Module 3

The Technological Environment

<#> © Dorling Kindersley (India) Pvt. Ltd. 2011

 Technology: A Definition

Technology is the branch of knowledge that

deals with the creation and use of technical
means and their interaction with life, society
and the environment, drawing upon such
subjects as industrial arts, engineering,
applied science and pure science.
 Technology and Development

Technology is one of the prime motive forces

of development.
It consists of a system of knowledge, skills,
experience and organization that is required
to produce, utilize and control goods and
services.
The Contribution of Technology
• Technology is one of the important determinants of
success of a firm as well as the economic and social
development of a nation.
• Technology is one of the most critical inputs for
economic growth.
• Countries that possess superior technology enable their
people to earn enhanced incomes through high
productivity and enjoy high standard of living.
• On the contrary, people of poor countries with low
technology produce less and earn low incomes and have
low standard of living.
 Appropriate Technology

• To be effective and to bring about greater

efficiency and higher productivity,
technology has to be so fine tuned so to
address issues of the locality where it is
applied. It has to use, as far as possible, local
resources.
• The technology locally developed reflects
local conditions, objectives and needs. The
technology so developed is called Appropriate
Technology.
 The Role of Technology

• Shapes people’s lives

• Fosters innovation
• Affects competitive advantage and buying power
• Acts as a force multiplier
• Displaces labour
Uses of Technology in Business
The four areas of business where technology can be used are:
• Communications and information management;
• Operations as in any production or manufacturing activity
• Product design
• Research and development (R&D).
Of these four areas, Information Technology (IT) is the one
that has developed business most and has brought in
innumerable benefits to organizations in terms of savings
in cost, time and resources.
 Benefits of Technology to
Business
• Cost reduction
• Improved product quality
• Increased productivity
• Shorter turnaround period
• Informed decision making
• Innovations
 What is ISO

• We are ISO, the International Organization for

Standardization
• 161 countries members*
• 22254 International Standards*
• 100 New Standards each month*
• 783 Technical Committees & subcommittees*
• ISO is derived from the Greek ISOS, meaning
EQUAL. Whatever the country, whatever the
language, we are always ISO.
• ISO is an independent, non-governmental
international organization with membership of 161
national standards bodies.
• Through its members, it brings together experts to
share knowledge and develop voluntary,
consensus-based, market relevant International
Standards that support innovation and provide
solutions to global challenges.
 What is an International
Standards?
• An International Standard is a document containing practical information and best
practice.
• It often describes an agreed way of doing something or a solution to a global problem.
• International Standards make things work. They give world class specifications for
products, services and systems, to ensure quality, safety and efficiency. They are
instrumentals in facilitating international trade.
• ISO has published 22254 International Standards and related documents, covering
almost every industry, from technology, to food safety, to agriculture and healthcare.
• ISO International Standards impact everyone, everywhere.
 In short ISO standards help:

• Make products Compatible, so they fir and work well

with each other.
• Identify Safety Issues of products and services.
• Share Good Ideas and Solutions, technological know-
how and best management practices.
 Benefits from International
Standards
1. Industry :
• Become more competitive by offering products and services that are
accepted globally.
• Enter new markets easily.
• Benefit from the knowledge and best practice of leading experts
around the world.
• Reduce cost by reinventing and using the available resources better.
• Raise profits by offering products with high quality, compatility and
safety.
2. Regulations
• Harmonize regulations across countries to boost global
trade.
• Increase credibility and trust throughout the supply chain.
• Make it easier for countries to outsource and specialize.

3. Society
• Wider choice of safe and reliable products and services at
competitive prices.
• Best practice at organizational level to practically address
global challenges like climate change and sustainability.
 How does ISO works?

• ISO only develops a standard if there is a market need for

it :
1. International standards are created by the people who will
use and be impacted by them. They are called EXPERTS
and they come from industry, government, consumer
organizations, academia, non-governmental organizations ,
and more.
2. It is the MEMBERS role to identify the experts and ensure
an active voice for their country.
3. The ISO Central Secretariat – ISO/CS – coordinates the
development process and publishes the standards.
 About TNV

• TNV is a largest international certification body based in India.

• TNV provides IAS accredited certificate in association with a Korea based
accredited certification body.
• TNV provides ISO-9001, ISO-14001, ISO-13485,TS-16949, ISO-28000,
lead auditor training course.
• TNV provides certification services for QMS, EMS, OHSAS, FSMS, ISMS,
EnMS, ITSMS, BCMS, CE and Star rating.
 About ISO Standards…
• Iso standards ensure that products & services are safe and
good quality.

