A-AS Level (CIE) Business Studies Paper-1: Specimen Questions with Answers 40 - 41 of 50

Question 40

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Discuss the business environment in which the business operates.

Explanation

Business environment refers to the aggregate of all forces, factors and institutions which are beyond the control of an individual and are external to the organization but influences the functioning of an enterprise. Thus, Business environment refers to those conditions under which a business operates.

Components of business environment are:

  • Demographic environment: Demographic environment refers to the size and behavior of the population which emerges as a vital factor in influencing the decisions of the business.
  • Economic environment: It refers to the overall economic factors like economic planning, policies, structure which have a serious impact on the functioning of the business.
  • Technological environment: It consists of the computerized operations, modern business organizations which helps in minimizing the defects in the products and can ensure organization stability and growth

Question 41

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Explain the financial rewards that motivate employees

Explanation

Financial rewards refer to the monetary benefits received by the employee as a result of good performance. These rewards of the employees are linked with the organizational goals. Financial rewards increase the chances of an employee staying in the organization and the organization provides employee with a sense of familiarity and stability.

Different Types of Financial Rewards Given to Employees Are

  • Pay and allowances: The basic form of incentive is salary and besides salary an employee receives DA, traveling allowance and other allowances.
  • Productivity linked with wages: Wage incentives plans are linked with productivity at individual level. Quantity of incentive depends on the amount of work done.
  • Bonus: Such incentives are offered during the time of festivals over and above wages or salary to motivate employees.

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