BE LAL there is any single word | and importance of understanding the busier sel ™ ¢ business environment, Firm which sv 5 Sv atic: ; stematically analyse and diagnose the environment are effective that those whi ; nose the environment eerie se which dont explain the statement with Mportance of studying business environment. “The sum total indi ; aeeriries sora indiv iduals, institutions and other forces that are depends upon th ofa usiness enterprise but the business stiii s em as they affect the ov mena a overall performa sustainability of the business.” an \ importance of Business Environment: Business Environment presents threats as well as opportunities for any business. A good business manager not only identifies. and evaluates the environment but als¢ reacts to these extemal forces. Thé importance of the business envifor.nent can be: 1) Enables to Identify Business Opportunities Al! changes are not negative. If understood and evaluated them, they can be the reason for the success of a business. It is very necessary to identify a change and use it as a tool to solve the-selve the problems of the business or populous. urces Environment helps in tapping the ¢ firm to track 2) Helps in Tapping Useful Reso siness r the business. It helps th to goods and services. Careful scanning of the Bu: useful resources required for these resources and convert them in! 3) Coping with ChangesDe Dassmess mist Ne aware of the ongoing changes 19 the business eee romment, whether it be changes in customer requirements, omen trends, new government policies, technological changes. If he Desmess ts aware of these regular changes then it can bring about at se } presse to deal with those changes 4) Ssetaace ia Planning “ > another aspeci of the importance of the business environment asmung purely means what is to be done in the future. When the Susuaess Environment presents a problem o7 an opportunity, it is up we the dusamess to decide what plan wonld it have to come Up with in erder_ te address the future and solve the problem or utilise the opportunity After analysing the changes presented, the business can uncorporate plans we counteract the changes for a secure future. 5) Helps ia improving Perrormance Enterprses that are thoroughly scanning their environment not only dew! woth the changes presented but also flourish with them. Adapung to che external forces help the business to improve the performance and survive in the market. in objectives and instruments of monetary policy Geen ia @ rate stability and price stability are the Ecomumic growth. excha obsecnves of monetary policy and to achieve these objectives there s such as interest rates, supply of money or erect which are \ital to be altered through instruments of sobex w realize these objectives Reserve requirements variation. bank rates and interest rates change, currency supply adjustment. selective credit control and open market operations are certain iastruments of monetary policy to achieve these targetsObjectives of monetary policy: » Economic Growth oneta! i port Tea another important objective i.e. economi availability to be ae growth can be achieved by making credit erwth aici vik state and lowering cost of credit. Economie =a : ultimately stimulates inivestieat Srmlabie ot Tet ines ate which Bae nange Rate Stability ex ; penlinnt eae System is followed by India til 1991 and with is volatility in th > India devalued the rupee rarely. Since 1991 there floating exchans e. exchange. rate of. rupee due to globalization and capitals ane ge rate. Fluctuations in rupee exchange rate are due to denandeng ws and inflows and alterations in foreign exchange to oneur pane which crop up due to imports and exports. So as ' re stal ility in the foreign exchangd rate Reserve Bank have to take suitable monetary measures to prevent large appreciation 2nd depreciation of foreign exchange rate. —— 7 3)Inflation control or price stability Monetary policy has the major objective to control inflation or maintenance of price stability. However price stability does not mean ges in the prices. In a developing country like India nges or inflation is quiet expected. Although e effect of the high degree of inflation on the ng of the people is raised by inflation. Secondly, exports are ‘discouraged because inflation makes them costly and people are forced to import goods because of high prices in domestic markets. Hence there is an adverse effect on balance of n. Thirdly due to high inflation money value less: motivation to save -Uiltimately h leads to lower economic growth assets like real totally no chan; certain price level chai there may be an advers' economy. Firstly the cost of livi payments due to inflatio quickly falls and people have investments are reduced whic Fourthly people are encourage: estate, jewellery and gold etc. d to invest) in otherLastruments of monetary polity + Revent monetary policies have focuse’ terest which is & good changes: than cost of credit be. male “ ae credit availability jg instrament to regulate aggregate demand : fcredit im the econony reduced by various methods. The availab c ernment securities pd can be recived by open market operations: Gov ay market operations. being sold by Reserve Rank of India through open Payment for them, especially by banks 10 buy sec! sash reserves. Capacity to lend money will be reserves are less with banks, Henee loanable will be reduced and hence lead to reduction investment demand. " ieee 5 There are two types of instruments of monetary policy zat e quantitative, general or indirect and second Is qualitative, selective or direct. With the help of availability of credit, cost of money and sypply of money aggregate demand is affected. ed upon credit_availability ility urities is in terms of reduced when