KSLU Solved Question Papers
Business Environment
Previous Year Question Paper with Solution
B.Com. LL.B. (Five Years) · Sem 1
2021 Mar (70 marks) Examination
munotes.in
Mumbai
B.Com. LL.B. (Five Years) Sem 1 Business Environment 2021 Mar (70 marks) Question Paper with Solutions
First published on munotes.in on 1 November 2026.
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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2021 Mar (70 marks) examination.
Contents
The questions below are the paper as Karnataka State Law University set it at the 2021 Mar (70 marks) examination, in the order it was set.
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the 2021 Mar (70 marks) examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.
Total marks 70 · 14 questions answered
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q1Explain the factors of internal business environmental factors.[10]
Answer
For full marks, cover: the meaning of the internal environment and why it is controllable; each internal factor (value system, mission and objectives, management structure and style, power relationships, human resources, physical resources and technology, financial resources, marketing resources, corporate image, organisational culture), with its effect on business; how the factors become strengths and weaknesses; an example; and a conclusion.
Meaning
The internal environment of a business is made up of the forces inside the firm that affect its working and results. Unlike the external environment, these forces are largely within the control of the management. They can be changed by decisions on people, money, structure and policy. The internal factors decide what the firm is able to do, while the external factors decide what it ought to do.
Internal factors
1. Value system. The values and beliefs of the founders and top management shape the firm's policies. A firm that values honesty and quality will refuse short cuts, even when they would bring quick profit. Its values also decide how far it accepts social responsibility.
2. Mission and objectives. The mission states why the firm exists and the objectives say what it wants to achieve. They decide the business the firm is in, its priorities and the direction of its growth.
3. Management structure and style. The composition of the board, the levels of management and the way decisions are taken all matter. A clear structure with capable professional managers makes quick and sound decisions. A confused or over-centralised structure slows the firm down.
4. Internal power relationships. Relations between the board and the managers, among top managers, and between the owners and the professionals affect the firm's unity. Support from major shareholders gives management freedom to plan for the long term.
5. Human resources. The skills, attitudes, commitment and morale of employees are among a firm's most valuable assets. Good relations with workers and their unions raise productivity, while disputes and high staff turnover hurt it.
6. Physical resources and technology. Plant, machinery, buildings and the technology in use decide the firm's capacity, the quality of its products and its costs. Modern equipment gives an edge over rivals using old methods.
7. Financial resources. The firm's capital, reserves, credit standing and access to funds decide whether it can expand, survive a bad year or invest in new technology.
8. Marketing resources. The firm's brands, its distribution network and its sales force decide how well it can reach and hold customers.
9. Corporate image. The firm's reputation with customers, investors, suppliers and the public helps it raise money, win orders and recruit good people.
10. Organisational culture. The shared habits and ways of working inside the firm affect discipline, teamwork and willingness to change.
Internal factors as strengths and weaknesses
Each internal factor can be a strength or a weakness. A loyal, skilled workforce is a strength; out-of-date machinery is a weakness. In a SWOT analysis, the strengths and weaknesses come from the internal environment, while the opportunities and threats come from the external environment. A firm builds its plans on its strengths and works to remove its weaknesses.
Internal factors at a glance
| Internal factor | Effect when strong |
|---|---|
| Value system | Ethical, consistent policies |
| Mission and objectives | Clear direction |
| Management structure | Quick, sound decisions |
| Power relationships | Unity and long-term planning |
| Human resources | High productivity |
| Physical resources and technology | Capacity, quality and low cost |
| Financial resources | Ability to grow and survive |
| Marketing resources | Reach and customer loyalty |
| Corporate image | Trust of the public and investors |
| Organisational culture | Teamwork and readiness to change |
How management improves the internal environment
- Internal audit: the firm reviews each factor regularly to find what is working and what is not.
- Training and welfare: it raises skills and morale through training, fair pay and good working conditions.
- Modernisation: it replaces old equipment and adopts better methods in stages, as funds allow.
- Sound finance: it keeps reserves, controls costs and maintains a good record with lenders.
- Clear communication: it explains its mission and plans to employees, so that everyone works towards the same goals.
- Building the brand: it protects its image through honest dealing, prompt service and steady quality.
An example
A family-owned textile firm with old looms, a single sales agent and a tradition of quality has strengths and weaknesses side by side. Its reputation for quality is a strength. Its old machinery and narrow distribution are weaknesses. By investing in modern looms and appointing distributors in new States, the management can change its internal environment without waiting for any change outside.
Conclusion. The internal environment consists of the firm's values, mission, management, power relations, people, physical, financial and marketing resources, image and culture. These factors are largely under management's control, and they decide the firm's strengths and weaknesses. A business that builds up these factors is better able to use outside opportunities and resist outside threats.
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