Business Environment

Book description

Managers need to need to keep abreast of the latest economic developments in countries around the world, and use this information to analyse and correlate with the economic environment in which businesses function to be able to make informed decisions that will enable the organization to progress despite obstacles. A course in business environment fosters this ability and in Business Environment A. C. Fernando integrates concepts with real-world situations and the most recent data to help students grasp complex economic concepts, a clear understanding of which is required to comprehend the various facets of business environment. He adopts a jargon-free style and presents the subject matter logically, from elementary to complex concepts to engage the student completely. Divided into eight parts comprising fifty chapters, the book has been designed to be of particular use to students who are not familiar with the concepts of economics.

Table of contents

  1. Cover
  2. Title Page
  3. Contents
  4. About the Author
  5. Dedication
  6. Preface
  7. Part I - Fundamental Concepts
    1. 1. The Functioning of an Economy: Basic Concepts
      1. What is an Economy?
      2. Economic Activity
      3. Wants: The Basis of All Economic Activities
      4. Circular Flow of Economic Activity
        1. Real Flows
        2. Money Flows
      5. Production
      6. Definition
      7. Goods
      8. Utility
      9. Goods
        1. Free Goods and Economic Goods
        2. Consumption
      10. Value
      11. Wealth
        1. Classes
        2. Wealth and Welfare
      12. Consumption
      13. Human Wants
        1. Formation
        2. Categories
        3. Characteristics
      14. Standard of Living
        1. Factors Affecting the Standard of Living
        2. The Standard of Living in India
      15. Engel’s Law of Family Expenditure
      16. Scales of Preferences
      17. Savings
      18. Summary
      19. Key Words
      20. Discussion Questions
      21. Suggested Readings
    2. 2. National Income
      1. Definitions
        1. Marshall’s Production-based Definition
        2. Pigou’s Income-based Definition
        3. Fisher’s Consumption-based Definition
      2. Concepts in National-Income Analysis
        1. Gross National Product
        2. Net National Product
        3. National Income at Factor Cost
        4. Personal Income
        5. Personal Disposable Income
        6. Per Capita Income
      3. Measurement of National Income
        1. The Product Method
        2. The Income-received Method
        3. The Consumption-Savings Method
        4. A Comparison of the Three Methods
      4. The Sectoral Composition of National Income
      5. Estimates of the National Income of India
        1. Post-Independence Background
        2. Special Features of the 1980–81 Series
        3. RBI’s Role in National Income Accounting
        4. Advance Estimates and Quick Estimates of National Income
      6. Difficulties in the Measurement of National Income
      7. National Income Data and the Changing Profile of the Indian Economy
        1. Characteristics of the Indian Economy
        2. The National Statistical Commission
        3. Limitations of National Income Estimation in India
      8. Determinants of the Size of a Country’s National Income
      9. Reasons for India’s Low National Income
        1. Causes
        2. Political Causes
        3. Social Causes
        4. Remedies
      10. National Income and Economic Welfare
      11. Inequalities of National Income Distribution
        1. Causes
        2. Effects
        3. Capital Formation
        4. Steps Taken by Governments to Reduce Inequalities
      12. Uses of National Income Data
      13. Summary
      14. Key Words
      15. Discussion Questions
      16. Suggested Readings
    3. 3. Business and its Environment
      1. Business: Meaning, Characteristics and Objectives
      2. Divisions of Business
      3. Characteristics of Modern Businesses
        1. Large Size
        2. Global Reach
        3. Oligopolistic Structure
        4. Based on Technology
        5. Diverse
        6. Government Control
        7. Emerging Ethical Consciousness
      4. Business Environment
        1. The Internal Environment
        2. The External Environment
      5. The Economic Environment
        1. Economic Systems
        2. Structural Equilibrium
        3. Monetary Policy
        4. Fiscal Policy
        5. Economic and Price Stability
        6. Money and Capital Market
        7. Factor Endowments
        8. Size of the Market
        9. Social Overhead Capital
        10. Power
        11. External Trade/International Environment
      6. The Non-Economic Environment
        1. The Socio-Cultural Environment
        2. The Educational Environment
        3. The Politico-Legal Environment
        4. The Demographic Environment
      7. Summary
      8. Key Words
      9. Discussion Questions
      10. Suggested Readings
    4. 4. Natural Resources
      1. Introduction
      2. Land Resources
      3. Irrigation
      4. Power
        1. Eco-Efficiency Strategy of Power Grid
        2. Hydropower and Sustainable Development
      5. Forest Resources
        1. Forest and Wildlife Conservation
        2. Forest Cover
      6. Fresh Water Resources
      7. Minerals
        1. Coal Mining
        2. Iron Ore
        3. Manganese Ore
        4. Bauxite
        5. Copper, Lead and Zinc
      8. Sea Wealth
      9. Summary
      10. Key Words
      11. Discussion Questions
      12. Suggested Readings
    5. 5. The Technological Environment
      1. What is Technology?
      2. Technology and Development
        1. The Contribution of Technology
        2. Managing Technology for Development
      3. Integrating Technology with Business