cash nds supply by banks in business firm's 1) Bank Rate Policy Bank Rate Bank Rate is the rate at which the central bank Iehds money to the commercial banks and is also called discount rate .The government securities and first class bills of exchange held by commercial banks are rediscounted at the minimum lending rate of central bank, this minimum lending rate is called bank rate. During the periods of inflation the bank rate is increased to increase interest rate on borrowings. Hence commercial banks will borrow less from central bank, because cost of borrowing from central bank is increased due to rise in bank rate, 2) Open Market Operations The purchase and sale of securities by the central bank in the money market is known as open market operations. The securities sold by the central bank, when there is an increase in the pr a we wuld ey is required. The commercial banks are Hot in a positt : a a “ nm to borrowers and business cot munity be Pope reduced. As a result ‘price - investment. . Cause their reserves are is checke — checked due to discouragemore, which ° checked, because Commercial banks Increase in investments, output, BEML, Income and demand rye 3) Reserve Ratios changes i pet law banks are required to keep in the form of reverve fund a erain percentage Of total deposits in its vaults and a certain percentage with the central bank. This is known as reserve ratio. The TSSETVE Fatio is increased by the central bank when prices are rising, It means banks are required to (park tmore funds with the central bank and they lend Jess. As a result investments are reduced and it affects adversely the employment and output. In the same way on lowering the reserve ratio the commercial bank’s reserves are increased and they are in 2 (Position to Tend more and which leads to more positive sconomic activity. 4) selective credit controts : To influence the ppecific type)of credit for particular purposes selective controls are used. Within tbe economy to control speculative activines they may take place in thé form of changing margin requirements. The central bank increases the margin requirements on them when there is rapid speculative activity in the economy or in parvoular sectors oF commodities and prices ere nising. As a result agamnst specified secunties the borrowers are given less money in the ple when the margin requirement 15 increased \ of loans For roof secures to $5% means for the value of Ks 10,000 the pledge - will be given 45% of their value Ve Bs.4,500 as loan. In tere ecessiun the margin requirements are Jowered when borrowings recess encouraged by the central bank.431 Balance of paynwnt peanleg of Balance of Payments; he balance of payments is a book keeping system for recording all evan that have a direct bearing on the movement of funds clween a nation (private sector and government) and foreign countries, Balance of payments records balance of visible trade, pase Of invisible trade or services and capital transfers among different countries. All transactions resulted in inflow of faceign exchange credited in the account while the transactions resulted in Outflow of foreign exchange debited with negative sign in the account. - Definition of Balance of Payments: © "The balance of payments of a country is a systematic record of all economic transactions between the residents of the reporting and the residents of the foreign countries during a given period of time.” elt ce of paymentslis a record of a country's international als interns transactions with the rest of the world” Features of Balance of Payments : 1)Double entry system: Receipts and payments record is maintained on the basis of double entry system. 2)Systematic Record: Balance of payments records systematically all economic transactions related to goods, Services and capital transfers 3)Comprehensive: : Balance of Payments consists of three main parts: Current Account, Capital Account and Official reserves settlement balance.4)Specified period of time: Balance of Payments records transactions that occur within given year. 5)All Transactions: Balance of Payments records transactions of Government agencies as well as business sector with rest of the world, - Importance of Balance of Payments . Balance of Payments truly gauges the international solvency position of reporting country. — ¢ In the context of developing nations, balance of payments shows the extent of country dependence on the financial assistance provided by developed nations. : * The economic dealings fall under Balance of Payments would create demand and supply of different currencies. * Balance of Payments helpful in determining thelexchange ra of country’s currency with other currencies. The surplus iit « Balance of Payments results into addition to foreign reserves which would create the demand for Indian currency that ultimately leads to the appreciation of INR. e Favorable and adverse trends in Balance of Payments position affects the formulation of monetary policy, fiscal policy, foreign trade policy etc. of the country. : 2 [4A business firm is an open system. explain this statement with reference to the relationship between an organization _and_ its environment both internal and external . A business firm is an open system: It gets resources| from the environment and supplies its goods and services to the environment. There are different levels of environmental forces. Some are close and internal forces whereas others are external forcesegional ley, Extemal forces may be related to nationdl ovide oe in international level. These environmental forces oe ite or threats to the business community. ; available opportunitic, , . re asp\ the Every business organization tries to|grasP) environment. and face the threats thatlemerge from the busin : A) INTERNAL ENVIRONMENT 1) Value System e Tata Sons e After the EID Parry group was taken over by the Murugappa group, one of += the ~—- most profitable businesses (liquor) of the ailing Parry group was sold off as the liquor business did not fit into the value system of the Murugappa group. 