MODULE 4

STRUCTURE AND STATUS OF BUSINESS

& INDUSTRY IN INDIA
STARTUP & MSME SECTOR
 India’s Micro, Small, and Medium Enterprises
(MSMEs) base is the largest in the world after
China
 Manufacturing of over 6,000 products –
ranging from traditional to hi-tech items.
  ‘Make in India’ has boosted Startups
 As per the official estimates, there are about
63.05 million micro industries, 0.33 million
small, and about 5,000 medium enterprises
in the country.
 C:\Users\murali\Documents\The-new-wave-
Indian-MSME.pdf
MSME CLASSIFICATION
 For the manufacturing sector, the definition of an
MSME is based on a company’s capital investment in
plant and machinery. The threshold limits are:
 Micro: when investment does not exceed Rs 2.5
million (US$34,040)
 Small: when investment is more than Rs 2.5 million
(US$34,040) but does not exceed Rs 50 million
(US$680,875); and
 Medium: when investment is more than Rs 50
million (US$680,875) but does not exceed Rs 100
million (US$1.3 million)
 MSME CLASSIFICATION
 For the services sector, the definition of an MSME is
based on a company’s investments in equipment.
The threshold limits are
 Micro: When investment does not exceed Rs 1
million (US$13,617);
 Small: When investment is more than Rs 1 million
(US$13,617) but limited to Rs 20 million
(US$272,350); and
 Medium: When investment is more than Rs 20
million (US$272,350) but less than Rs 50 million
(US$680,875).
NEW CLASSIFICATION
 The new classification of MSMEs, however, is
yet to be enforced by amendment.
 Micro: a unit where the annual turnover does
not exceed Rs 50 million (US$680,875);
 Small: a unit where the annual turnover is more
than Rs 50 million (US$680,875) but does not
exceed Rs 750 million (US$10.1 million); and
 Medium: a unit where the annual turnover is
more than Rs 750 million (US$10.1 million);
rupees but does not exceed Rs 2.5 billion
(US$33.8 million).
 BENEFITS TO MSME
 Some of the other concessions available to the
MSMEs are listed below:
 Collateral free loans from banks;
 50 percent subsidy on patent registration;
 1 percent exemption on the interest rate on
overdraft;
 Concession on power utility bills;
 Eligible for industrial promotion subsidy;
 Protection against delayed payments; and
 Reimbursement of ISO certification charges.
STARTUP INDIA’S 19-POINT ACTION PLAN
 Self-certification Compliance
 Single Point of Contact via Startup India Hub
 Simplifying Processes with Mobile App and Portal
(for registration, filing compliances & obtaining
information)
 Legal Support, Fast Tracking & 80% reduction in patent
registration fee
 Relaxed Norms of Public Procurement
 Easier & Faster Exit
 Funding Support via a Fund of Funds corpus of INR
10,000 crore
 Credit Guarantee Funding
 Tax Exemption on Capital gains
 3-Year Income Tax Exemption
STARTUP INDIA’S 19-POINT ACTION PLAN

 Tax Exemption on Investments above Fair Market

Value (FMV)
 Annual Startup Fests (national & international)
 Launch of World-class Innovation Hubs under Atal
Innovation Mission (AIM)
 Set up of country-wide Incubator Network
 Innovation Centres to augment Incubation and R&D
 Research Parks to propel innovation
 Promote Entrepreneurship in Biotechnology
 Innovation Focused Programs for Students
 Annual Incubator Grand Challenge
SATARTUPS IN INDIA
 A startup is defined as an entity that is
headquartered in India, which was opened
less than 10 years ago, and has an annual
turnover less than ₹100 crore 
 India is home to the world’s third largest
startup ecosystem, having added over 1,300
tech startups in 2019
OPPORTUNITIES AND GROWTH
DRIVERS
 Diversity in India – Boon and Curse
 Technological Change
 Increased Political Will and Government
Support
 Companies Increasingly Seek to Engage in
Open Innovation
 Changing Perceptions towards
Entrepreneurship
CHALLENGES