      4. Technology in Developing Countries
        1. Technology Acquisition and Protection
        2. Technology Transfer
        3. The Need for Technology Transfer
        4. Forms of Technology Transfer
      5. Innovations
      6. Varying Research and Development Budgets
      7. Technical Cooperation and India’s Capabilities
      8. India and the Global Knowledge Market
      9. Summary
      10. Key Words
      11. Discussion Questions
      12. Suggested Readings
    6. 6. Human Resource Development
      1. Evolution
      2. What is Human Resource Development?
      3. Human Capital
      4. Human Resource Development in India
      5. Functions
      6. Human Development Index
      7. Summary
      8. Key Words
      9. Discussion Questions
      10. Suggested Readings
    7. 7. India’s Population and its Impact on the Economy
      1. The Economic Effects of a Growing Population
      2. The Economic Effects of a Declining Population
      3. Factors Responsible for Changes in the Size of Population
        1. Birth Rate
        2. Death Rate
      4. Theories of Population
        1. The Malthusian Theory of Population
        2. The Optimum Theory of Population
        3. The Theory of Demographic Transition
      5. Excessive Population as an Obstruction to Growth
      6. Features of the Indian Population
      7. India’s Population Policy
        1. The Population Policy,
        2. Progress under the Policy
        3. The National Population Policy,
      8. Trends in Population and Family Welfare Programme
      9. The Scorecard
      10. Summary
      11. Key Words
      12. Discussion Questions
      13. Suggested Readings
    8. 8. Capital Formation, Savings and Investment
      1. What Comprises Capital?
      2. Capital Formation
        1. Growth in Capital Formation
        2. Sources of Capital Formation
        3. Capital Formation in India
      3. Capital Accumulation
        1. Factors Affecting Capital Accumulation
        2. Capital Accumulation in Developing Countries
      4. Savings
        1. Sources of Savings
        2. Domestic Savings in India (1951–2008)
      5. Investment
        1. Rate of Investment and Capital Formation
        2. Reasons for Low Level of Investment in India
        3. Investment Commission
      6. Summary
      7. Key Words
      8. Discussion Questions
      9. Suggested Readings
  8. Part II - Economic Systems and Policies Relating to Business
    1. 9. Economic System and Capitalism
      1. What is an Economic System?
      2. Capitalism
        1. Private Property
        2. Consumer Sovereignty
        3. Freedom of Enterprise
        4. Enlightened Self-Interest
        5. Profit Motive
        6. Competition
        7. Existence of Markets and Prices
        8. Absence of a Central Plan
        9. Limited Government
        10. Active Entrepreneurship
        11. Class Conflict
        12. Use of Advanced Technology
        13. Specialization Based on Division of Labour
        14. Extensive use of Money
      3. Merits
        1. Automatic Functioning
        2. Greater Efficiency and Incentive for Hard Work
        3. Higher Rate of Capital Formation and Growth
        4. Economic Development and Prosperity
        5. Optimum Utilization of Resources
        6. A Just System of Reward and Penalty
        7. Democratic System
        8. Adaptability
        9. Encouragement to Enterprise and Risk Taking
      4. Demerits
        1. Excessively Materialistic
        2. Not as Productive as other Economic Systems
        3. Gives Rise to Class Conflict
        4. Social Injustice and Economic Inequality
        5. Ignores Human Welfare
        6. Periodic Economic Instability and Unemployment
        7. Precedence of Property Rights over Human Rights
        8. Emergence of Monopolies
        9. Misallocation of Resources
        10. Malpractices
      5. Summary
      6. Key Words
      7. Discussion Questions
      8. Suggested Readings
    2. 10. Socialism
      1. What is Socialism?
      2. Features
      3. Merits
      4. Demerits
      5. Summary
      6. Key Words
      7. Discussion Questions
      8. Suggested Readings
    3. 11. Mixed Economy
      1. Mixed Economy and its Types
      2. Features of the Indian Mixed Economy
        1. Coexistence of Private and Public Sectors
        2. Nationalization of Basic Industries
        3. Reduction of Inequalities of Income
        4. Provision of Social Welfare Measures
        5. Promotion of Economic Development through Planned Efforts
        6. Resource Allocation through the Price System and Government Directions
        7. Government Control and Regulation of the Private Sector
        8. Consumer Sovereignty
        9. Government is Committed to the Promotion of Public Welfare and Protection of Labour, the Poor and the Marginalized
        10. Control of Monopoly
        11. Prices are Determined by Market Forces, but Products of Public Sector are Governed by Administered Prices
      3. Advantages of India’s Mixed Economy
        1. Achievement of Faster Economic Growth
        2. Best Allocation of Resources
        3. Balance between the Private and Public Sectors
        4. The Establishment of a Welfare State
        5. Heavy Capital Investment through Planned Effort
      4. Disadvantages
        1. Undue Emphasis on the Growth of Public Sector
        2. Inefficiency of Both the Sectors
        3. Ineffective Control of the Private Sector
        4. Economic Fluctuations
        5. Failure to Solve Demographic and Unemployment Problems and Inflation
        6. Extensive and Corrupt Bureaucracy
      5. Conclusion
      6. Summary
      7. Key Words
      8. Discussion Questions
      9. Suggested Readings
    4. 12. The Role of Public Policies in Governing Business
      1. Public Policy: A Definition