2)Vision, Mission and objectives e Infosys e Ranbaxy’s thrust in to the foreign markets and development has been driven by its mission "to become a research based international pharmaceutical company. 3)Managemeni structure and nature e Wipro vs Tata group The share-holding pattem could have imi jal : portant _ manage" implications. There are very large companies) ge companies) where are the share is held by the promoters (like Wipro) and there are large firms where the promoters' position is very vulnerable (1; ‘ up 7 - 1 ta gro of companies) unerable (like the Tata 8! 4)Internal power relationshiprelationship between the members of Board of Directors and between the chief executive and the Board 5)Human resources ¢ Infosys ¢ Rover Group, observes that a Japanese company of 30,000 employees is 30,000 process improvers. In a Western company, it is 2,000 process improvers and 28,000 workers. 6) Company image and brand equity © image of the company matters while raising finance, forming joint ventures or other _ alliances, soliciting marketing intermediaries, entering purchase or sale contracts, launching new products etc. 7) Miscellaneous Factors 1 © Physical assets oe (R& Technological capabilities e Marketing resources « Financial factors L ENVIRONMENT B)EXTERNA — 1)Micro Environment ists of the e It c onsi environment that affect t ¢ Suppliers « Customers © Competitors © Matketing intermediaries factors in the company’s immediate he performance of the companye Financers - © Public 2)Macro Environment and forces that may no © It comprises general trends immediately affect the organization but sooner or later wil alter the way organization operates. e Technological environment e Economic environment e Political environment e Natural environment Global or international environment © Social and cultural environment [S5_ Explain the balance of!payment. What does the term deficit or p. payment mean? Suggest measure_to surplus _of balance of. overcome deficit in balance of payment. in a country can arise if said country A baiance of payment deficit |imports/more capital, goods am a few crucial points to rememb d services than it exports. Following are er about the/BoP| deficit in a country — e A BoP defi which deno! Bank. cit can be corrected through an official reserve sale i hange by the Reserve tes the sale of foreign exe of a country are the financiers when e The monetary authorities any deficit arises in the country’s balance of payment is a sup’ Conversely, they are also the recipients when there in the country’s BoP. S overall decrease in a country’s official it in balance of payments. - ——o —. ces J reserves! signi® e An defic@ Official reserve transactions can be regime of fixed exchange rates when exchange rites are floating, vcounted for only under the They cannot be considered Causes of BoP Deficit: HRapid Feonomic Development High outflow of foreign exchange to meet import demands like technology, machines, and equipment can lead to BoP deficit. 2) Inflation Sustained rise na country’s prices can often make foreign products cheaper, leading to a high volume of imports. 3) Political Disturbance Unstable tax structures, change in government, ete. can icad iv a toss in foreign investment, and give way for BoP deficit. Apart from these, factors lika population explosion, change in the preference and tastes of the gencral population, etc. can also contribute to the balance of payment of a country [6] Tariff and non tariff barrier Cfradp) Tariff Barriers: Tariff barriers have been one of the|classical_ methods of regulating international trade. as taxes on the imports. from other countries to g the goods costlier in Tariffs may be referred to It aims at restricting the inward flow of goods protect the country's own industries by makin that country.comes so. steep that it is no? sometimes the duty on 4 product be worthwhile importing it sa substantial source or In addition, the duty so imposed also provide revenue to the importing CounTY © Directly atfeet the prices of goods traded Also called Duty or tax levied on goods tr © Most commen type of trade cot © Specitic duty; Ad ~ Valorem auty; vaded internationally, ntrol Compound duty. Types 1)Import tariffs : Collected by importing country 2) Export Tariffs: Collected by exporting county {through which the goods 3) Transit Tariffs: Collected by the country, have | passed. . Non - Tariff Barriers To protect the domestic industries against unfair competition and to give them a fair chance of survival various countries are adopting non-tariff measures. May directly affect either price or quantity of goods traded internationally. / Subsidies e Tied Aids e Minimum Sale Price © Quotas e Embargoes e Buy - Local Legislation ¢ Specific Permissions RequiredTypes more competitive. 1) Subsidies: Direct assistance to companies, making them 2) Tied Aids: Loans to other countries, a part of which is spend in donor country. E.g. Infrastructure, telecommunication. 3)Minimum sale price: Goods sold at a price set by authorities after clearances, 4)Quotas: Limiting the quantity of goods imported or exported at a given time frame. a — — 5)Embargoes: Prohibits [all forms) of trade from a country or category of goods. 6)Buy — Lokal: Favouring domestic producers or goods of local origin. . 7)Specific Permissidns: import or export license. 