Unit-2

ENTREPRENEURAL ENVIRONMENT AND POLICIES

Business Environment-Role of family and society-Entrepreneurship as a career-

Entrepreneurship Development Training and other support organizational services-
Central and state Government Industrial- International Business

Introduction to Business Environment

Business Environment is the most important aspect of any business. The forces which constitute the
business environment are its suppliers, competitors, media, government, customers, economic
conditions, investors and multiple other institutions working externally.

Business Environment:

The word 'business environment' indicates the aggregate total of all people, organisations and
other forces that are outside the power of industry but that may affect its production.

Importance of Business Environment:

The significance of the business environment and its perception by managers can be understood
if we contemplate the below-mentioned following points:
(A) It Helps in Identifying Opportunities and Making First Mover Advantage

 The environment provides numerous opportunities, and it is necessary to identify the

opportunities to improve the performance of a business.
 Early identification gives an opportunity to an enterprise be the first to identify
opportunity instead of losing them to competitors. Example: ‘Airtel’ identified the need
for fast internet and took first-mover advantage by providing 4G speed to its users
followed by Vodafone and Idea.
 Asian paints lost market share to Nerolac because it failed to match its technology.
(B) It Helps the Firm Identify Threats and Early Warning Signals

 The business environment helps in understanding the threats which are likely to happen
in the future.
 Environmental awareness can help managers identify various threats on time and serve as
an early warning signal. Example: Patanjali products have become a warning signal to
the rest of the FMCG
  The sector to develop similar products. Similarly, if an Indian firm finds that a foreign
multinational is entering the Indian market with new substitutes; it needs to prepare
accordingly.
 Chinese mobile phones have become a threat for Indian mobile phone manufacturers.
(C) It Helps in Tapping Useful Resources

 Business and industry avail the resources (inputs) from the environment and convert them
into usable products (outputs) and provide to society.
 The environment provides various inputs (resources) the like finance, machines, raw
materials, power and water, labour, etc.
 The business enterprise provides outputs such as goods and services to the customers,
payment of taxes to the government, to investors and so on.
Example: With the demand for the latest technology, manufacturers will tap the resources from
the environment to manufacture LED TVs and Smart TVs rather than collecting resources for
colour or Black & White TVs.
(D) It Helps in Coping With Rapid Changes

 The business environment is changing very rapidly, and the industry is getting affected
by changing market conditions.
 Turbulent market environment, less brand loyalty, divisions of markets, changes in
fashions, more demanding customers, and global competition are some examples of
changing the business environment.
Example: Jack Ma started Alibaba as he could see the potential of interest in E-Commerce.
(E) It Helps in Assisting in Planning and Policy Formulation

 The business environment brings both threats and opportunities to a business.

 Awareness of business environment helps in deciding future planning or decision
making.
Example: Multiple entries of Chinese phones like VIVO, Gionee, OPPO, etc. have posed a
threat to local players like Micromax, Karbonn, Lava etc. to think afresh how to deal with the
situation.
(F) It Helps in Improving Performance

 Environmental studies reveal that the success of any enterprise is closely bound with the
changes in the environment.
 The enterprises which monitor and adopt suitable business practices not only improve
their performance but become leaders in the industry also.
Example: Apple has been successful in maintaining its market share due to its proper
understanding of the environment and making suitable innovations in its products.
Features of Business Environment:
(A) The totality of External Forces

 Business environment includes everything which is outside the organisation.

 If we add all these forces, they will form a business environment.
Example: When Pepsi and Coca-Cola got permission to set up their business in India, it was an
opportunity for them and threat for local manufacturers like gold spot, camp-cola etc.
(B) Specific and General Forces

 Specific forces are those forces which directly affect the operational activities of the
business enterprise.
 Example: Suppliers, Customers, Investors, Competitors, Financers etc.
 General forces are those forces which indirectly affect the functioning of business
enterprises.
Example: Economic, Social, Political, Legal and Technological conditions.
(C) Inter-relatedness

 Different forces of business environment are interrelated to each other.