      2. Classification
      3. Levels
      4. Elements
      5. Public Policies and the Government
        1. Limitations of Governments in Executing Public Policy
      6. Need for Public Policies in Business
      7. The Involvement of Business in Public Policy Decision Making
      8. Business and Politics: Levels of Involvement
      9. National Economic Growth
        1. Government Regulations in Business
      10. Public Policies and Government Regulations in India
      11. Functional Regulations
      12. Summary
      13. Key Words
      14. Discussion Questions
      15. Suggested Readings
    5. 13. Economic, Monetary and Fiscal Policies
      1. Economic Policy
      2. Objectives of Economic Policies
      3. Monetary Policy
        1. Evolution
        2. Goals and Objectives
        3. Functions
        4. Monetary versus Fiscal Policy
        5. The Instruments of Monetary Policy
        6. Monetary Policy in Developing Countries
      4. The Indian Monetary Policy
        1. Instruments of the Indian Monetary Policy
        2. The Evaluation of the Indian Monetary Policy
      5. Fiscal Policy
        1. Objectives
        2. Instruments
        3. Fiscal Policy and Economic Stabilization
        4. The Evaluation of Fiscal Policy
      6. Summary
      7. Key Words
      8. Discussion Questions
      9. Suggested Readings
    6. 14. Foreign Trade Policy
      1. Statement of Trade Policy
      2. Objectives of India’s Foreign Trade Policy
      3. Strategies Adopted in India’s Foreign Trade Policy
      4. Partnership with Private Players
      5. Roadmap of the Trade Policy
      6. Interim Foreign Trade Policy, 2009–10
      7. Foreign Trade Policy, 2009–14
      8. Highlights of the Foreign Trade Policy, 2009–14
      9. Industries’ Reaction
      10. Summary
      11. Key Words
      12. Discussion Questions
      13. Suggested Readings
  9. Part III - The Economics of Development
    1. 15. The Economics of Development
      1. The Subject and its Spectrum
      2. Why Economic Development?
      3. What is Economic Development?
      4. Basic Determinants
      5. Criteria
      6. Costs and Gains
        1. Costs
        2. Gains
      7. Summary
      8. Key Words
      9. Discussion Questions
      10. Suggested Readings
    2. 16. The Economics of Underdevelopment
      1. The Definition of Underdevelopment
      2. The Definition of an Underdeveloped Economy
      3. Underdeveloped Or Developing?
      4. Non-Uniformity of Underdevelopment
      5. Characteristics of an Underdeveloped Economy
        1. Low per Capita Income and Widespread Poverty
        2. Excessive Dependence on Agriculture
        3. Unexploited Natural Resources
        4. Primary-Producing Agricultural Economies
        5. Population Explosion
        6. Qualitatively Backward Population
        7. Disguised Unemployment
        8. Prevalence of Unemployment and Underemployment
        9. Deficiency and Poor Capital Formation
        10. Inadequate Development of Infrastructure
        11. Dependence on Exports
        12. Disparate Development
        13. Factor Disequilibrium
        14. Poor and Incompetent Administration
        15. Underdeveloped and Uncoordinated Fiscal and Monetary Organizations
        16. Existence of Inhibitory Social Institutions
        17. The Obstacles to Development
          1. Poverty
          2. Capital Deficiency
          3. Market Imperfections
          4. International Forces
          5. Foreign Rule
          6. Inhibiting Socio-Cultural Institutions
          7. Demonstration Effect
          8. Overpopulation
          9. Corruption
      6. Summary
      7. Key Words
      8. Discussion Questions
      9. Suggested Readings
    3. 17. Stages and Strategies of Economic Growth
      1. Stages of Economic Growth
      2. Rostow’s Stages of Economic Growth
        1. Traditional Society
        2. The Pre-Conditions for Take-Off
        3. The Take-Off
        4. The Drive to Maturity
        5. The Age of High Mass Consumption
        6. Beyond High Mass Consumption
        7. Objections to the Take-Off Theory
      3. Balanced versus Unbalanced Growth
      4. The Balanced Growth Theory
        1. The Meaning of Balanced Growth
      5. Critical Minimum Effort and the Big Push
        1. The Basic Postulates
        2. The Balanced Growth Doctrine: Rodan’s Analysis
        3. Nurkse’s Analysis
        4. Balanced Growth: Other Viewpoints
        5. How to Realize Balanced Growth?
        6. The Role of the State
        7. Criticism of the Theory
      6. The Unbalanced Growth Theory
      7. Summary
      8. Key Words
      9. Discussion Questions
      10. Suggested Readings
    4. 18. Role of the State in Economic Development
      1. Defects of the Free-Enterprise System
      2. The Evolution of the Concept of State Participation in Economic Development
      3. The Justification and Examples of Government Intervention
      4. The Rationale for State Interventon in Economic Affairs
      5. The Scope of Governmental Action
      6. Roles of the Government
        1. Regulator
        2. Promoter
        3. Entrepreneur
        4. Planner
      7. The Extent of Government’s Participation
        1. Reasons for Governments’ Participation in Development in Poor Countries
        2. Areas where Governmental Action is Vital
      8. Summary
      9. Key Words
      10. Discussion Questions
      11. Suggested Readings
    5. 19. Economic Planning: Meaning, Evolution and Features
      1. Meaning and Definition
      2. Evolution
      3. Factors that Facilitate Successful Planning in Developing Countries
      4. Objectives
      5. Key Features of a Planned Economy
      6. Summary
      7. Key Words
      8. Discussion Questions
      9. Suggested Readings
    6. 20. Industrial and Licensing Policy (1951–1991)