2 Tani? Non- Tan? 7 — it univ Since import duty monopauste OF Merenes 4. authonties dovatuation ed Chasesthe 1 No sevene recep protection of doi industry No suet problem wans command aulput Mon hugh Hiowibie and discussed at ormcials levols only Unparter Smee pratt ane eosphut et b More atical involved and lass simple Anew comers17) Capitalism yy soclalism Capitalism — Socialism roduction Ownership of Means of production Mend or vernment a Ass rivate y ‘+ . ets owned by priva cooperatives individuals istril ; » equally distributed Income—~yxIncome determined by Income equ ey according to need Equality ree market forces ¢ he Consumer Prices determined by Prices set by the Prices supply and demand government Efficiency and Free market . Government-owned: Innovation —_ competition businesses have less , incentive for efficiency and encourages efficiency and innovation Healthcare __ Healthcare provided by private sector innovation . Healthcare provided free or subsidized by the . government Taxation Limited taxes based on High taxes necessary to pay individual income for public services « 1) Owfership and Income Equality . Capitalists argue that private ownership of property (land, busines: goods, and wealth) is essential to ensuring the natural ri ht f spe to control their own affairs. Capitalists believe that boca 2 peop o sector enterprise uses resources more efficiently th: peas society is better off when the free market decides wh a ee does not. In addition, private ownership of pro vet 10 Profits and who for people to borrow and invest money, thus fies Sree aes ing the economy. Socialists, on the other hand, believe . that . by everyone. They argue that capitalism's array should be owned relatively few wealthy people to acquire most resulting income inequality leaves those Of the property. The : ri : less w the rich. Soe belicve that since income 1 off at the mercy of entire sone © government should reduce it caeetuality hurts the en a @ poor such as free education ; rough programs tha! taxes on the wealthy. and healthcare and highela) el 2) Consumer Prices — eae: poe Prices are determined by free market pesome monopolies To exploit ec enable! busineseejdhat have : ices . owe: i higher prices than warranted by their Tones poral excessively In socialist economies, consumer prices at A | vale re government. Capitalists say this i lead to pepe sot essential products. Venezuela is often cited as an example. ‘Accordio, to Human Rights Watch, “most Venezuelans oe to tea hungry.” Hyperinflation and deteriorating health conditions under the socialist economic policies of President Nicolas Maduro have driven an estimated 3 million people to leave the country as food became a political weapon, 3) Efficiency and Innovation the profit incentive of capitalism’s private ownership encourages businesses to be more efficient and innovatite, enabling them to manufacture better products at lower costs. While businesses often fail under capitalism, these failures give rise to new, more efficient businesses through a process known as “creative'destruction.” Socialists say that state ownership prevents business failures, prevents monopolies, and allows the government to control production to best meet the needs of the (people.| However, say capitalists, state ownership breeds inefficiency and indifference as labor and | profit incentive. management have no persona 4) Healthcare and Taxation Socialists argue moral responsibility to provide essential social services. They believe that universally needed services like healtheare, a8 4 natural right, should be provided free to n 4 clinics in everyone by the government. To this end, hospitals and u en owned and controlled by the government that governments have at list countries are oftIrsts contend that state, rather than private control, leads to caetticrency and lengthy delays in providing healthcare services. In ankhboa, the costs of providing healthcare and other social services forve socialist governments to impose high progressive taxes while nereasing government spending, both of which have a chilling effect oa the economy. {S|_Exptain_pyramid of social responsibility in relation to CSR alvo discuss the benefits of CSR practices for firm. OR Discuss four stage model of social responsibility. OR Carol's pyramid of responsibilities An organization’s soviai pet iuuuance is an aggregate of its economic, legal. eghical and discretionary responsibilities. Archie Carroll who times corporate social responsibility as the entire range of odligations to the society has proposed a multi-dimensional corcepaal model of corporate performance. According to him, a firm has the following four categories of obligations of corporate pertormance. These have been individually discussed below: 1) Economie responsibilities: Each business unit is an economic gnnty, therefore the primary responsibility it has is to be a success‘ul econvatic_ unit for the society It is therefore, the responsibility of a business to produce economically viable) goods and services and mmumize profits tor the owners and the shareholders. However, if this is carned to the extreme it is called the ‘profit maximization wrew’, as advocated by Nobel economist Milton Friedman. This view argued that 2 company should be operated on a profit-oriented basis. with its sole mission [ increase Ils profits so long as is stays within dhe rule of the game 2 Legal responsibilities: Fultilling the legal fesponsibilities is what is considered as umportant with respect to proper corporate. behavior fee ee ee eereeeeeee SeenThis means to ensure compliance and adherence to the laid d rules, laws and regulations that a business unit is deemed to f low. such legal requirements are 'mposed by local councils; fe pe central governments and even international laws, intaoe fs multinational company, an 3) Ethical responsib ties: Such responsibilities include behavior that is not necessarily Codified into law and may not serve the organization’s direct €conomic interests, To be ethical, organization’s decision makers Should act with cquity, faimess and impartiality, respect the rights of individuals, and provide different treatments of individual only when differences between them are relevant to the organization’s goals and tasks. Unethical behavior occurs when decisions enable an individual or organization to gain expense of society. 