• Iso has a many popular standards like...

• ISO-9001 = Quality Management
• ISO-22000 = Food Safety Management
• ISO-14000 = Environment Management
• ISO-17025 = Testing and Calibration Laboratories
• ISO-3166 = Country codes
• ISO-26000 = Social Responsibility
• ISO-50001 = Energy Management
• ISO-31000 = Risk Management
• ISO-4217 = Currency Codes
• ISO-8601 = Date and Time Format
• ISO-45001 = Occupational health & Safety
 Structure and governance

• ISO is an independent, non-governmental

organization made up of members from the
national standards bodies of 161 countries. Our
members play a vital role in how we operate,
meeting once a year for a General Assembly that
decides our strategic objectives.
• Our Central Secretariat in Geneva, Switzerland,
coordinates the system and runs day-to-day
operations, overseen by the Secretary General.
 The General Assembly

• The General Assembly is the overarching organ

and ultimate authority of the Organization. It is an
annual meeting attended by the members and the 
Principal Officers.
 The ISO council
• The ISO Council is the core governance body of the Organization
and reports to the General Assembly. It meets three times a year
and is made up of 20 member bodies, the ISO Officers and the
Chairs of the Policy Development Committees CASCO,
COPOLCO and DEVCO. The Council has direct responsibility
over a number of bodies reporting to Council:
1. CASCO - provides guidance on conformity assessment
2. COPOLCO - provides guidance on consumer issues
3. DEVCO - provides guidance on matters related to developing
countries
• The President’s Committee advises Council on matters
decided by Council.
• Council Standing Committees address matters related to
finance (CSC/FIN), strategy and policy (CSC/SP),
nominations for governance positions (CSC/NOM), and
oversight of the Organization’s governance practices
(CSC/OVE).
• Advisory Groups provide advice on matters related to ISO’s
commercial policy (CPAG) and Information Technology
(ITSAG).
 Technical Management Board
 (TMB)
• The management of the technical work is taken
care of by the Technical Management Board, which
reports to Council. This body is also responsible for
the technical committees that lead standard
development and any strategic advisory boards
created on technical matters.
 BIS…

BIS is the National Standard Body of India established under the BIS Act
1986 for the harmonious development of the activities of standardization,
marking and quality certification of goods and for matters connected
therewith or incidental thereto. 

BIS has been providing traceability and tangibility benefits to the national
economy in a number of ways - providing safe reliable quality goods;
minimizing health hazards to consumers; promoting exports and imports
substitute; control over proliferation of varieties etc. through standardization,
certification and testing. 
Keeping in view, the interest of consumers as well as the industry, BIS is
involved in various activities as given below: 
 BIS Activities
• Standards Formulation
• Product Certification Scheme
• Compulsory Registration Scheme
• Foreign Manufacturers Certification Scheme
• Hall Marking Scheme
• Laboratory Services
• Laboratory Recognition Scheme
• Sale of Indian Standards
• Consumer Affairs Activities
• Promotional Activities
• Training Services, National & International level
• Information Services
Intellectual Property Rights
 Intellectual Property
The term intellectual property (IP) signifies creations of the mind
such as inventions, literary and artistic works, and symbols, names,
images, and designs used in commerce.

IP can be split into two types: (i) Industrial property that takes into
account inventions (patents), trademarks, industrial designs and
geographic indications of source; and (ii) Copyright that covers literary
and artistic works such as novels, poems and plays, films, musical
works, artistic works like drawings, paintings, photographs and
sculptures, and architectural designs.
 Indian Government Initiatives
• The office of the “Controller General of Patents, Designs and Trademarks
(CGPDTM)” has been set up under the Department of Industrial Policy and
Promotion, in the Ministry of Commerce and Industry.
• The central government supervises the functioning of the Patent Office, Patent
Information System, the Trademarks Registry, the Geographical Indications
Registry.
• A copyright office has been set up in the Department of Education, Ministry of
Human Resource Development to provide all facilities including registration of
copyrights and its related rights.
 (Continued)
The central government administers all matters relating to patents, designs,
trademarks and geographical indications and supervises the functioning of:
• The Patent Office
• The Patent Information System
• The Trademarks Registry
• The Geographical Indications Registry
 Legislative Framework
The following are some of the IPR-related, activity-specific legislations passed in
India:
• Design : Design Act 2000
• Trademark : Trademarks Act, 1999
• Copyright : The Copyright Act, 1957 as amended in 1983, 1984 and
• 1992, 1994, 1999 and the Copyright Rules, 1958.
• Layout Design of Integrated Circuits : The Semiconductor Integrated Circuit
Layout Design Act 2000. (Enforcement pending).
• Protection of Undisclosed Information : No exclusive legislation exists but the
matter would be generally covered under the Contract Act, 1872.
• Geographical Indications : The Geographical Indication of Goods (Registration
and Protection) Act 1999.
 Patent