 One component of the business environment affects the functioning of other components.
Example: The increased life expectancy of people and awareness of health consciousness has
increased the demand for many health products like diet coke, olive oil, and so many health
products.
(D) Dynamic Nature
The business environment is dynamic in nature and keeps on changing in terms of :
(a) Technological improvement,
(b) Shifts in consumer preferences,
(c) The entry of new competition in the market.
Example: Many established companies in FMCG (Fast Moving Consumer goods) sector are
focusing on producing the goods with natural ingredients with the entry of ‘Patanjali Products’.
(E) Uncertainty

 The changes in the business environment cannot be predicted accurately because of

future uncertainties.
 It is very difficult to predict the changes in the economic and social environment.
Example: There has been a sharp decline in the prices of Android smartphones due to the entry
of many new companies.
(F) Complexity

 All forces of the Business environment are interrelated and dynamic, which makes it
difficult to understand.
  Complex nature of Business environment can be understood if we study it in parts.
 Example: Increase in goods and service tax to 15 % would increase the revenue of the
government (economic), which would help the government to improve social being of
people (social) and reduce the personal disposable income of rich people and thereby
controlling inflation.
(G) Relativity

 Business Environment differs from place to place, region to region and country to
country.
Example: In China, the electricity to the industry is provided at cheaper rates as the consumption
increases and hence, it leads to mass production whereas, in India, it is otherwise, higher
consumption of electricity leads to costly electricity which results in lower production & higher
cost of production.

Role of Family and Society

Hoselitz's need for openness of a system. McClelland's need for exibility in a

role of relation implied the need for the possibility of mobility with in a system for
entrepreneurship development.

In contrast, group of scholar who express the view that a lack of mobility
possibilities promotes entrepreneurship. Some even speak of entrepreneurship as in
to a action in a rigid social system. Third opinion is the combination of exibility
and the denial of social mobility. It is also printed out that the degree and nature of
social mobility alone is not likely to inuence entrepreneurship, it as determined by
other non economic factors.

 Marginality:

Scholars hold a strong view that social marginalized also promotes

entrepreneurship. They believe that individuals are grouped on the perimeter of a
given social system or between two social systems provide the personnel to assume
the entrepreneurial roles.
 People may be drawn from religious cultural, ethinic or migrant minority
groups and their marginal social position is generally believed to have
psychological e ects which make entrepreneurship particularly attractive for them.

 Security:

Entrepreneurial security is an important facilitator of entrepreneurial behaviors.

Scholars are not consensus (same) on the amount of security that is needed.

We also regard security to be a signi cant factor for entrepreneurship

development. This is reasonable too because if individuals are fearful of tossing
their economic assets.

Psychological factors:

 Need achievement:

David McClelland's theory of need achievement states that, a constellation

(gathering) of personality characteristics which are indicative of high need
achievement is the major determinant of entrepreneurship development.

'Average level of need achievement in a society is relatively high, one could

expect a relatively high amount of ED in the society'.

To encourage the impact of motivation for achievement, many training

programs are organized by the SIEI - Small Industries Extension training Institute.

 Withdrawal of status respect:

Hagen believes the initial condition leading to eventual entrepreneurial behavior is

the loss of status by a group. He postulates four types of events that can produce
status withdrawals,
 3. The group may be displaced by force,

4. It may have its valued symbols denigrated

5. It may drift from into a situation of status inconsistency.

6. It may not be accepted the expected status or migration in a new society.

The further postulates that with drawal of status of respect would give rise to
four personality types:

1. Retreatist: he who continues to work in a society but remains di erent to his

work and position.

2. Ritualist: he who adopts a kind of defensive behavior and acts in the way
accepted and approved in his society but no hopes of improving his position.

3. Reformist: he is a person who foments a rebellion and attempts to establish a

new society.

4. Innovator: he is a person who is creative individual and is likely to be an

entrepreneur.

Hagen maintains that once status withdraws has occurred, the sequence of
change information of personality is set in motion, he refers that 'Status with drawl
takes a long period of time as much as 4 or 5 generations to result in the emergence
of ED'.