4) Discretionary responsibilities: Discretionary responsibility is purely voluntary and guided by an organization’s desire to make sociai_ contributions not_mandated by economics, iaws or ethics. Discretionary activities include generous philanthropic contributions that offer ino payback to the organization and are not expected. Discretionary responsibility is the highest criterion of social responsibility, because it goes beyond societal expectations to contribute to the community’s welfare.market_is_one of the Most 9]_ Mode _of entering~ a_forei x business disenss, important strategic decision in international isky and require a lot of Although investing in another market can be risky capital, the rewards can be huge. fs , you By selling your product or service in another vou sales and introduce your company to huge markets, area i ting j profits, gain brand recognition, reduce the risk of only ae ‘i one market (eg, due to economic or seasonal downtums) tn your product’s life cycle. Scale of entry: The obvious issue here is cost. Entering a market on a large scale will Tequire significant resources. Although this is more likely to make an impression on a new market_as it will attract the attention of customers and local businesses alike, it may be risky financially if your company does not take off. 1) Exporting Exporting is the direct sale of goods and + or services in another country. It is possibly the best-known method of entering a foreign market, as well as the lowest risk. It may also be cost-effective as you will not need to invest in production facilities in your chosen country — all goods are still produced in your home country then sent to foreign countries for sale. However, rising transportation costs are likely .o increase the cost of exporting in the near future. 2) Licensing Licensing allows another company in property. The property in question example, trademarks, production tech: will pay a fee in order to be allowed th your target country to use your 'S normally intangible - for niques or patents. The licensee le right to use the Property. Licensing requires very little investment an on investment. The licensee will also take and marketing costs in the foreign market. id can provide a high rem Care of any manufacturing3) Franchising venture. There are several benefits to this type of venture. It allows you the benefit of local knowledge of a foreign market and allows you to share costs. However, there are some issues — there can be problems with deciding who invesis what and how to split profits. . 5) Foreign direct investment Foreign direct investment (FDI) is when you directly invest in facilities in a foreign ‘market. It requires a lot of capital to cover costs such as premises. technology and staff. FDI can be done either by establishing a new venture or acquiring an existing company. ubsidia ee subsidiary (WOS) is somewhat similar to foreign direct investment in that money goes into a foreign company but instead of money being invested into another company, with a WOS the foreign business is bought outright. It is then up to the owners whether it continues to run as before or they take more control of the Wos. fetag volves two non-compeling companies working ybac! ‘ogeth the : cls OF serv: their home gether to cross-sel other’s products or services in 0 ; ‘a hi eh : is a low-risk method involving little capital, Country. Althouy Some companies may not be comfortable with this methog involves a high degree of trust as well as allowing the par, te J over how your prody, company to take a large degice of control uct, marketed abroad, 10]_ Explain the LPG liberalization, privatization ang lobalization) reform and its impact on Indian economy, Liberalization Liberalization removes state control over economic | ACtivitics It Provides better autonomy to the b in decision-makin, without government interference. It was assumed that the Market forces of demand and supply would operate automatically to derive . better efficiency and economic health will recover. Internally, this was enacted by bringing reforms in the real and financial sectors ang extemally by releasing foreign exc! and trade from. state governnents grip. Privatization It means withdrawing the ownership or management of a government enterprise. Government companies are converted into private companies in two ways (i) Government is shredded from the ownership or Management of the public-sector companies. (ii) by the blatant sale of public sector companies Privatization is the transfer of the control and owner from the public sector to the private sector. It mea; role of the government as the property rights private. Globalization . Globalization can be defined as the Jinte tion} of the nation! economy with the world cconomy. Tr enables a. tree flow 4 information, technology, goods and services, capital e 1 investments ® even people across different countries, [t brings the trade, investne?” ship of businesses ns a decline in the haft froyppublic !and market s from various countri more tucidleconomy. Glebe i Positive Impact of LPG in Our 1) Increase.in GDP Growth- The Indian economy has : reforms. Te, oval are ey become vibrant after the LPG indicated by GDP] growth. Post a — 5 LPG policies, shot up to as high as|8 per cent per ae CHE 2) Stimulant to Industrial Production- LPG policies have | worked as a great stimulant to industrial production in the Indian economy. IT industries in India have reached the global level because of theselLPG | keforms, 3) Curb on Fiscal Deficit | The ever-increasing fiscal deficit has been a serious danger to the protess of investment in the Indian economy. It was 8.5 per cent of GOP prior to 1991. Thanks to the LPG policies, government revenue has, increased. As a result, Fiscal deficit deduced to| 4%, of the GOP( gross operating profit). 