      1. Industrial Development in India
      2. What is an Industrial Policy?
        1. Components
        2. Importance
      3. The Industrial Policy Resolution of 1948
      4. The Industrial Policy Resolution of 1956
      5. The Industrial Policy of 1973
      6. The Industrial Policy of 1977
      7. The Industrial Policy of 1980
        1. Important Provisions
        2. Amendments in Appendix I
      8. The New Industrial Policy Of
        1. Industrial Licensing
        2. Foreign Investment
        3. Foreign Technology Agreements
        4. Public Sector
        5. The Monopolies and Restrictive Trade Practices (Mrtp) Act
      9. Reforms in the Industrial Sector
      10. Industrial Licensing
        1. Industries Covered
        2. Industries Exempted
        3. How to Apply for a Licence?
        4. Registration
        5. Special Procedure for Diversification
      11. Mrtp Clearance
      12. Summary
      13. Key Words
      14. Discussion Questions
      15. Suggested Readings
    7. 21. The New Economic Policy,
      1. Genesis
        1. Background
        2. Early Crisis Management Measures: Trendsetters of the Reform Process
      2. The Three Pillars of Economic Reforms
        1. Liberalization
        2. Privatization
        3. Globalization
        4. Industry and Labour Strategy
      3. Assessment of the New Economic Policy
        1. A Balance Sheet of Economic Reforms
      4. The Emergence of Corporate Governance
      5. Summary
      6. Key Words
      7. Discussion Questions
      8. Suggested Readings
    8. 22. The Indian Economy
      1. A Retrospective on the Indian Economy
      2. The 1950S
      3. The 1960S
      4. The 1970S
      5. The 1990S
      6. The New Millennium
      7. Agricultural and Rural Development
      8. Industrial Production and Manufacturing
      9. Infrastructure
      10. The Services Sector
      11. The Financial Services Sector
      12. Savings and Investment
      13. The Price Situation
      14. India’s National and per Capita Income
      15. Income Distribution and Poverty
      16. The External Sector
      17. Summary
      18. Key Words
      19. Discussion Questions
      20. Suggested Readings
  10. Part IV - Business and Society
    1. 23. Business and Society
      1. Business: an Integral Part of Society
      2. Society, Values and Institutions
      3. The Interrelationship between Business and Society
      4. Business-Society Interaction
      5. The Stakeholder Model of Business
        1. Primary and Secondary Stakeholders
        2. The Concept
        3. Criticisms of the Concept
      6. Socio-Economic Objectives of Business
      7. Benefits of Business to Society
      8. Problems Created by Businesses
      9. Summary
      10. Key Words
      11. Discussion Questions
      12. Suggested Readings
    2. 24. Business, Labour and Government
      1. Labour: Definition and Characteristics
      2. Labour Exploitation
      3. Protection of Employees’ Interests
      4. Trade Unions
        1. Rights of Recognized Trade Unions
        2. Indian Trade Unions
        3. Defects of Indian Trade Unions
        4. Management Concerns
      5. Post-Independence Labour Legislation in India
        1. Important Legislations
        2. The Industrial Disputes Act, 1947
        3. Problems with Indian Labour Laws
      6. Summary
      7. Key Words
      8. Discussion Questions
      9. Suggested Readings
    3. 25. Consumer Protection
      1. The Rise of Consumer Protection
      2. The Government’s Role
      3. Consumer Duties and Responsibilities
      4. Consumer Protection in India
      5. The Current Scenario
      6. Legal Protection to Consumers
        1. The Consumer Protection Act, 1986
        2. The Consumer Protection (Amendment) Act, 2002
        3. The Prevention of Food Adulteration Act, 1954
        4. Institutional Arrangements under Copra
      7. The Three-Tier Redressal System in India
        1. The District Forum
        2. The State Commission
        3. The National Commission
      8. Quality Standards
        1. The Bureau of Indian Standards
        2. Standards of Weights and Measures
      9. Voluntary Organizations
        1. Consumer Associations or Councils
        2. Consumer Cooperatives
        3. Coordination at the National Level
      10. Other Initiatives
        1. National Awards
        2. Publicity Measures
        3. The Customer Service Department at RBI
      11. Summary
      12. Key Words
      13. Discussion Questions
      14. Suggested Readings
    4. 26. Investor Protection
      1. Shareholders’ Rights and Responsibilities
        1. A Shareholder
        2. Rights and Postal Ballots
      2. A Guide for Investors and Shareholders
        1. Rights of a Shareholder as an Individual
        2. Rights of a Debenture Holder
        3. Shareholders’ Responsibilities
        4. Trading of Securities
        5. Transfer of Securities
      3. Depository and Dematerialization
      4. Grievance Redressal
      5. Investor Protection
        1. Definition
        2. The Need
      6. Rights to Information and Other Rights
      7. The Impact of Investor Protection
        1. Ownership and Control of Firms
        2. Development of Financial Markets
      8. Investor Protection in India
      9. Shareholder Protection in India
        1. The N. K. Mitra Committee on Investor Protection
        2. Problems of Investors in India