 Government Actions (Factors):

 Government by its actions or failure to act does in uence both the economic
and non-economic factor for entrepreneurship. Any interested government in
economic development can help through its clearly expressed policies, promoting
entrepreneurship, creating basic facilities, utilities and services providing
incentives and concessions, providing good facilitative socio economic setting to
minimize the risks for entrepreneur.'to conclude, in the societies where the
government was committed to their economic development, entrepreneurship
automatically ourishes'.
Entrepreneurship Development Training and other support organizational
services:
Entrepreneurship Development Training and Other
S u p p o r t Organisational Services
Important objectives:

Develop and strengthen their entrepreneurial quality (i.e.,) motivation or need for the
achievement.

A n a l y z e e n v i r o n m e n t a l s e t u p r e l a t i n g t o s m a l l i n d u s t r y a n d s m a l l busines
s.

Select product

Formulate project for the product.

Under st and t he pr o cess and pr o cedur e invo lved in s et t ing up an s ma l l enterprise.

Know the sources of help and support available for starting a small scaleindustry.

Acquire the necessary managerial skills required to run a small enterprise.

To know the pros and cons of becoming an entrepreneur.

Entrepreneurship Development Programme (EDP) is a programme which helps in developing

entrepreneurial abilities. The skills that are required to run a business successfully is developed
among the students through this programme. Sometimes, students may have skills but it requires
polishing and incubation.
EDP is an effort of converting a person to an entrepreneur by passing him through
thoroughly structured training. An entrepreneur is required to respond appropriately to the
market and he/she is also required to understand the business needs. The skills needed are varied
and they need to be taken care in the best possible way. EDP is not just a training programme but
it is a complete process to make the possible transformation of an individual into an
entrepreneur. This programme also guides the individuals on how to start the business and
effective ways to sustain it successfully.
 Objectives of EDP
The objective of this programme is to motivate an individual to choose the entrepreneurship as a
career and to prepare the person to exploit the market opportunities for own business
successfully. These objectives can be set both in the short-term and long-term basis.
 Short-term objectives: These objectives can be achieved immediately. In the short-term, the
individuals are trained to be an entrepreneur and made competent enough to scan the existing
market situation and environment. The person, who would be the future entrepreneur, should
first set the goal as an entrepreneur. The information related to the existing rules and regulations
is essential at this stage.

 Long-term objectives: The ultimate objective is that the trained individuals successfully
establish their own business and they should be equipped with all the required skills to run their
business smoothly.
The overall objectives of EDP are mainly to help in the rapid growth of the economy by
supplying skilled entrepreneurs. This programme primarily aims at providing self-employment to
the young generation.
Roles of EDP
An Entrepreneurship Development Programme primarily plays four roles to help an individual to
become an entrepreneur. They are:
 Stimulatory Role: It aims at influencing people in large number to be the entrepreneur. This
includes:
1. developing managerial, technical, financial, and marketing skill
2. inculcating personality traits
3. promotes and reforms entrepreneurial behavior and values
4. identifying a potential entrepreneur applying scientific methods
5. motivational training and building a proper attitude
6. strengthening the motive of a person and giving recognition
7. the valuable know-how of the local products and the processes help in the selection of
products, preparation of project reports

 Supportive Role: It helps in the following ways:

1. registration of the business
2. procurement of fund
3. Incubation support
4. Team building and team development support
5. Mentorship and guidance from industry experts
6. Providing tax relief, subsidy, government schemes etc.
7. guidance in product marketing
8. support for management consultancy

 Sustaining Role: It aims at providing an effective safeguard to businesses to sustain against the
cut-throat market competition. This includes:
1. help in modernization, expansion, and diversification
2. additional financing for further development
3. Global Networking Opportunities
 4. creating new marketing processes
5. helping access to improved services and co-working centers