4) Check on Inflation ade a flow, of demand and supply smooth and it in er the inflation. There was a fall in inflation rates as i i Iting in either i roduction of goods and services resu! ape roars price.. The competition also helped to keep inflation in check. 5) The Decline in Poverty = ee oth running of businesses: without an Fie feform Ned to the Sore employment and hence the decline in Poverty.Negative Impact of LPG Reforms: + ‘The reforms were mainly for the formal sector of the econen,, the agricultural sector, the urban informal sector and foray depending communities were untouched by the reform. Thi. resulted in Uneven economic growth and unequal distribution os wealth. + Economic liberalization in industries (subjected to strict labour employment, + Market-based reforms led to # rich class and the poor class. + Social Sectors like Health, educatio which has Iced to poor health se educational grqwth. Economic reforms have pushed up the growth of the economy but have miserably failed to gencrate adequate employment. the organ ze!) raanufactisrin, laws) has led to very litre he economic disparity between the on were ignored in this reform ctor developrient and lous, [U1] Impact of technology on business poensd?d (ror CST for Traditional Capital: With the advancement of would be more requirement of traditional capital J equipments can be purchased for the growth and 1) Demand technology the! More modern development of the business. 2) Increase in Quality of Products: There is an improvement in the quality of the goods and services because of the improvement in tne technology. The quality products have increased the standard of living of the people. The customers are ready to spend more on the go" quality of the products. 3) Rise in Productivity: The productivity of the goods cam te increased, With the help of improved technology more moderni2 equipments are purchased for manufacturing the quality produc? Moreover, new advanced methods of production and new techn’ odalso used in the ' ed to produce the persis business, Capital intensive technology is rechtolOgy. “mized products instead of labour intensive 4) More Emphasis on R&D: concentrating on in-house research and development and indigenous oe Fi When pment in specific areas where India is already ® ae In these @ quantum jump over developed countries is ; (a ae areas it should be possible for India to export technology. Reinventing the wheels in other areas is wasteful of both talent and expenditure, €specially where India can easily borrow technology. In all such cases import i hy rani jeanne port of technological know-how The entrepreneurs are more 5) Obsolescence: Some of the products have become obsolete with the advancement of technology e.g,, transistors, scooters, picture tube Televisions etc. Mobile phones have replaced thq old land lines phones. watches, alarm clocks, calculators etc. 6) Demand for Skilled Labour: In today’s world more skilled labour is required to operate the technical gadgets. It has increased the demand for skilled labour. It has created the employment opportunities’ in India. There is “a golden chance for the young generation to become highly skilled through technology. 7) Organization Structure becomes Techno Structure: Most of the organizational structures have become techno structures with wifi campus, computerized system instead of manual systems, electronic gadgets, CCTV camera system to maintain a check on the labour and subordinates. : to borrow state 8 ity Management: It is all the more necessary - ean The talk of appropriate technology is valid only if we are confining ourselves to indigenous markets and work in isolation from the rest of the world. astes, habits and preferences of the people f time. We have seen rapid changes in the des. The people have become more techno 10) Social Change: The t change with the passage ©! Society in the last few decabased. Everyone has mobile phones, laptops and the internet facility, The eating habits have also changed. 12} Social responsiveness of a business What Is Social Responsibility? Social responsibility means that businesses, in addition to maximizing sharcholder value, must act in a manner that benefits society. Social Fesponsibility has become increasingly important to investors and consumers who seek investments that are not just)profitable but also contribute to the welfare of society and the environment. However, Critics argue that the basic nature of business does not consider Society as a stakeholder. Understanding Social Responsibility Social responsibility means that individuals and companies have a duty to act in the best intciesis of their cnvironment and society as a whoJe. Social responsibility, as it applies to business, is known as Corporate social responsibility (CSR), and is becoming a more Prominent area of focus within businesses due to shifting social norms. Social Responsibility in Practice The International Organization for Standardization (ISO) emphasizes that a business's ability to maintain a balance between pursuing economic performance and adhering to societal and environmentai issues is a critical factor in operating efficiently and effectively. Social responsibility takes on different meanings within industries