 Building and Scaling an Indian Startup

 Diversity and the Digital Divide
 Taking Products to Market and Low
Willingness to Pay
 Hiring Qualified Employees
 Complex Regulatory Environment
EXPORT ORIENTED COMPANIES
 Export oriented units are units undertaking to
export their entire production of goods
 manufacturing, services, development of
software, repair, remaking, reconditioning, re-
engineering including making of gold / silver /
platinum jewellery and articles.
 nits involved in agriculture, agro-processing,
aquaculture, animal husbandry, bio-
technology, floriculture, horticulture,
pisciculture, viticulture, poultry, sericulture
and granites can also obtain the status of EOU.
BENEFITS ENJOYED BY EXPORT
ORIENTED UNITS
 EOUs are allowed to procure raw material or
capital good duty free, either through import or
through domestic sources;
 EOUs are eligible for reimbursement of GST;
 EOUs are eligible for reimbursement of duty paid
on fuels procured from domestic oil companies;
 EOUs are eligible for claiming input tax credit
 on the goods and services and refund thereof;
 Fast track clearance facilities;
 Exemption from industrial licensing for
manufacture of items reserved for SSI sector.
EXPORT
 For being accorded the status of EOU, the
project must have a minimum investment of
Rs.1 crore in plant and machinery.
 This condition does not apply for software
technology parts, electronics hardware
technology parks and bio-technology parks
MAJOR EXPORT COMPANIES
 Reliance Industries
 Tata Steel
 Sun Pharma
 Rajesh Exports
 Tata Motors
 Vardhaman Textiles
 International Lace Trade Center
 Bajaj International Private Limited
 Arvind Mills
 Kiran Gems Private Limited
MNC’S IN INDIA
 Multinational Corporations (MNCs) or
Transnational Corporation (TNC), or
Multinational Enterprise (MNE) is a business
unit which operates simultaneously in
different countries of the world. In some
cases the manufacturing unit may be in one
country, while the marketing and investment
may be in other country.
 They are multi process/ multi –product
enterprises
 Ex: Toyota, IBM, ITC, TATA, Samsung
CHARACTERS OF MNCS
 Mode of Transfer: The MNC has considerable
freedom in selecting the financial channel
through which funds or profits or both are
moved
 Value for Money:By shifting profits from
high-tax to low-tax nations, MNCs can reduce
their global tax payments
 Flexibility:MNCs can extend trade credit to
their other subsidiaries through open account
terms, say from 90 to 180 days
REASONS FOR GROWTH OF MNCS
 Non-Transferable Knowledge: It is often possible
for an MNC to sell its knowledge in the form of
patent rights and to license foreign producer.
 Exploiting Reputations: In some situation, MNCs
invest to exploit their reputation rather than
protect their reputation
 Protecting Reputations:Normally, products,
develop a good or bad name, which transcends
international boundaries
 Protecting Secrecy: MNCs prefer direct
investment, rather than granting a license to a
foreign company if protecting the secrecy of the
product is important
REASONS FOR GROWTH OF
MNCS
  Availability of Capital: The fact that MNCs have
access to capital markets has been advocated as
another reason why firms themselves moved
abroad.
 Product Life Cycle Hypothesis: It has been
argued that opportunities for further gains at
home eventually dry up
 Avoiding Tariffs and Quotas: MNCs prefer to
invest directly in a country in order to avoid
import tariffs and quotas
 Symbiotic Relationships: Some firms have
followed clients who have made direct investment
PROBLEMS WITH MNCS
 They can exert pressure on the government
 It can be difficult to manage economics in
which MNCs have extensive investments
 MNCs are likely to take advantage of any
opportunity to gain profits.
 MNCs can also shift profits to reduce their
total ‘tax burden by showing larger profits in
countries with lower tax rates
 MNCS IN INDIA
 At present MNCs in India can
 Increase foreign equity up to 51 percent by
remittances in foreign exchange in specified high
priority areas
 Borrow money or accept deposit without the
permission of Reserve Bank of India
 Transfer shares from one non-resident to another
non-resident
 Disinvest equity at market rates on stock exchanges
 Go for 100 percent foreign equity through the
automatic route in Specified sectors
 Deal in immovable properties in India
 CRITICISMS AGAINST MNCS IN INDIA
 They are interested more on mergers and
acquisitions and not on fresh projects
 They have raised very large part of their financial