 Socio-economic Role: It aims at upgrading the socio-economic status of the public and
includes:
1. identifying entrepreneurial qualities in practicality
2. creating employment opportunities in micro, small, and medium industries on an immediate
basis
3. arresting concentration of industries by supporting regional development in a balanced manner
4. focusing on the equal distribution of income and wealth of the nation
5. channelizing the latent resources for building an enterprise
Program Structure
Phase 1: Starting your startup hypothesis:
Idea Validation Workshop
 Introduction
 Stating your startup problem/hypothesis
 Understating Scenarios
 Idea feasibility analysis
 Idea Validation
 Closing pitches
Business Model Canvas Part 1
 Introduction
 Case Study
 Understating the nine blocks
 Visualizing your startup idea
 Developing your model
 Case Study
Phase 2: Testing your startup hypothesis:
Value proposition Design
 Introduction
 Creating a product/offering that sells
 Understating Customers
 Creating better values
 Creative disruption
 Case Study
Persona Development
Customer Empathy Map
 Introduction
 Creating customer personas
Customer Journey
 Introduction
 Understanding pain points
 Understanding gain creators
 Understanding pain relievers
 Empathy Mapping
 Drafting
 Introduction
 A day in the life of customers
 Visualization
Phase 3: Evaluating your startup environment:
Blue ocean strategy
 Introduction
 Scanning the environment
 Competition analysis
 Four action frame work
 Buyer utility map
 Strategy Canvas
Business Model Canvas Part 2
 Introduction
 Industry Forces
 SWOT analysis
 Business model environment
 Testing the nine blocks
 Drafting
Prototyping
 Introduction
 Understanding MVP
 Product Design
 Service Design
 Market testing
 Development
Phase 4: Legals and government support:
Company Registration
 Introduction
 Types of legal entities
 Making the choice
 Paper Work and Costs
Intellectual Property Rights
 Introduction
 Indian IPR Law
 Types of IPR
Government Policies
Marketing Metrics
 Introduction
 Startup India Program
 Standup India Program
 MSME's
 Introduction
 Get, Keep, Grow Cycles
 Web Platform Strategies
 Physical Platform Strategies
Filing For Patent
 Introduction
 Forms required
 Costs Involved
Investor Engagement
 How to tell your story
 Metrics that matter
 Art of negotiations

Central and state Government Industrial policies and Regulations:

Central and State Government Industrial Policies and Regulations Dr

Central and State Government Industrial Policies and Regulations Dr. Mohamed Riyazh Khan
DoMS
2 INDUSTRIAL POLICY OF INDIA
INDUSTRIAL POLICY RESOLUTION 1948 (6 April, 1948)INDUSTRIAL POLICY
RESOLUTION (30th April, 1956)INDUSTRIAL POLICY FEB 2, 1973INDUSTRIAL POLICY
DEC 23, 1977INDUSTRIAL POLICY STATEMENT OF JULY, 1980INDUSTRIAL POLICY,
JULY 24, 1991
3 1. INDUSTRIAL POLICY RESOLUTION 1948 (6 April, 1948)
The Resolution emphasized at the following:1. The importance to the economy of securing a
continuous increase in production2. Its equitable distribution3. State must play of progressively
activerole in the development of Industries
4 INDUSTRIAL POLICY RESOLUTION 1948…2
4. It laid down that besides arms and ammunition, atomic energy and railway transport, which
would be the monopoly of the Central Government, the State would be exclusively responsible
for the establishment of new undertakings ,the State itself found it necessary to secure the
cooperation of private enterprise
5 INDUSTRIAL POLICY RESOLUTION 1948…3
5. The rest of the industrial field was left open to private enterprise though it was made clear that
the State would also progressively participate in this field
6 2. INDUSTRIAL POLICY RESOLUTION (30th April, 1956)
1. Improving living standards and workingconditions for the mass of the people2. To reduce
disparities in income and wealth3. To prevent private monopolies and concentration of economic
power in different fields in the hands of small numbers of individuals
7 INDUSTRIAL POLICY RESOLUTION, 1956
4. The State will progressively assume a predominant and direct responsibility for setting up new
industrial undertakings and for developing transport facilities5. Undertake State trading on an
increasing scale6. At the same time private sector will have the opportunity to develop and
expand
8 INDUSTRIAL POLICY RESOLUTION, 1956
7. The principle of cooperation should be applied whenever possible and a steadily increasing
proportion of the activities of the private sector developed along cooperative lines8. The
adoption of the socialist pattern of society as the national objective9. The need for planned and
rapid development
9 INDUSTRIAL POLICY RESOLUTION, 1956
10. All industries of basic and strategic importance, or in the nature of public utility services,
should be in the public sector11. It is always open to the State to undertake any type of industrial
production12. Categorization of industries:i) In the first category will be industries the future
development of which will be the exclusive responsibility of the State
10 INDUSTRIAL POLICY RESOLUTION, 1956
ii) The second category will consist of industries which will be progressively state-owned and in
which the State will, therefore, generally take the initiative in establishing new undertakings, but
in which private enterprise will also be expected to supplement the efforts of the State
11 INDUSTRIAL POLICY RESOLUTION, 1956
iii) The third category will include all the remaining industries, and their future development
will, in general, be left to the initiative and enterprise of the private sector13.The Government of
India would stress the role of cottage and village and small scale industries in the development of
the national economy14. Disparities in levels of development between different regions should
be progressively reduced
12 3. INDUSTRIAL POLICY FEBRUARY 2, 1973
The Industrial Policy Resolution of 1956 still remained valid, but certain structural distortions
had crept in the systemThe new policies were hence directed towards removing these
distortions3. It provided for a closer interaction between the agricultural and industrial sectors
13 INDUSTRIAL POLICY, 19734. Accorded the highest priority to the generation and
transmission of power5. An exhaustive analysis of industrial products was made to identify
products which are capable of being produced in the small scale sector6. The list of industries
exclusively reserved for the small scale sector was expanded from 180 items to more than 500
items
14 INDUSTRIAL POLICY, 19737. Within the small scale sector, a tiny sector was also defined
with investment in machinery and equipment upto Rs.1 lakh and situated in towns with a
population of less than 50,000 according to 1971 census figures, and in villages8. Special
legislation to protect cottage and household industries was also proposed to be introduced
15 INDUSTRIAL POLICY, 19739. It was also decided that compulsory export obligations,
merely for ensuring the foreign exchange balance of the project, would no longer be insisted
upon while approving new industrial capacity10. In the areas of price control of agricultural and
industrial products, the prices would be regulated to ensure an adequate return to the investor
16 4. INDUSTRIAL POLICY DECEMBER 23, 1977
Industrial Policy Highlights on producing inputs needed by a large number of smaller units and