        3. Law Enforcement for Investor Protection
        4. Grievance Redressal Mechanisms
        5. Lacunae in Investor Protection
      10. Sebi’s Performance: A Report Card
      11. Summary
      12. Key Words
      13. Discussion Questions
      14. Suggested Readings
    5. 27. Environmental Protection
      1. The History of Environmentalism
      2. Preserving the Environment: The Role of Stakeholders
        1. Public Opinion
        2. Media
        3. Corporations
        4. Government
      3. Costs and Benefits of Environmental Regulation
      4. Trade and the Environment
      5. Industrial Pollution
        1. India’s Toxic Corridor
        2. Evidence of Pollutants
      6. Role of Corporations
      7. Improving Corporate Environmental Performance
      8. Waste Management and Pollution Control
        1. Preventing Pollution
        2. Preventing Industrial Pollution
        3. Innovative Business Practices
        4. Environmental Audit
      9. Managing Environmental Issues
      10. Improving Corporate Environmental Performance
        1. Product Differentiation
        2. Self-Regulation
        3. Government Regulation
        4. Process Innovations
        5. Redefining Markets
      11. Environmental Risk Management
      12. Environmental Management in India
      13. Charter for Voluntary Pollution Control
      14. India’s Environment Policy
        1. Laws Governing Environment
        2. The National Environmental Policy,
        3. Deficiencies in the Draft Policy
        4. Latest Developments in India’s Environment Policy
      15. Corporate India Gets Eco-Friendly
        1. Private Sector Initiatives
        2. Public Sector Efforts
      16. Future Outlook on Environment
      17. Summary
      18. Key Words
      19. Discussion Questions
      20. Suggested Readings
    6. 28. Corporate Governance in India
      1. Definitions
      2. Desiderata
      3. Good Corporate Governance
        1. Obligation to Society
        2. Obligation to Investors
        3. Obligation to Employees
        4. Obligation to Customers
        5. Managerial Obligation
      4. Issues in Corporate Governance
        1. Distinguishing the Roles of Board and Management
        2. Composition of the Board and Related Issues
        3. Separation of the Roles of the CEO and Chairperson
        4. Should the Board Have Committees?
        5. Appointments to the Board and Directors’ Re-Election
        6. Directors’ and Executives’ Remuneration
        7. Disclosure and Audit
        8. Protection of Shareholder Rights and their Expectations
        9. Dialogue with Institutional Shareholders
        10. Making a Socially Responsible Corporate-Investor’s Role
      5. Need for and Importance of Corporate Governance
      6. Good Governance and Corporate Performance
      7. Investors’ Preference
      8. Significance to Developing Countries
        1. Benefits to Society
        2. Benefits to Corporations
      9. The Indian Model
        1. History
        2. Clause
        3. Banks and Corporate Governance
        4. Establishment of the Serious Fraud Office
        5. A Performance Appraisal
        6. Performance Appraisal of Indian Corporations
        7. Impetus for the Growth of Corporate Governance in India
      10. Summary
      11. Key Words
      12. Discussion Questions
      13. Suggested Readings
    7. 29. Corporate Social Responsibility in India
      1. Conflicting Perspectives
      2. Emergence
      3. Why Social Responsibility of Business?
        1. Accountability to Society
        2. Debt to Society
      4. Definitions
        1. A Growing Global Role
      5. Theoretical Justification for Csr
        1. The Trusteeship Model
        2. The Social Entity Theory
        3. The Pluralistic Model
      6. What are Corporates Expected To Do?
      7. Private Sector Needs the Goodwill of Society
      8. Models for Implementing Csr
      9. Csr as a Business Strategy for Sustainable Development
      10. Assessment of Csr Activity
      11. Inadequate Response to Csr in India
      12. Advantages
      13. Scope
      14. Different Contexts in which Csr is Related
        1. Protecting and Promoting Stakeholders’ Interests
        2. Social Concern and Promotion of Common Welfare Programmes
        3. As an Act of Philanthropy
        4. Good Corporate Governance itself is a Social Responsibility
        5. Corporates in the Vanguard of Rendering Social Service
        6. Social Responsibility is Abiding by Rules and Regulations
        7. Social Responsibility as the Creation of Wealth
        8. Ensuring Ecological Balance
        9. Human Element Focus
        10. Improving Productivity
        11. Sponsoring Social and Charitable Causes
        12. Corporates Should Supplement State Efforts
      15. Icc’s Practical Steps to Csr
      16. The Indian Perspective
      17. Changing Attitudes to Csr
      18. India on the Ethical/Csr Matrix
      19. Social Responsibility and Indian Corporations: A Score Card
      20. The Future of Indian Csr
      21. Summary
      22. Key Words
      23. Discussion Questions
      24. Suggested Readings
    8. 30. Business Ethics in India
      1. Principles of Ethics
        1. Personal Ethics
        2. Professional Ethics
        3. Business Ethics
      2. What is not Business Ethics?
      3. Evolution
      4. Need
      5. Significance
      6. Values and Ethics in Business