resources from within the country
 They supply second hand plant and machinery
declared obsolete in their country
 They are mainly profit oriented and have short term
focus on quick profits
 They use expatriate management and personnel
rather than competitive Indian Management
 Though they collect most of the capital from within
the country, they have repatriated huge profits to
their mother country
INDUSTRY ASSOCIATIONS AND
BODIES
 Confederation of Indian Industry
 Society of Indian Automobile Manufacturers (
SIAM)
 Hotel Association of India (HAI)
 Software Technology Parks of India (STPI)
 Telecom Regulatory Authority of India (TRAI)
 Indian Drug Manufacturers' Association
 The Association of Mutual Funds in India (AMF
I)
 Cement Manufacturers' Association (CMA)
 EMINENT INDUSTRIES AND PERSONS
 Mukesh Dhirubhai Ambani is an Indian business tycoon
who is the Managing Director and Chairman of Reliance
Industries Limited (RIL). Net worth US$44.6 billion. He
owned the 18th position as the wealthiest person in the
world.
  Indian multinational conglomerate company
 headquartered in Mumbai, Maharashtra.
 Reliance owns businesses across India engaged in energy,
petrochemicals, textiles, natural resources, retail, and
telecommunications.
 Reliance is one of the most profitable companies in India,
the largest publicly traded company in India by 
market capitalization,[5] and the largest company in India
as measured by revenue after recently surpassing the
government-controlled Indian Oil Corporation.
EMINENT INDUSTRIES AND PERSONS
 Azim Hashim Premji, a 72 years old Indian
business magnet, is the chairman of Wipro Limited
and also known as Czar of Indian IT Industry. His
net worth is US$17.8 billion
 WIPRO Group is an Indian 
multinational corporation that provides
information technology, consulting and business
process services. It is headquartered in Bangalore, 
Karnataka, India.
 Wipro Enterprises (officially Wipro Enterprises
Private Limited) is the India-based holding
company that owns both Wipro Infrastructure
Engineering and Wipro Consumer Care and
Lighting. Wipro Enterprises is headquartered in 
Bangalore, India.
SUN PHARMA
 Dilip Shanghvi, of 62, is the founder of Sun
Pharmaceuticals with the net worth of
US$10.8 billion.
 With the growth flow he acquired Caraco
Pharma (American Company), Taro Pharma
(Israel Company) to expand Sun. he also
bought the shares in Ranbaxy which made
Sun the largest drug company in India and
5th largest in the world.
ADANI
 Gautam Shantilal Adani is a 56 years old
Indian tycoon who is the founder and
chairman of Adani Group with the net worth
US$7.2 billion. Adani Group deals in
businesses spanning coal trading, ports,
power generation, coal mining, logistics,
agriculture, edible oils, oil & gas exploration,
and transmission and gas distribution.
 Adani Group also operates Mudra Port which
is the largest private sector port in India.
ANAND MAHINDRA
 Anand Mahindra, of 63, is the chairman of
Mahindra Group with the net worth US$2
billion.
 Mahindra Group operates a chain of 20
industries which deals in information
technology, automotive, finance and
insurance, leisure and hospitality, aerospace,
defense, agribusiness, farm equipment,
energy, aftermarket, industrial equipment,
components, construction equipment,
logistics, real estate and retail.
NARAYANA MURTHY
 NARAYANA MURTHY-INFOSYS: Narayana Murthy
founder of Infosys on 1981, a global software
consulting company headquartered in Bangalore,
He served as the CEO of Infosys during 1981 –
2002, as the Chairman and Chief Mentor during
1981 – 2011, As the Chairman Emeritus during
August 2011 – May 2013. Under his leadership,
Infosys was listed on NASDAQ in 1999.He was
listed among the 12th greatest entrepreneurs of
our time by the Fortune magazine in 2012.
The Economist ranked him among the 10 most-
admired global business leaders in 2005.
YUSUF ALI M.A
 Yusuf Ali M.A is businessman from Thrissur
and is the Managing Director of Lulu Group of
companies. According to Forbes magazine,
Yusuf Ali is the 24th richest Indian and the
270th richest in the world with an annual
turnover of 5.5 billion dollars globally. 
Taking Kerala tour packages with family to
the native place of this rich entrepreneur
will show you his humble beginning and how
this place has prospered due to Kerala
tourism.
CRISIS MANAGEMENT IN
BUSINESS AND INDUSTRY
 Meaning of crisis:
Crisis refers to sudden unplanned events
which causes major disturbances in
the organization.