making adequate marketing arrangementsThe nucleus plant would also work for upgrading the
technology of small units3. The Government would promote the development of a system of
linkages between nucleus large plants and the satellite ancillaries
17 INDUSTRIAL POLICY, 19774.To boost the development of small scale industries, the
investment limit in the case of tiny units was enhanced to Rs.2 lakh, of a small scale units to
Rs.20 lakh and of ancillaries to Rs.25 lakh5.A scheme for building buffer stocks of essential raw
materials for the Small Scale Industries was introduced for operation through the Small
Industries Development Corporations in the States and the National Small Industries Corporation
in the Centre
18 INDUSTRIAL POLICY, 19776. Industrial processes and technologies aimed at optimum
utilization of energy or the exploitation of alternative sources of energy would be given special
assistance, including finance on concessional terms.
19 5. THE INDUSTRIAL POLICY STATEMENT OF JULY, 1980
It was based on the Industrial Policy Resolution of 1956:(i) Optimum utilisation of installed
capacity;(ii) Maximum production and achieving higher productivity;(iii) Higher employment
generation;(iv) Correction of regional imbalances;(v) Strengthening of the agricultural base
through agro based industries and promotion of optimum inter-sectoral relationship;(vi)
Promotion of export-oriented industries;
20 Industrial Policy Statement of 1980
(vii) Promotion of economic federalism through equitable spread of investment and dispersal of
returns;(viii) Consumer protection against high prices and bad quality
21 6. INDUSTRIAL POLICY, JULY 24, 1991
Government is pledged to launching a struggle for social and economic justice, to end poverty
and unemployment and to build a modern, democratic, socialist, prosperous and forward-looking
India2. Such a society can be built if India grows as part of the world economy and not in
isolation
22 INDUSTRIAL POLICY, 19913. While Government will continue to follow the policy of
self-reliance, there would be greater emphasis placed on building up our ability to pay for
imports through our own foreign exchange earnings.4. Government is also committed to
development and utilization of indigenous capabilities in technology and manufacturing as well
as its up gradation to world standards.
23 INDUSTRIAL POLICY, 19915. Government will continue to pursue a sound policy
frameworkencompassing encouragement of entrepreneurship,development of indigenous
technology through investment in research and development,bringing in new
technology,dismantle of the regulatory system,development of the capital markets andincreasing
competitiveness for the benefit of the common man
24 INDUSTRIAL POLICY, 19916. The spread of industrialisation to backward areas of the
country will be actively promoted through appropriate incentives, institutions and infrastructure
investments7. Government will provide enhanced support to the small-scale sector so that it
flourishes in anenvironment of economic efficiency and continuous technological upgradation
25 INDUSTRIAL POLICY, 19918.Foreign investment and technology collaboration will be
welcomed to obtain higher technology, to increase exports and to expand the production
base9.Government will emphasis to abolish the monopoly of any sector or any individual
enterprise in any field of manufacture, except on strategic or military considerations and open all
manufacturing activity to competition
26 INDUSTRIAL POLICY, 199110. The Government will ensure that the public sector plays its
rightful role in the evolving socioeconomic scenario of the country. Government will ensure that
the public sector is run on business lines as envisaged in the Industrial Policy Resolution of 1956
and would continue to innovate and lead in strategic areas of national importance
27 INDUSTRIAL POLICY, 199111.Government will fully protect the interests of labour,
enhance their welfare and equip them in all respects to deal with the inevitability of
technological change12. Labour will be made an equal partner in progress and prosperity.13.
Workers’ participation in management will be promoted
28 INDUSTRIAL POLICY, 199114. Workers cooperatives will be encouraged to participate in
packages designed to turn around sick companies15. The major objectives of the new industrial
policy package will be to build on the gains already made,correct the distortions or weaknesses
that may have crept in,maintain a sustained growth in productivity and gainful employment
andattain international competitiveness
29 INDUSTRIAL POLICY, 199116. Need to preserve the environment and ensure the efficient
use of available resources17. Government’s policy will be continuity with change
30 INDUSTRIAL POLICY, 199118. In pursuit of the above objectives, Governmenthave
decided to take a series of initiatives in respect of the policies relating to the following areas:A.
Industrial LicensingB. Foreign InvestmentC. Foreign Technology AgreementsD. Public Sector
PolicyE. MRTP Act