        1. The Importance of Values and Ethics
        2. The Distinction between Values and Ethics
        3. Values, Ethics and Business Strategy
        4. Why Should Businesses Act Ethically?
        5. Ethical Decision Making
      7. Ethical Challenges in the Changing Business Environment
        1. Benefits of Managing Ethics in the Workplace
        2. Characteristics of an Ethical Organization
        3. Recognizing Ethical Organizations
      8. Summary
      9. Key Words
      10. Discussion Questions
      11. Suggested Readings
  11. Part V - Economic Legislations
    1. 31. The Mrtp and the Competition Acts
      1. The Mrtp Act, 1969
        1. Objectives
        2. Salient Features
        3. Scope
        4. Post-Liberalization Relaxations
        5. The 1991 Industrial Policy Takes the Sting out of the Mrtp Act
      2. The Regulation of Competition
      3. Corporate Control in Competition
        1. Constraints in Developing Countries
        2. The Role of Banks
        3. Ownership Concentration
      4. The Benefits of Competition
        1. Competition in the Product Market
        2. Competition in the Capital Market
        3. Encouraging Good Governance
        4. Competition is Only Part of the Solution
        5. Enforcement of Good Governance
      5. Challenges to Good Enforcement
      6. What is a Good Competition Policy?
      7. The Competition Act, 2002
        1. Background
        2. Objectives
        3. The Competition Commission of India
        4. The Focus Areas of the Competition Act
        5. Salient Features of the Competition Commission
      8. Mrtp Act and the Competition Act
      9. Implementation
      10. Summary
      11. Key Words
      12. Discussion Questions
      13. Suggested Readings
    2. 32. Fera and Fema
      1. The Foreign Exchange Regulation Act, 1973
        1. Objectives
        2. Restrictive Provisions
        3. Provisions Relating to Enforcement, Penalty and Prosecution
        4. Draconian Nature, Content and Reach
      2. The Foreign Exchange Management Act, 1999
        1. Objectives
        2. Administration
        3. Provisions
        4. Contravention and Penalties
        5. Investigation
        6. Functions of the Directorate of Enforcement
        7. Procedural Provisions of Fema
        8. Adjudication and Appeals
        9. Appeals against Orders Passed under Fera
        10. Decision of the Bombay High Court Relating to Fera
      3. Summary
      4. Key Words
      5. Discussion Questions
      6. Suggested Readings
    3. 33. The Industries (Development and Regulation) Act
      1. Objectives
      2. Idra’s Implementing Authority
        1. The Central Advisory Council
        2. The Development Council
        3. The Government to Issue Licences
        4. The Government’s Power to Investigate
        5. The Government’s Power to Issue Directions
      3. Licensing under the New Policy
      4. Summary
      5. Key Words
      6. Discussion Questions
      7. Suggested Readings
  12. Part VI - The Industrial Sector
    1. 34. The Private Sector
      1. The Phenomenal Growth of the Private Sector
      2. Role of the Government
      3. Importance
      4. Increased Investment following Liberalization
      5. Comparative Performance of the Public and the Private Sectors
      6. Sectoral Growth in the Private Sector
        1. Manufacturing
        2. Services
        3. Banking and Insurance
        4. Transport
        5. Community and Social Services
      7. Private Sector and Socio-Economic Development
      8. Growth of Private Sector Corporate Giants
      9. Private Sector Caused the Growth of Modern Industry
      10. Problems Faced by the Private Sector
      11. Lack of Corporate Governance in the Private Sector
      12. Summary
      13. Key Words
      14. Discussion Questions
      15. Suggested Readings
    2. 35. The Public Sector in India
      1. Objectives
      2. Rationale for its Existence
      3. Growth
      4. Organization
      5. Control
        1. Committee on Public Undertakings
        2. Bureau of Public Enterprises
      6. Policies since 1991
        1. De-Reservations
        2. Policy regarding Sick Units
        3. Memorandum of Understanding
        4. “Navaratnas” among Psus
        5. Disinvestment of Shares
        6. Under-Pricing of Shares
        7. Squandering Away Assets to Finance Deficits
      7. Central Public Sector Enterprises
      8. Achievements
      9. Causes of Poor Performance
      10. Summary
      11. Key Words
      12. Discussion Questions
      13. Suggested Readings
    3. 36. Privatization of Public Sector Enterprises
      1. What is Privatization?
      2. The Rationale
      3. Primary Objectives
      4. Other Expected Benefits
      5. Methods of Privatization in India
      6. The Rangarajan Committee
      7. Disinvestment in the Public Sector
        1. Establishment of the National Investment Fund
        2. The Disinvestment Commission
        3. The Department of Disinvestment
        4. The Method and Mechanism of Disinvestment
        5. Strong Advocacy of Disinvestment in Economic Survey 2009–10
        6. Problems Associated with Disinvestment
      8. Summary
      9. Key Words
      10. Discussion Questions
      11. Suggested Readings
    4. 37. The Joint Sector
      1. The Proponents and Opponents of the Joint Sector
        1. The Tata Memorandum on Industrial Growth
        2. Industrial Policy Resolution, 1956
