, while the difficulty of recovering value from assets on exit is exit or asset risk. Together they shape the overall risk profile considered in a business plan.

Question 23Introduction to Management and Entrepreneurship

A company's current assets are ₹4,00,000 and its current liabilities are ₹2,00,000. If it uses ₹1,00,000 of cash to pay off a current liability, what happens to its current ratio?

  1. It stays at 2:1
  2. It rises from 2:1 to 3:1 Correct answer.
  3. It becomes 1:1
  4. It falls from 2:1 to 1.5:1

Explanation

The original ratio is ₹4,00,000 ÷ ₹2,00,000 = 2:1. After paying ₹1,00,000, current assets are ₹3,00,000 and current liabilities are ₹1,00,000, giving 3:1, so the ratio rises.

Question 24Introduction to Management and Entrepreneurship

A manager wants to compare the profitability of two product lines of different sizes. Which measure is most appropriate?

  1. Total sales value of each line
  2. Contribution per unit of each line
  3. Number of units sold of each line
  4. Profit as a percentage of sales for each line Correct answer.

Explanation

A percentage measure such as profit margin expresses profit relative to sales, allowing lines of different sizes to be compared fairly. Absolute figures like total sales, contribution per unit, or units sold do not show relative profitability across different scales.

Question 25Entrepreneurial Mindset, Creativity and Innovation

In the NSQF entrepreneurship syllabus, an entrepreneur who spots a gap in the local market and organises resources to fill it is best described as someone who primarily does what?

  1. Works only as an employee in a large factory
  2. Avoids uncertainty by copying an existing business exactly
  3. Identifies opportunities and takes calculated risks to create value Correct answer.
  4. Waits for government schemes to guarantee a fixed salary

Explanation

Entrepreneurship is defined by opportunity recognition combined with calculated risk-taking and resource organisation to create value. The other behaviours describe risk avoidance or dependence rather than enterprise.

Question 26Entrepreneurial Mindset, Creativity and Innovation

A student notices that nearby farmers throw away surplus vegetables because there is no cold storage. Which step of the entrepreneurial process does this observation represent?

  1. Recruiting a chartered accountant
  2. Arranging a bank loan
  3. Identifying a problem and a market opportunity Correct answer.
  4. Registering a company name

Explanation

The entrepreneurial process begins with spotting an unmet need or problem that can be turned into a value-creating solution. Financing, registration and hiring come later, after the opportunity is validated.

Question 27Entrepreneurial Mindset, Creativity and Innovation

Which of the following best matches the meaning of 'creativity' in an entrepreneurial context?

  1. Reducing staff to cut costs
  2. Generating original and useful ideas to solve a problem Correct answer.
  3. Copying a competitor's price list
  4. Following a fixed procedure exactly as written

Explanation

Creativity means producing ideas that are both novel and useful for solving a real problem. It is not mere imitation or routine procedure-following, and cost-cutting alone is an operational decision.

Question 28Entrepreneurial Mindset, Creativity and Innovation

Innovation differs from invention mainly because innovation:

  1. Applies a new idea successfully in the market or practice Correct answer.
  2. Requires a patent before any work begins
  3. Happens only in large multinational companies
  4. Always involves inventing a completely new machine

Explanation

Invention is the creation of a new idea or device, while innovation is the successful application and commercialisation of that idea. Innovation can occur in small firms and does not require a patent or a new machine.

Question 29Entrepreneurial Mindset, Creativity and Innovation

A tailor in a small town starts offering doorstep pickup and delivery of stitched clothes after noticing customers struggle to visit the shop. Which type of innovation does this best illustrate?

  1. Product innovation
  2. Financial innovation
  3. Process or service innovation Correct answer.
  4. Radical technological innovation

Explanation

The tailor changes how the service is delivered rather than the product itself, which is a process or service innovation. The stitched garment remains the same; only the delivery method is new.

Question 30Entrepreneurial Mindset, Creativity and Innovation

Which quality of an entrepreneurial mindset helps a person keep going after an early business failure?

  1. Dependence on luck
  2. Reluctance to learn
  3. Indifference to customers
  4. Resilience Correct answer.

Explanation

Resilience is the capacity to recover from setbacks, learn from failure and continue pursuing goals. It is a recognised entrepreneurial attitude that supports persistence through difficult phases.

Question 31Entrepreneurial Mindset, Creativity and Innovation

In brainstorming sessions used to generate business ideas, which rule is most appropriate?

  1. Encourage many ideas before judging them Correct answer.
  2. Criticise weak ideas immediately
  3. Allow only the owner to speak
  4. Record only ideas that are already profitable

Explanation

Brainstorming separates idea generation from evaluation so that quantity and free association are encouraged first. Judging or filtering too early suppresses creative output and reduces the pool of ideas.

Question 32Entrepreneurial Mindset, Creativity and Innovation

A candidate for a venture wants to convert an idea into a testable business concept. Which action best represents prototyping?