Industrial policy can be defined as a statement stating the role of government in industrial
development, the position of public and private sectors in industrialization of the country, the
comparative role of large and small industries.
In short, it is a proclamation of objectives to be achieved in the fields of industrial development
and the steps to be taken for achieving these objectives. So, the industrial policy formally
represents the spheres of activity of the public and private sectors.

Objectives

It enlists the rules and procedures that will monitor the growth and pattern of industrial activity.
The industrial policy is neither fixed nor flexible. It is constructed, modified and further
modification is done according to the changing situations, requirements and perspectives of
developments.
The major objectives of industrial policy are discussed below.
Rapid Industrial Development
The industrial policy of the Government of India focuses at increasing the level of industrial
development. It explores ways to construct favorable investment environment for the private
sector and also for mobilizing resources for the investment in public sector. In this way, the
government roots to promote rapid industrial growth in the country.
Balanced industrial Structure
The industrial policy is crafted to correct the prevailing downgraded industrial structure. Say for
example, India had some fairly developed consumer products industries before independence but
the capital goods sector was not at all developed, also basic and heavy industries were by and
large absent.
Thus, industrial policy had to be enclosed in such a way that imbalances in the industrial
structure are corrected by laying stress on heavy industries and development of capital goods
sector. Industrial policy explores methods to maintain balance in industrial structure.
Prevention of Concentration of Economic Power
The industrial policy explores to facilitate a borderline of rules, regulations and reservation of
spheres of activities for the public and private sectors. This is targeted at minimizing the
dominating symptoms and preventing focus of economic power in the hands of a few big
industrial houses.
Balanced Regional Growth
Industrial policy also targets at correcting differences of region in industrial development. It is a
well-known fact that some regions in our country are quite developed industrially, like
Maharashtra and Gujarat, while others are marked as industrially backward regions, like Bihar
and Orissa. It is the job of industrial policy to amend some programs and policies, which will
result in the development of industries or industrial growth.
The first industrial policy statement of the Government of India was formed in 1948 and was
modified in 1956 in industrial development policy dominated by the public sector till 1991 with
some minor modifications and amendments in 1977 and 1980.The year 1991 noticed far reaching
changes that were made in the 1956 industrial policy. The new Industrial Policy of July 1991
witnessed the border outline for industrial development at present.

Industrial Policy Resolution 1956

In April 1956, the Indian Parliament adopted Industrial Policy Resolution of 1956 (IPR 1956). It
is marked as the first comprehensive documented statement on It systematizes three different
groups of clearly defined industries.
The policy of 1956 regulated to design the basic economic policy for a very long time. The Five-
Year Plans of India confirmed this fact. With respect to this Resolution, the establishment of a
socialistic pattern of society was seen through the objective of the social and economic policy in
India. It ensured more powers to the governmental authorities.
Companies were grouped into categories. These categories were −
 Schedule A − Those companies which were considered as an exclusive responsibility of
the state or the society.
 Schedule B − Companies which were marked as progressively state-owned and in which
the state would basically establish new companies, but in which private companies would
be anticipated only to supplement the effort of the state.
 Schedule C − The left companies and their future development would, in general, be
neglected and would be entirely dependent to the initiative and enterprise of the private
sector.
Even though there was a category of companies left to the private sector that is those companies
that are above Schedule C. The sector was monitored by the state by a system of licenses. So to
set up a new company or to widen production, obtaining a license from the government was a
prerequisite to be fulfilled. Launching of new companies in economically backward areas was
incentivized through easy licensing and subsidization of important inputs, like electricity and
water. This step was taken to encounter regional differences that existed in the country. In fact,
the license to boost the production was issued by convincing the government that the

