UGC NET Commerce Business Environment and International Business Syllabus

Business Environment and International Business syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Business Environment and International Business in UGC NET Commerce, not a summary of it.

1. 1

   Concepts and Elements of Business Environment

   4 topics

   • Economic Environment
     • Economic systems
     • Economic policies (Monetary and fiscal policies)
   • Political Environment
     • Role of government in business
   • Legal Environment
     • Consumer Protection Act
     • Foreign Exchange Management Act (FEMA)
   • Socio-cultural Factors and Corporate Social Responsibility (CSR)
     • Influence of socio-cultural factors on business
     • Concept and importance of Corporate Social Responsibility (CSR)
2. 2

   International Business

   10 topics

   • Scope and Importance
     • Overview of international business
     • Importance of international business
   • Globalization and Modes of Entry
     • Drivers of globalization
     • Different modes of entry into international business
   • Theories of International Trade
     • Overview of international trade theories
   • Government Intervention in International Trade
     • Types of government intervention
     • Tariff and non-tariff barriers
   • India's Foreign Trade Policy
     • Overview of India's foreign trade policy
   • Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)
     • Types of FDI
     • Costs and benefits of FDI to home and host countries
     • Trends in FDI
     • India's FDI policy
   • Balance of Payments (BOP)
     • Importance of BOP
     • Components of BOP
   • Regional Economic Integration
     • Levels of Regional Economic Integration
     • Trade creation and diversion effects
     • Regional Trade Agreements: EU, ASEAN, SAARC, NAFTA
   • International Economic Institutions
     • Overview of IMF, World Bank, UNCTAD
   • World Trade Organisation (WTO)
     • Functions and objectives of WTO
     • Agriculture Agreement
     • General Agreement on Trade in Services (GATS)
     • Trade-Related Aspects of Intellectual Property Rights (TRIPS)
     • Trade-Related Investment Measures (TRIMS)

Business Environment and International Business flashcards for UGC NET Commerce

23 of 50 cards from the Business Environment and International Business deck — real questions with worked answers.

1. What is the 'business environment'?

   The sum total of all external and internal factors—economic, political, legal, social, technological and competitive—that influence a firm's decisions, operations and performance but lie largely outside its control.

2. Distinguish between the micro (operating) and macro (general) business environment.

   Micro environment = forces close to the firm affecting it directly (suppliers, customers, competitors, intermediaries). Macro environment = broad societal forces affecting all firms (economic, political-legal, socio-cultural, technological, demographic, natural).

3. What does the 'economic environment' of business consist of?

   Economic factors that affect a business: economic system, GDP growth rate, income levels, inflation, interest rates, monetary and fiscal policy, business cycles, savings and investment, and the country's balance of payments.

4. Name the three broad types of economic systems.

   Capitalist (market) economy, socialist (centrally planned) economy, and mixed economy (combination of private and public sectors, as in India).

5. What is the difference between fiscal policy and monetary policy?

   Fiscal policy uses government spending and taxation to influence the economy (controlled by the government/Ministry of Finance). Monetary policy uses money supply and interest rates (controlled by the central bank, RBI in India).

6. What is the 'political environment' of business?

   The political system, stability of government, political ideology of the ruling party, government attitude towards business, and political institutions that shape the conditions in which firms operate.

7. What is the 'legal environment' of business?

   The framework of laws, regulations, courts and administrative agencies that govern business conduct—company law, contract law, competition law, consumer protection, labour laws, taxation and intellectual property rights.

8. Which Indian law replaced the MRTP Act to regulate anti-competitive practices?

   The Competition Act, 2002, which established the Competition Commission of India (CCI), replacing the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969.

9. What are 'socio-cultural factors' in the business environment?

   Society's customs, traditions, values, beliefs, attitudes, language, religion, lifestyle, demographics, family structure and education levels that influence consumer behaviour and business practices.

10. Define Corporate Social Responsibility (CSR).

    The continuing commitment of a business to behave ethically and contribute to economic development while improving the quality of life of its workforce, their families, the local community and society at large.

11. What does Section 135 of the Companies Act, 2013 mandate regarding CSR in India?

    Companies meeting specified thresholds must spend at least 2% of their average net profits of the preceding three financial years on CSR activities.

12. State the applicability thresholds for mandatory CSR under the Companies Act, 2013.

    A company with net worth of ₹500 crore or more, OR turnover of ₹1,000 crore or more, OR net profit of ₹5 crore or more in the immediately preceding financial year must comply with CSR provisions.

13. Name the four levels of Carroll's CSR pyramid (bottom to top).

    Economic responsibility, legal responsibility, ethical responsibility, and philanthropic responsibility.

14. What is meant by the 'scope' of international business?

    International business covers all commercial transactions across national borders—export and import of goods and services, FDI, licensing, franchising, joint ventures, and cross-border management of operations.

15. State three reasons for the importance of international business.

    It enables earning of foreign exchange, optimum use of resources and economies of scale, access to larger markets, transfer of technology, and improved standards of living through wider product availability.

16. Differentiate domestic business from international business.

    Domestic business operates within one country (single currency, one legal system, homogeneous culture). International business operates across borders involving multiple currencies, legal systems, cultures, higher risk and greater complexity.

17. Define globalization in the context of international business.

    The process of increasing economic integration and interdependence among countries through the free flow of goods, services, capital, technology, labour and information across national borders.

18. List the main modes of entry into international markets.

    Exporting (direct/indirect), licensing, franchising, contract manufacturing, management contracts, turnkey projects, joint ventures, strategic alliances, and wholly owned subsidiaries (greenfield or acquisition).

19. Differentiate licensing from franchising as entry modes.

    Licensing grants rights to use intellectual property (patents, technology, brand) for a fee/royalty, usually in manufacturing. Franchising is a broader, ongoing arrangement transferring a whole business model with strict operating standards, common in services.

20. Compare a joint venture with a wholly owned subsidiary.

    A joint venture shares ownership, control, risk and profit with a local partner. A wholly owned subsidiary is 100% owned by the parent, giving full control but requiring greater investment and risk.

21. State Adam Smith's Theory of Absolute Advantage.

    A country should specialize in producing and exporting goods it can produce more efficiently (at lower absolute cost) than others, and import goods that other countries produce more efficiently.

22. State David Ricardo's Theory of Comparative Advantage.

    A country gains from trade by specializing in goods where it has the lowest opportunity cost (greatest relative efficiency), even if it has an absolute disadvantage in all goods.

23. What does the Heckscher-Ohlin (factor endowment) theory state?

    A country will export goods that intensively use its abundant and cheap factors of production and import goods that use its scarce factors—trade arises from differences in factor endowments.

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