• A patent is a protection document that certifies the priority,

authorship, and property right to invention (utility model). An
invention is a result of intellectual activity of a human being
in any field of technology. It can be a product or a process
that provides a new way of doing something as well as the
novel use of a product or process already known. In order to
be protected by a patent an invention must conform to certain
conditions that are prescribed in the corresponding laws and
regulations of a country where the protection is applied for.
Among such conditions are the following:
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• Among such conditions are the following:

• Invention must be new;
• Invention must have an inventive step;
• Invention must be practically applicable.
 Continue….

• The scope of the granted legal protection is defined by the

patent claims. The interpretation of the patent claims shall be
accomplished within the patent description and relevant
drawings.
• A patent owner has an exclusive right to use and dispose the
invention as well as to prohibit others from using this
invention without the owner’s consent within the patent
validity term. After the expiration of the patent validity term
the invention becomes available to commercial exploitation
by others.
 Trademarks
A trademark is a visual symbol that distinguishes the goods or services
of one enterprise from those of the competitors.

A trademark, also known as brand name in ordinary language, is a

visual symbol in the form of a word, signature, name, device, label,
numerals or combination of colours used by one enterprise on goods or
services or other articles of commerce to differentiate it from other
similar goods or services originating from a different enterprise.
 Functions of Trademarks

Under modern business conditions a trademark performs the

following functions:

• It identifies the goods/or services and its origin

• It guarantees its unchanged quality
• It advertises the goods/services
• It creates an image for the goods/services.
 Registration of Trademarks
• Any person who has the legal claims of a trademark can apply to the
Registrar of Trademarks for its registration.
• The application shall be made in the name of an individual, partners of a
firm, a Corporation, any government department, a trust or joint
applicants claiming to be the proprietor of the trademark.
• The application shall be filled in the office of the Trademarks Registry
within whose territorial limits the principal place of business in India of
the applicant is located. In the case of joint applicants it shall be filled in
the office of the Trademarks Registry within whose territorial limits the
principal place of business in India is situated.
 (Continued)
• With regard to the acceptance or rejection of application, the Registrar
may accept the application absolutely or subject to such amendments,
modifications, conditions or limitations, if any, as he may think fit, or
refuse the application.
• In the event of a rejection or conditional acceptance of an application, the
Registrar shall put in writing the grounds for such refusal or conditional
acceptance and the materials used by him in arriving at his decision.
• Once a trademark is registered, the applicant will receive from the
Registrar a certificate in the prescribed form, sealed with the seal of the
Trademarks Registry. The duration of the registration of a trademark is
10 years, but may be renewed from time to time according the provisions
of the Act.
 Infringement of Trademarks
Infringement is committed in the following cases:

• The mark is identical and is used for similar goods/services

• The mark is similar to the registered mark and is used for the same or similar
goods/services as covered by the registered trademark
• The mark is identical with the registered trademark and is used for identical
goods; and the mark is therefore likely to cause confusion in the minds of the
public
 Copyright Act

• India has one of the most up-to-date copyright protection laws in the world,
governed by the Copyright Act, 1957.
• A major landmark in the sphere of copyright during 1999 was the amendment
to the Copyright Act of 1957 to make it fully attuned with the provisions of the
TRIPS Agreement. Called the Copyright (Amendment) Act, 1999, this
amended law became effective from 15 January, 2000.
• The Copyright Act, 1957 lays down mandatory punishment for piracy
of copyrighted matter in accordance with the gravity of the offence to
deter infringement, in compliance with the TRIPS Agreement.
 Other IPRs
• Geographical indications
• Industrial designs
• Integrated circuits
• Trade secrets
 The Regulation of Competition

The regulation and protection of competition usually requires a competition

policy backed by an appropriate legislation. There are three basic areas of
such competition policy:

• Control of dominant firms by regulation

• Control of mergers to prevent the possibility of emergence of monopolies
• Control of anti-competitive acts like full line forcing and predatory pricing
 Corporate Control in Competition

• Constraints in developing countries

• The role of banks
• Ownership concentration
 The Benefits of Competition

Competition improves the conduct of managers, as they understand

that in such markets only the fittest can survive. This, in turn, improves quality of products and
reduces prices for consumers, and
maintains or increases market share, and return on shareholders’
investment.