and companies. For example, Starbucks Corp. and Ben & Jerry's Homemade Holdings Inc. have blended social responsibility into the core of their operations. Both companies purchase Fair Trade Certified _ingredients to manufacture their products and actively support sustainable farming in the regions where they source ingredients, Big-box retailer Target Corp., also well known for its social responsibility programs, hasy donated money to com / education grants. munities in which the stores 0 , inchading _Criticism of Social Responsibility Not everyone beli conscience. Foon wat businesses should have 2 social sponsibiliti ‘ ilton Friedman stated that ro ack of rigo or pusiness are notable for me eehica | cones sense of social res medman believed that only individuals can have 2 Some experts believe thet Businesses, by their very nanure, canoe’ ie lat Soci 2 being 1n business: profit ee defies ne very pot of nen i ical_change is one of the principle driver of . Discuss this statement in reference to technolo and competitive advantage of the firm. . technological change is \one of the principal drivers of competition. It plays a major role in industry structural change, as well as in creating new industries.” it’s a great equalizer.” “many of today’s firms grew out of the technological changes that they were able to exploit” » “all the things that can change the rules of competition, technological change is among the prominent” cost or enhances change itself lowers hnological lead is sustainable . technological ge its differentiation and the firms' tec ange shifts costs OF © technology ¢ uniqueness drivers ‘n favor of a firm . pioneering the technological change translates into first mover advantagesos * technological change improves overall industry structure 14] Elements of new industrial policy INDUSTRIAL POLICY 1991: Congress Government then, Narsimhan Rao announced n this Policy has changed the ec: the Prime Minister of India p. jew industrial policy in July, 199) 2. ‘onomy to large extent. OBJECTIVES OF NEW INDUSTRIAL POLICY: 1. Unshackle the Indian economy from cobweb of bureaucr-- control ww - Liberalising the policy regarding FDL - To abolish restriction on FDI. - Redefining the role of public sector. - Bringing of welfare scheme of Indian industnes, i . Remove restriction imposed by FERA on international trade - To ensure quality standards. 8. Emphasis on research and development capabil 9. Abolishing of MRTP act. 10. Improve the productivity of Indian industry, 11. To prepare Indian industry for globally competitive. 12. Integration of Indian industry with the world. > ION ities. MAJOR INITIATIVES OF NEW INDUSTRIAL POLICY: 1) Abolishing Industrial Licensing:~ For liberalize the economy , need was felt to abolishing of industrial licence except 18 industries that require Compulsory | icensing 1. Coal and Lignite 2. Petroleum 3. Sugar 4. Animals fats and oil 5. Motor cars 6. Paper& Newsprint7, Defence equipment 2) Role of public Sector: Inspite of huge inves: need was felt to mee ent Public sector was not performing good so, industries reseryeq 7" ii Tole of public sector. The number of further to 6. These six le lic sector reduced from 17 to 8 and then a) Defence products Stries are as follows:- b) Mineral oi] c) Atomic Energy d) Railway transport e) Coal and lignite f)Mineral ” 3) Foreign Investment: Earlier it was necessary for of government-which led to frustration-foreign investors goods in the world market new industrial industries. every industry to take the prior approval unnecessary delay and sometime due to do not invest to promote export of indian d unconditional approval was given under Policy 1981 for FDI upto 51 % in high priority 4)MRTP Act: New industrial policy 1991 removed the threshold limit of assets in respect of MRTP companies this eliminates the company for prior approval of central government for expansion, establishment of new industries undertaking ,merger etc. 5) Reservation for Small Scale Industries : In the year 2006, small scale units were defined as a unit having investment of 5 cr. In Plant and machinery .In oct 2008, 21 items were reserved for manufacturing in small scale industries. 6)Encouragement to Industries in Backward Areas: Government has taken various measures to encourage the industries in backward areas. Various incentives will be offered by govt to industries in the backward region for reducing regional disparities.istrative Control: - Adm gunched by government are exempted from ents tready existing units will be free to d already issued. trols and a n " the basis of the license 7)Freedom fron Expansion prog! administrative contro! produce any commodity on 15] Corporate Governance combination of rules, processes OF laws Corporate governance 18 the ted or controlled. by which businesses are operated, regu bination of rules, processes Or laws by which businesses are operated, regulated or controlled. The term encompasses the internal and external factors that affect the interests of a company’s stakeholders, including shareholders, customers, suppliers, government regulators management. The board of directors is responsible for treating the framework tor corporate governance that best aligns business conduct with objectives. . Corporate governance is the com! An example of good corporate governance is a well-defined and enforced structure that works for the benefit of everyone concerned by ensuring that the enterprise adheres to accepted ethical standards best practices formal laws. Alternatively, bad corporate governance is seen as poorly-structured, ambiguous and noncompliant, which could damage the image or financial health of a business. Principles of corporate governance: While corporate governance structure may vary, most organizations