        3. The Industrial Licensing Policy Inquiry Committee, 1969
      2. Rationale
      3. Objectives
      4. Forms and Options
      5. Types
      6. The Evolution of Indian Jses
      7. Joint Sector with Foreign Collaboration
      8. The Joint Sector: An Evaluation
      9. Summary
      10. Key Words
      11. Discussion Questions
      12. Suggested Readings
    5. 38. Globalization, Mncs and Foreign Capital in India
      1. Factors Facilitating Globalization
      2. Mncs and Globalization
      3. Doing Business in a Diverse World
      4. Multinational Corporations
      5. Issues Relating to Mncs
      6. Advantages of Mncs
      7. Disadvantages
      8. Regulation of Mncs
      9. Mncs in India
      10. Foreign Capital
      11. Kinds of Foreign Capital
      12. Distinction between Fdi and Fii
      13. Foreign Aid
      14. Response of Foreign Capital
      15. Other Kinds of Foreign Investments
        1. Nri Investments
        2. Global Depository Receipts
        3. American Depository Receipts
        4. Foreign Currency Convertible Bonds (Fccb)
      16. India’s Policy towards Foreign Capital
      17. Establishment of the Investment Commission
      18. Disadvantages of Foreign Capital
      19. Summary
      20. Key Words
      21. Discussion Questions
      22. Suggested Readings
    6. 39. India and Intellectual Property Rights
      1. Intellectual Property
        1. The Indian Government’s Initiatives
        2. The Legislative Framework
        3. The Indian Patent System
        4. The Justice Bakshi Tek Chand Committee
        5. The Justice N. Rajagopala Ayyangar Committee
        6. Patent Rules
      2. Trademarks
        1. Evolution
        2. Role
        3. Trademarks Legislations
        4. Salient Features of Indian Trademark Act, 1999
        5. Registration of Trademarks
        6. Infringement
        7. Offences and Penalties
      3. Copyright Acts
        1. Other Iprs
      4. Summary
      5. Key Words
      6. Discussion Questions
      7. Suggested Readings
  13. Part VII - Financial Systems
    1. 40. Money: Functions and Value
      1. Evolution
        1. Animal Money
        2. Commodity Money
        3. Metallic Money
        4. Paper Money
        5. Credit Money
      2. Functions
        1. Primary Functions
        2. Secondary Functions
        3. Contingent Functions
        4. Qualities of Good Money
      3. Systems of Note Issue
      4. Kinds of Money
        1. Legal Tender
        2. Standard Money and Token Money
      5. Gresham’s Law
      6. The Value of Money
        1. Meaning
        2. The Demand for Money
        3. Supply of Money
        4. Currency
        5. Demand Deposits
      7. The Changing Value of Money: The Quantity Theory
        1. Assumptions
        2. Criticism
      8. Measuring Changes in the Value of Money: Index Numbers
        1. Definition
        2. Method of Construction
        3. Weighted Index Numbers
        4. Difficulties in the Construction
        5. Advantages
        6. Limitations
      9. The Changing Value of Money: Inflation and Deflation
        1. Inflation
        2. Deflation
        3. Inflation versus Deflation
      10. Summary
      11. Key Words
      12. Discussion Questions
      13. Suggested Readings
    2. 41. Money Markets
      1. What is a Money Market?
        1. Characteristics of Money Market Instruments
        2. Objectives
      2. Money Markets versus Capital Markets
      3. Financial Instruments
        1. Money Market Instruments
        2. Interbank Call Markets
        3. Treasury Bills
        4. Certificates of Deposit
        5. Commercial Papers
        6. Repo Markets
        7. Term Money Markets
        8. Commercial Bill Markets
        9. Money Market Mutual Funds
      4. The Indian Money Market: Structure
      5. The Indian Money Market: Characteristics
      6. Functions of a Money Market
      7. Summary
      8. Key Words
      9. Discussion Questions
      10. Suggested Readings
    3. 42. Commercial Banking
      1. What is a Commercial Bank?
      2. Functions
      3. Importance
      4. Investment Policies
        1. Liabilities
      5. Commercial Banking: A Process of Credit Creation
      6. Credit Creation
      7. Technique
        1. Limitations
      8. Indian Commercial Banks: Evolution
      9. Indian Banking since Nationalization
      10. The Current Situation
      11. Indian Banking: Challenges
      12. Strategic Options to Cope with the Challenges
      13. Summary
      14. Key Words
      15. Discussion Questions
      16. Suggested Readings
    4. 43. Functions of the Central Bank
      1. Organization and Management
      2. The Government’s Bank
        1. Bank of Issue
        2. Custodian of National Reserves
        3. As a Banker, Agent and Advisor to the Government
        4. Miscellaneous Functions
      3. The Bankers’ Bank
        1. Supervisor of Banks
        2. The Lender of Last Resort
        3. The Custodian of Member Banks’ Cash Reserves
        4. The Bank of Central Clearance, Settlement and Transfers
      4. The Controller of Credit
        1. Quantitative Weapons
        2. Selective Credit Control
      5. Summary
      6. Key Words
      7. Discussion Questions
      8. Suggested Readings
    5. 44. Financial Institutions
      1. Development Banks
        1. Meaning
        2. Salient Features
      2. The Need for Financial Institutions