 Competition in the product market

 Competition in the capital market
 The Competition Act, 2002
The Competition Act is important for businesses in three main
areas:
• Commercial agreements and trading practices
• Conduct towards competitors, suppliers and customers,
especially in the case of firms with a strong market position
• Mergers and acquisitions
 Objectives
The basic objectives of the Competition Bill that is designed to
eventually replace the MRTP Act are:

• Encourage competition
• Prevent abuse of dominant position
• Protect the consumer
• Ensure a level playing field to participate in the Indian economy
Focus Areas of the Competition
Act
• Agreement amongst enterprises
• Abuse of dominance
• Mergers of combination among enterprises
 The Foreign Exchange
Regulation Act, 1973
• The FERA was promulgated in 1973 and it came into effect on 1
January, 1974.
• FERA, 1973 was enacted when India was passing through an acute
foreign exchange crisis. India had less than USD 1 billion foreign
exchange reserves in the exchequer.
 FERA: Objectives
The primary objective of FERA was to conserve the country’s forex
reserves and to ensure their proper utilization with the view to
helping the economic growth of the country.

With this end in view, FERA could regulate the acquisition, holding,
transfer or disposal of immovable property abroad by Indian
nationals; it could regulate participation by Indians in the trading,
commercial and industrial
 Main Provisions
• All foreign companies that sought approval under FERA, save those in
shipping and airlines, had to convert themselves into
Indian companies.
• A minimum of 74 per cent of shareholding by foreign principals would
be permitted only in case of companies that produced (a) certain
specified items listed in the Industrial Policy of 1973; or (b) primarily
export-oriented commodities; or (c) goods employing state-of-the-art
technology; or (d) tea; or (e) companies engaged in trading not exceeding
25 per cent of ex-factory value of production or having a turnover of less
than INR 50 million.
 (Continued)

• If a company is 100 per cent export oriented, a foreign shareholding

exceeding 74 per cent might be permitted, the decision being based on merit
in each case.
• A foreign shareholding of 40 per cent would be permitted in case of
companies engaged in the production of items other than those listed in the
Industrial Policy of 1973, trading, consultancy and plantation companies
other than those that produce tea.
• In case of airlines and shipping companies, the extent of foreign
shareholding would be determined on a reciprocal basis.
• In case of banking companies, the extent of foreign shareholding will be
determined based on the guidelines issued by the Reserve Bank of India and
the Banking Department of the Ministry of Finance, Government of India.
 Restrictive Provisions

• Restrictions on dealing in foreign exchange

• Restrictions on payments
• Restriction on import and export of certain currency and bullion
• Duty of persons entitled to receive foreign exchange
• Payment for exported goods
• Regulation of export and transfer of securities
• Restrictions on holding of immovable property outside India
• Restriction on acquisition, holding etc. of immovable property in India
• Restriction on establishment of place of business in India
 The Foreign Exchange Management
Act, 1999
 The Foreign Exchange Management Act (FEMA), 1999 has repealed the Foreign
Exchange Regulation Act (FERA) 1973. The FEMA consolidates and amends the
Act relating to foreign exchange.
 FEMA was passed by Lok Sabha on 2 December, 1999. It extends to the whole of
India and applies to all branches, offices and agencies outside India owned or
controlled by any Indian national.
 It also applies to any contravention there under committed outside India by any
person to whom this Act applies. The Act came into force with effect from 1 June,
2000.
 Objectives

FEMA has the following twin objectives: (i) to facilitate external trade and
payments and (ii) to promote the orderly development and maintenance of
foreign exchange market in India. In other words, the objective of FEMA is
to consolidate and amend FERA so as to promote foreign trade, while
promoting the country’s foreign exchange market.
 Provisions
If anybody contravenes any provision of FEMA:

• Such person shall be liable to penalty up to twice the sum

involved in such contravention
• An Appellate Tribunal for Foreign Exchange shall be established
by the Central Government to hear appeals against the orders of
the adjudicating authorities
• If anybody does not make full payment of the penalty he shall be
liable for civil imprisonment
• The Act empowers the Central Government to suspend or relax,
either for a specific period or indefinitely the operation of all or
any of the provisions of FEMA.