incorporate the following key elements: ¢ All shareholders should be treated equally and fairly. Part of this is making sure shareholders are aware of their rights and how 0 exercise them. : ¢ Legal, contractual and social obligations t ; : S tO non-shareholder stakeholders must be upheld. This includes eaeCOMO eATINg pertinent information to employees, investors, vendors member of the voumunity. ye boa J intal i Pees ui directors Must maintain a commitment to ensure ‘ pene a : it y. (iirnoss, diversity transparency within corporate a fi pea Joard members must also possess the adequate wl ) Necessary fo FeViEW Management proetices. . eee should define a code of conduct for board wn 1s yee i 7 members and executives, anly appointing new individuals if they meet that standard e All corporate povernance policies and procedures should) be (anaparent or disclosed to relevant stakeholders. Regulation of corporate governance: Corporale, Bovernanee has received incrensed attention: bi high-profile scandals involving abuse of corporate power or alleged criminal activity. by corporate offiegrs. ‘Therefore, laws and regulations have been passed to address the components of corporate cause of yovernanee Jol A firm Chit unable to cope. with technological change may not ur : \ res_und importance 0! D u 1) technology hanes fast The tf fenture of technology with the pa is its change and then ge of time, Technology more change sire: change 08 people whether they are ready for lot not. In the present eray it has brought so es whit cans that change comes so hat it creat hook, which m he limits ol xd people los much change ! is called futures Hast that it reaches l human tolerance it successfully. > their ability i@ cope with 2) ‘The time up between idea and implementation is 2 he ¢ falling rapidly.3) New developments must be adopted & new ideas explored 4) The effects of technology are widesprea¢. other important feature of technology 15 ; . widespread, reaching far beyond the immediate point of technological impact. Basically, : | technology runs through the society until every community is affected by it. People cannot escape it. 5) Technology is reinforcing in its own. Technology makes technology possible. | Technology acts as a multiplier to encourage its own faster development. This acts with \ other parts of the society so that an invention in one place leads to a sequence of inventions in other places. * 6) Technological environment is a complex set of knowledge, ideas, and methods. . 7) Technological environment is dynamic. 17] The way business are organised and influenced by the soc overned today are ial structure of the fr Soc ise re statement in context to the relationshi Stety. Discuss this society. between the business amd OR The modern concept of business view. ; . Sa - social system. Discuss the statement in relngeesestem of the total between the society and business on to the relationshl Business today is arguably the f Most The term “business” refers her, dominant institution in the world © to an : : ¥ organization that is involved "the trade of goods, services, or both to consumers for a profit. The ost common forms of business ownership are: _ ° Sol je a a the business is owned by one person . = where the business is owned by two or more Society, in its broadest sense, refers to human beings and to the social structures they collectively create. In a more specific sense. the term is used to refer to segments of humankind, such as members of @ particular community, nation, or interest group. As a set of organization screated by humans, business is clearly a part of society. Business, therefore ,is inextricable linked to society. Society, on the other hand, is a network of individuals, groups and organizations. 1) The dynamic environment df business On One core argument is that the extemal environment of business 15 dynamicand ever changing. Businesses and their stakeholders do not interact in avacuum. On the contrary, most companies operate in a swirl of social, ethical, global, political, ecological, and technological change that produces both opportunities and threats. 2)Changing societal expectations ociety’s expectations of business are pect business to be more should pay close attention to social issues and act asgood citizens in society. New public issues constantly arise that requireaction. Increasingly, business is faced with the daunting task of balancing itssocial, legal, and economic obligations, seeking to meet its commitments tomultiple stakeholders. Everywhere around the world, s changing. People increasingly ex] responsible. believing companies 3)Growing emphasis on ethicsud wanls Conporale other words, and morally ‘The public also expects business to be ethical ap managerato apply ethical principles or value 1D 6 guidelines about what is ight and wrong, fair and unfais, correct 4)Globalization People live in an increasingly integrated works economy, characterized bythe unceasing movement of youds, service>, and capital across nationalboundaries. Large transnational corporaions do business in hundreds of countries. Products and services people buy every day in the United States or Germanymay have come from China, India, Indonesia, Haiti, or Mexico Today,cconomic forces truly play out on a global stage. 5) environment, and new technology establish the context in which businessesinteract with their many market and nonmarket stakeholders. ‘This meansthat the relationship between business and society is continuously changingin new and often unpredictable ways. Environments, people, andorganizations change; inevitably, new issues will arise and challengemanagers to develop new solutions. To be effective, corporations must mectthe stions of stakeholders and socicty in general reasonable exp