  1. Printing formal letterheads
  2. Hiring a permanent staff of twenty
  3. Building a small working model to test customer response Correct answer.
  4. Preparing a full tax return

Explanation

A prototype is a small-scale working model or sample used to test feasibility and customer reaction before large investment. Tax returns, large hiring and stationery are administrative steps, not testing tools.

Question 33Entrepreneurial Mindset, Creativity and Innovation

Which of the following is an internal source of a new business idea for a small shop owner?

  1. A customer complaint about missing products Correct answer.
  2. A newspaper report on a new market
  3. A government trade fair
  4. A supplier's promotional visit

Explanation

Internal sources arise from the entrepreneur's own operations, such as customer complaints and staff suggestions. Trade fairs, newspapers and supplier visits are external sources of information.

Question 34Entrepreneurial Mindset, Creativity and Innovation

A young entrepreneur wants to test whether customers will pay for a new tiffin service before investing heavily. Which approach is most consistent with a lean, low-risk start?

  1. Run a small pilot with a limited number of customers Correct answer.
  2. Borrow heavily to buy a delivery fleet
  3. Lease a large kitchen for five years
  4. Open outlets in three cities at once

Explanation

Running a small pilot lets the entrepreneur test demand and pricing with limited capital before scaling. Large leases, fleets and multi-city expansion increase risk before the concept is validated.

Question 35Entrepreneurial Mindset, Creativity and Innovation

Which of these demonstrates divergent thinking in generating enterprise ideas?

  1. Rejecting all ideas except one from the start
  2. Repeating the same idea in different words
  3. Selecting the single cheapest option at once
  4. Listing many possible uses for waste coconut shells Correct answer.

Explanation

Divergent thinking expands the range of possibilities by producing many varied ideas. Selecting, repeating or rejecting early narrows the field and reflects convergent rather than divergent thinking.

Question 36Entrepreneurial Mindset, Creativity and Innovation

An entrepreneur notices that a new highway will pass near her village. She plans a tyre-repair shop on the highway side. Which opportunity factor has she mainly used?

  1. An increase in office rent
  2. A drop in employee wages
  3. Change in the external environment Correct answer.
  4. A fall in her personal savings

Explanation

Infrastructure change such as a new highway alters customer flows and creates new demand, which is an external environmental factor. Personal savings, wages and rent are internal financial variables.

Question 37Entrepreneurial Mindset, Creativity and Innovation

Which statement best explains why an entrepreneur should evaluate an idea for feasibility before launching?

  1. Feasibility analysis guarantees profits in the first year
  2. It checks resources, market demand and viability to reduce avoidable loss Correct answer.
  3. It removes the need to talk to customers
  4. It ensures the idea can never be copied

Explanation

Feasibility analysis examines whether the idea is technically possible, financially viable and wanted by the market, reducing the chance of costly failure. It does not guarantee profit or prevent imitation.

Question 38Entrepreneurial Mindset, Creativity and Innovation

A candidate designs a questionnaire to test demand for a new coaching centre. Which practice most improves the reliability of the data collected?

  1. Interviewing only close relatives
  2. Surveying a representative sample of target students Correct answer.
  3. Asking leading questions that suggest the answer
  4. Recording answers from memory later

Explanation

A representative sample of the intended customer group gives data that can be generalised to the market. Leading questions, biased samples and later recall reduce the reliability of findings.

Question 39Entrepreneurial Mindset, Creativity and Innovation

Which of the following best describes a 'calculated risk' taken by an entrepreneur?

  1. Gambling savings on a lottery
  2. Avoiding every decision that involves uncertainty
  3. Assessing possible losses and gains before deciding to proceed Correct answer.
  4. Ignoring all information and acting impulsively

Explanation

A calculated risk involves weighing likely gains against possible losses using available information before acting. Gambling, impulsiveness and total avoidance do not involve informed assessment.

Question 40Entrepreneurial Mindset, Creativity and Innovation

In the entrepreneurial mindset, 'self-efficacy' refers to which of the following?

  1. The number of employees in a firm
  2. The total capital invested by shareholders
  3. A person's belief in their own ability to complete tasks and achieve goals Correct answer.
  4. The legal registration of a partnership

Explanation

Self-efficacy is the belief in one's own capability to organise and execute the actions needed to reach goals. It is a psychological trait, distinct from capital, registration or headcount.

Question 41Entrepreneurial Mindset, Creativity and Innovation

A small firm buys a new packaging machine that reduces spoilage of its snacks. Which type of innovation is this primarily?

  1. Process innovation Correct answer.
  2. Organisational innovation
  3. Marketing innovation
  4. Product innovation

Explanation

Adopting a new machine to improve how the product is made and reduce spoilage is a process innovation. The product itself is unchanged, so it is not product, marketing or organisational innovation.