Policy Measures

Some of the essential policy measures were declared and procedural simplifications were
undertaken to opt for the above stated objectives. Following are some of the policy measures −
Liberalization of Industrial Licensing Policy
A list of goods demanding compulsory licensing is reviewed on an ongoing regular basis.
Currently, only six industries are monitored under compulsory licensing mainly on account of
environmental, safety and strategic considerations that need to be taken care of. In the same way,
there are only three industries reserved specifically for the public sector. The lists of goods under
compulsory licensing and industries reserved for the public sector are included in Appendix III
and IV respectively.
Introduction of Industrial Entrepreneurs' Memorandum (IEM)
Companies which don’t require compulsory licensing are expected to file an Industrial
Entrepreneurs' Memorandum (IEM) to the Secretariat for Industrial Assistance (SIA). Industrial
approval is not needed for these types of exempted industries. Amendments are also permitted to
IEM proposals filed after 1.7.1998.
Liberalization of the Locational Policy
A crucially reformed locational policy in tune with the liberalized licensing policy is in place.
Approval from industries are not required from the Government for locations not within the
range of 25 kms of the periphery of cities having a population of more than one million apart for
those industries, where industrial licensing is compulsory. Non-polluting enterprises like
electronics, computer software and printing can be located within 25 kms of the periphery of
cities with more than one million population. Other industries are allowed in such locations only
if they are located in an industrial area so designated prior to 25.7.91. Zoning and follow land use
regulations as well as environmental legislations.
Policy for Small Scale Industries
Reservation of goods that are manufactured exclusively for small scale industries ensures
effective measure for protecting this sector. Since 24th December 1999, entrepreneurial
undertakings with a maximum investment up to rupees one crore are within the small scale and
ancillary sector.
Non-Resident Indians Scheme
The general policy and provisions for Foreign Direct Investment as available to foreign investors
or company are completely applicable for NRIs as well. With addition to this, the government
has broadened some concessions mostly for NRIs and overseas corporate bodies having more
than 60% stake by the NRIs. These include investment by NRI/OCB in the real estate and
housing sectors, domestic airlines sector up to 100%.They are also permitted to invest up to
100% equity on non-repatriation basis in all activities except for a small negative list.
EHTP vs STP Scheme
For constructing strong electronics company along with a view to modify export, two
schemes viz. Electronic Hardware Technology Park (EHTP) and Software Technology Park
(STP) are in function. Under EHTP/STP scheme, the inputs are permitted to be procured free of
duties.
Policy for Foreign Direct Investment (FDI)
Promotion of FDI forms a vital part of India's economic policies. The role of FDI in boosting
economic growth is by way of infusion of capital, technology and modern management
activities. The Department has put in place a liberal and transparent foreign investment egime
where all the practices are opened to foreign investment
International Business:
International management refers to the management of operations in an organisation that serves
different markets and operates in more than one country. International business requires
knowledge that goes beyond regular business expectations.
There will be demand in positions like international marketing, global procurement and
supply chain management, international finance, and international human resource
management. Therefore, Indian and international companies are expecting an increase in the
supply of international business professionals .

1. Diversity in the global market

The international market is ever-changing due to the many factors that affect it
such as operational structures and environmental conditions. With the advent of
technology, the world seems smaller and more accessible; the economy today is
globalised and corporations are getting more foreign acquisitions and transactions
 than any time before. As such, employers are continually looking for skilled
employees who have the expertise to handle such transactions.

2. Increasing number of global or multinational companies

Multinational companies (MNCs) are a growing and very significant part of the
world market, meaning that knowledge in this area will help you stand out to
employers. Global disasters or major happenings in politics, trade or law, have an
impact on all types of businesses that conduct business abroad as well as
domestically. Even when companies are not functioning all over the world,
business leaders cannot afford to overlook what’s happening in the international
market and industries. Nations too cannot lay out their economic policies by
ignoring the foreign sector. In international business management, foreign policy
plays a crucial role in matters of finance, investment, and trade laws.

3. Develop key business skills

An international business management degree helps students to understand a

whole new world of business operations, much more than other specialisations.
This course helps students understand how to work and oversee a diverse team,
perform research within a global context, improve business performance, learn
new skills like digital marketing and social media, and make strategic decisions
that will ensure business goals are achieved. Students with an international
business management degree learn key skills including the following: decision
making, time management, leadership, decision making, communication and
critical thinking.

4. Extensive career options

International business management is a very broad degree and equips students

with a range of skills that are vital and desired by employers in every industry.
Graduates can explore a wide range of jobs in marketing, accounting,
management, HR, consultancy, corporate finance, health management,
advertising, banking, retail, tourism, hospitality, and event management, including
sales.

5. Growing importance of global business education

Global trade is becoming a specialisation of its own. The global business world is
expanding and evolving with each passing day. If you are keen to work across
boundaries, it is vital that you understand and study business within a global
context. An exposure to global business management helps them gain a wider
understanding of different cultures, markets, and businesses. Most importantly, it
allows students to understand how globalisation has made the world more
connected. All these key points make students with an understanding of
international business education more attractive to potential employers.
Are you planning to pursue a career in business leadership and management? If
the answer is yes, the ideal option for you is to explore a course in international
business and management to gain all the necessary skills. Check out the
programme offered by the renowned Berlin School of Business and Innovation
(BSBI), curated specifically to train future business leaders and innovators.