 According to BARTON : “A crisis is any event that can

seriously harm the people, reputation or financial
condition of an organization”.
NATURE OF
CRISIS
 Sudden event
 Short notice

 Triggers fear

 Serious consequences

 Lack of information

 Quick response needed

 Unpredictable
 TYPES OF
CRISIS
 Physical Damage Crisis :- A crisis which is characterized by the
physical damage of the individual, organization or the society.

 Causes of Physical damage:-

 Natural crisis :- Every business is vulnerable to natural disasters.
These includes things such as, floods & earthquakes.
Although disasters are mostly unpredictable, beyond our
responsibility and control.
 Earthquake :- Earthquake is a sudden release of energy in the
earth crust, that creates a waves. Such as, volcanic activity,
landslides, mining, nuclear test.
 Drought :- Drought is a period were abnormal low rainfall,
leading to a shortage of water supply.
 Floods :- An overflow of a large amount of water beyond
its normal limits.
Non Physical Damage :- Non physical damage crisis means
crisis reflected by no physical damage of the individual,
organisation or society.
 Product Issues Crisis :- This type of crisis is a potential crisis
for the company, because the product may fail in-spite of
appropriate research and development techniques are followed.
 Economic Crisis :- This type of crisis occurs when an
organisation experiences a cash problem.
 Human Resources Crisis :- It usually involves lower-level
workers. It take a variety of form. Such as, strikes, sexual
harassment, discrimination and workplace violence.
 Crisis of Organisational Miss-deeds:-
 Crisis of Deception :- Organization face crisis of
deception, because management make fake promises and
wrong commitment to the customer.
 Crisis of Management Misconduct :- Organization face
crisis of miss-conduct, when management indulges in
illegal activity.
STAGES OF
CRISIS :
 Pre – crisis stage

 The Acute - crisis stage

 The Post crisis stage

PRE-CRISIS STAGE
 Itis stage which has a opportunity to turn
negative situation into a positive one.
 Here someone are discovers a critical situation
and bring it to the attention of their superior
officer.
 Solutions:

When superior officers known that

condition they don’t want to show outside of
organization.
THE ACUTE – CRISIS STAGE

 A crisis becomes visible out sides of the organization.

Solution:
 Take charge of the situation quickly.

 Take necessary action to fix the problem.

THE POST - CRISIS STAGE

 This is the stage which is process about the recoup

their losses or evaluating the organization changes
made in organization.
 Solution: Recoup any losses evaluate the
organization
performance during the crisis.
CONSEQUENCES OF CRISIS

• Poor capital
• Loss of assets
• Infrastructure destruction
• Threatened stakeholders
• Damaged reputation
• Lack of cash flow
• others
FINANCIAL CRISIS
Meaning

The term financial crisis is applied broadly to a

variety of situation in which some financial assets suddenly
lose a large part o their nominal value.
CONSEQUENCES OF FINANCIAL CRISIS

 Complementarities in financial markets

 Leverage
 Asset-liability mismatch
 Uncertainty and herd behavior
 Regulatory failures
 Contagion
 Recessionary effects
WHAT IS CRISIS
MANAGEMENT??
Meaning – It is a process by which an organisation deals with a
major event that threatens to harm the organisation, its stakeholders, or
the general public.
 The study of crisis management originated with the large scale
industrial and environmental disasters in the 1980s
 Purpose crisis management
• Prevention
• Survival
• Successful outcome
OBJECTIVE OF CRISIS
MANAGEMENT

 To identify the potential crisis

 To be well prepared for crisis
 To determine the risk
 To understand the consequences of crisis
 To minimize the potential impact of crisis
 To analyse the probability of crisis
ELEMENTS OF CRISIS
MANAGEMENT
 Understanding
 Crisis Management Planning
 Contingency Planning
 Business Continuity Planning
 Inequality
 Social Media
 Role of Apologies
 Structural Functional Systems
CRISIS COMMUNICATION
The effort taken by a company to communicate with the
public and stockholders when an unexpected event occurs
that could have a negative impact on the company's
reputation.

Crisis communication team involves,

 CEO

 Head public relations

 Vice presidents, Managers of key departments

 Safety or Security officer

 Company lawyers
STEPS IN CRISIS COMMUNICATION
 Anticipate crisis
 Identify crisis communications team
 Identify and train spokesperson
 Spokesperson training
 Establish systems
 Identify stakeholders
 Develop holding statement
 Assess the crisis situation
 Finalize and adapt key messages
 Post crisis analysis
STRATEGIES FOR MANAGING CRISIS

 Determine the crisis

 See the big picture
 Gather relevant team
 Set timeline
 Develop procedural manual
 Seek external experts
 Speak to media
 Fine tune of communication
 Protect reputation