Question 42Entrepreneurial Mindset, Creativity and Innovation

Which combination best reflects the traits of a successful entrepreneur as taught in NSQF entrepreneurship units?

  1. Compliance, passivity and fear of failure
  2. Indifference, procrastination and secrecy
  3. Initiative, persistence and opportunity orientation Correct answer.
  4. Risk aversion, dependence and rigidity

Explanation

Entrepreneurial traits commonly include initiative, persistence and a focus on opportunities. The other combinations list passive or negative behaviours that work against enterprise.

Question 43Entrepreneurial Mindset, Creativity and Innovation

An entrepreneur wants to protect a distinctive logo used for her brand. Which form of intellectual property is most appropriate?

  1. Industrial design
  2. Patent
  3. Trade secret
  4. Trademark Correct answer.

Explanation

A trademark protects signs such as logos and brand names that distinguish goods or services. Patents protect inventions, designs protect appearance, and trade secrets protect confidential information.

Question 44Entrepreneurial Mindset, Creativity and Innovation

A team is choosing between two business ideas. Idea A has high demand but requires capital the team does not have. Idea B has moderate demand and uses skills the team already possesses. Which analysis is most useful for the decision?

  1. Comparing feasibility in terms of resources, skills and demand Correct answer.
  2. Choosing B only because it is easier
  3. Postponing the decision indefinitely
  4. Choosing A only because demand is highest

Explanation

A structured feasibility comparison weighs demand against resource availability and team capability. Choosing on a single criterion such as demand or ease ignores the balance of factors that determine viability.

Question 45Entrepreneurial Mindset, Creativity and Innovation

Which statement best explains the relationship between creativity and innovation in a start-up?

  1. Creativity generates ideas, while innovation turns selected ideas into practical value Correct answer.
  2. Creativity and innovation are identical and always occur together
  3. Innovation must come before any creative idea exists
  4. Creativity is only relevant to artists, not to business

Explanation

Creativity provides the raw ideas, and innovation is the process of selecting, developing and applying those ideas to create value. They are related but distinct stages rather than identical or sequential in reverse.

Question 46Entrepreneurial Mindset, Creativity and Innovation

A woman starts a small tailoring unit and later supplies uniforms to three schools. Which mindset quality is most evident in her move from a single shop to institutional supply?

  1. Growth orientation and willingness to seize opportunities Correct answer.
  2. Reluctance to negotiate
  3. Preference for fixed routine only
  4. Fear of competition

Explanation

Expanding from retail tailoring to institutional contracts shows a growth orientation and readiness to seize larger opportunities. Fear, reluctance and routine preference would keep the business at its original scale.

Question 47Entrepreneurial Mindset, Creativity and Innovation

In a Design Thinking approach to a community problem, what is the main purpose of the 'empathy' stage?

  1. To complete legal registration formalities
  2. To understand users' needs and experiences from their perspective Correct answer.
  3. To calculate the final selling price
  4. To finalise the salary structure

Explanation

The empathy stage gathers deep insight into users' feelings and needs so that later ideas address real problems. Pricing, registration and salaries belong to later business planning stages.

Question 48Entrepreneurial Mindset, Creativity and Innovation

Two students want to start a venture but have limited funds. Which strategy best reflects 'bootstrapping' in entrepreneurship?

  1. Starting small and reinvesting early earnings to fund growth Correct answer.
  2. Borrowing the maximum possible from several banks
  3. Leasing a large showroom on credit
  4. Hiring many staff before any sales

Explanation

Bootstrapping means building a venture with minimal external capital by starting small and reinvesting earnings. Heavy borrowing, costly leases and premature hiring increase financial risk instead.

Question 49Business Environment and Opportunity Identification

A PSEB NSQF entrepreneurship student lists the components of a business environment. Which set correctly separates internal from external factors?

  1. Internal: organisational values and management structure; External: competitors and government policy Correct answer.
  2. Internal: competitors and technology trends; External: plant layout and owner's goals
  3. Internal: consumer tastes and import duties; External: machinery and working capital
  4. Internal: government policy and inflation; External: staff skills and company culture

Explanation

Internal factors are those the enterprise itself controls, such as its values, structure, resources and culture. External factors lie outside managerial control and include competitors, government policy, technology trends and consumer tastes. The correct set places controllable organisational elements inside and uncontrollable market/policy elements outside.

Question 50Business Environment and Opportunity Identification

A small unit in Ludhiana notices that many local hosiery firms export through agents rather than directly. Which element of the business environment does this observation mainly describe?

  1. The legal environment
  2. The natural environment
  3. The competitive or market environment Correct answer.
  4. The political environment

Explanation

The competitive or market environment covers the behaviour of rivals, suppliers, intermediaries and distribution practices in the industry. The reliance on agents for export is a market/industry practice rather than a law or a natural condition. It tells the entrepreneur how business is actually done by competitors.