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unit-5- BOE

unit-5- BOE

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Published by: elizabethchacko2009 on Sep 23, 2012
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UNIT - 5

4. 2. 3. & Business – Promoters – Regulator – Arbitrator – Sharer – Guidance and Assistance .GOVERNMENT & BUSINESS 1. Industrial revolution Private entrepreneurs – private gain Exploitation of consumers Relationship b/w Govt.

work culture.Factors Affecting Industrialization 1. Appropriate Technology and Managerial Techniques. Government Policies . rail. Socio – Cultural Factors (education. technical education) 2. 3. Economic and Infrastructural factors (sufficient economic resources. spending habits.roads. financial institution) 1. tele communication. saving.

. – Rules and regulations designed to implement the policy so as to achieve it objectives.Industrial Policy • IP refers to those actions of the state which influence growth of the industrial economy of a country. • Two components – Philosophy to determine the shape of the industrial growth.

1980 – New Industrial Policy. July. 1991 .• Pre Independence Policy • Post Independence Policy – Industrial Policy Resolution. 1948 – Industrial Policy Resolution. 1956 – New Industrial Policy Statement.

atomic energy. – Concession from Monopolies Act (Monopolies and restricted trade practices – MRTP) – Foreign Investment and Technology – Location Policy Liberalized – where the industry will set up – not near population) – Abolition of phased manufacturing programmes – Convertibility clause removed . coal etc. main sectors like rail. – Role of Public Sector – industries reduced from 18 to 8. mines. 1991 • Features of new policy – Abolition of Industrial Licensing – compulsory licensing not applied for small scale units.New Industrial Policy.

6. 4.Merits of new IP 1. 2. 3. Increase in efficiency Liberalization Increase in competition Higher Production New Role of Public sector Encouragement to small scale sector Protecting Interest of employees – National renewal fund for employees . 7. 5.

Fear of regional imbalances. 4. Ignoring social objects. . 5. 3.Demerits of New IP 1. 2. Privatization may not lead to efficiency. Reducing the role of Public sector. Concentration of economic power.

GLOBALIZATION OF BUSINESS • Globalization means integrating the economy of a country with the world economy. . • Expanding business globally • Developing products for global markets • Global sourcing of factors of production • Whole world as single market.

Business Freedom Availability of Facilities Resources Government Support Competitiveness Benefits of globalization 1. 5. Free flow of foreign products – reasonably priced goods. 3. Increasing productivity 3. 4. 5.Essentials of conditions for globalization 1. Global opportunities 7. 2. Cost and quality conscious 4. Direct foreign investment . Attract foreign capital 2. Spending more on R & D 6.

“Multinational corporations or companies are those enterprises whose management. Moreland.” . ownership and control are spread in more than one foreign country.MNCs • According to W.H.

B. E. C. D. Subsidiary Companies Branches Joint Venture Franchise Holders Turn Key Projects .Methods of Operations A.

Creating Employment Opportunities 6. Improving Balance of Trade 7. R & D Activity .Benefits of MNCs 1. Lower Cost of production 5. Philip to domestic Industries (collaboration with MNCs) 4. Supplement Capital 2. Transfer of Technology 3.

Disadvantages of MNCs i. ii. v. iii. Harmful for producers Harmful to consumers Bad Business ethics Currency manipulations Political dominance . iv.

• Change of ownership • Transfer of control • Management Reforms –MOUs(memorandum of understanding) .PRIVATIZATION • It implies the induction of private ownership in publicly owned enterprises.

Equal – Access Voucher programme (existed till 1990s) . Management – Employer Buyouts 5. of India sold shares to Suzuki) 4.Methods of Privatization 1. Sale to foreigners (Govt. Initial Public Offering (IPO) 2. sells shares in PSU to a strategic partner) 3. Strategic Sale (govt.

Need for more investment Professional Management No Interference in decision making Use of resources properly Personal touch . 3. 2. 4.Need / Rationale of Privatization 1. 5.

4. 3. 5. 7.Impact of Government Policy changes on Business and Industry 1. 8. 6. 2. Ease on entering business Increase in competitiveness Improved technology environment More demanding customers New marketing strategies Emphasis on human resources development Thrust on export Change in public sector policy .

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