        1. The Industrial Finance Corporation of India
        2. The Industrial Credit and Investment Corporation of India
        3. The Industrial Development Bank of India
        4. The Industrial Investment Bank of India
        5. The Small Industries Development Bank of India
        6. State Financial Corporations
        7. State Industrial Development Corporations
        8. The National Small Industries Corporation
        9. State Small Industries Development Corporations
      3. Evaluation of the Role of Financial Institutions
      4. Summary
      5. Key Words
      6. Discussion Questions
      7. Suggested Readings
    6. 45. The Indian Capital Market
      1. The Capital Market
      2. Constituents
        1. The Primary Market
        2. The Secondary Market
        3. Debt Market
      3. Nature
      4. Development
      5. Deficiencies
      6. Impact of Globalization
      7. Role of Securities Market in Economic Growth
      8. Regulatory Framework of the Indian Capital Market
      9. Summary
      10. Key Words
      11. Discussion Questions
      12. Suggested Readings
    7. 46. The Indian Stock Market
      1. Definition
      2. Origin in India
      3. Organization and Members
      4. Functions
      5. Evolution
        1. Traditional Stock Exchanges
        2. New Types of Stock Exchanges
      6. Growth
      7. What are Sensex and Nifty?
        1. Sensex
        2. Nifty
      8. Services Rendered by Stock Exchanges
      9. Listing of Securities
        1. Advantages of Listing
      10. Regulations and Control
      11. The Securities and Exchange Board of India
      12. Summary
      13. Key Words
      14. Discussion Questions
      15. Suggested Readings
    8. 47. The Securities and Exchange Board of India
      1. The Indian Securities Market before Sebi
      2. The Securities and Exchange Board of India Act, 1992
      3. Objectives and Functions
        1. Powers
        2. Organization
        3. Strengthening of Sebi
        4. The Sebi (Amendment) Bill, 2002
      4. Sebi’s Role in Promoting Corporate Governance
      5. Performance Record
      6. Sebi’s Role in the New Era
        1. Primary Market Reforms
        2. Secondary Market Reforms
      7. Shortcomings
        1. The Dhanuka Committee
        2. Suggestions for Sebi’s Improvement
      8. Summary
      9. Key Words
      10. Discussion Questions
      11. Suggested Readings
  14. Part VIII - The External Sector
    1. 48. India and the Wto
      1. Emergence
        1. Gatt: Wto’s Predecessor
        2. The Formation of Unctad
        3. The Distinction between Wto and Gatt
      2. Objectives
      3. Core Principles
      4. Functions
      5. Organizational Structure
      6. Ministerial Conferences
        1. The First Ministerial Conference (Singapore, 1996)
        2. The Second Ministerial Conference (Geneva, 1998)
        3. The Third Ministerial Conference (Seattle, 1999)
        4. The Fourth Ministerial Conference (Doha, 2001)
        5. India’s Negotiating the Doha round
        6. The Fifth Ministerial Conference (Cancun, 2003)
        7. The Sixth Ministerial Conference (Hong Kong, 2005)
        8. The Seventh Ministerial Conference (Geneva, 2009)
      7. The Dispute Settlement Mechanism
        1. The Differences between Gatt and Wto in Settling Disputes
        2. The Performance of Dsb in Setting Disputes
      8. Wto Agreements
        1. The Agreement on Agriculture
        2. The Agreement on Textiles and Clothing
        3. The Agreement on Market Access
        4. The Agreement on Trade-Related Investment Measures
        5. The Agreement on Trade-Related Aspects of Intellectual Property Rights
        6. The General Agreement on Trade in Services
        7. The Agreement on Technical Barriers to Trade
        8. Plurilateral Trade Agreements
        9. The Agreement on Anti-Dumping
      9. The Trade Policy Review Mechanism
      10. Wto and the Mfn Clause
      11. The Wto, the Imf and the World Bank
      12. The Wto and Developing Countries
      13. The Wto and India
      14. Evaluation of the Wto
        1. Implementation Issues
        2. Benefits
        3. Criticisms
      15. Summary
      16. Key Words
      17. Discussion Questions
      18. Suggested Readings
    2. 49. The World Bank Group
      1. Genesis
      2. A Brief History
      3. Focus
      4. Functions
      5. The World Bank Group
      6. Functions Performed by the World Bank and its Affiliates
        1. The International Bank for Reconstruction and Development
        2. The International Development Association
        3. The International Finance Corporation
        4. The Multilateral Investment Guarantee Agency
        5. The International Centre for Settlement of Investment Dispute
      7. Membership in the World Bank
      8. Funding Operations
      9. Loans, Grants and Services
        1. Loans
        2. Grants
        3. Other Services
      10. Lending Policies
        1. Guiding Principles
        2. Recent Trends
        3. Special Action Programme
        4. Bank Loan and Export Credit
        5. Future Lending Strategy
      11. Five Essential Factors for Development Identified by World Bank
      12. Comprehensive Development Framework
      13. Poverty Reduction Strategies
      14. The Millennium Development Goals
      15. Imf-World Bank’s Work: Developed versus Poor Countries
      16. Criticism
      17. World Bank Support to India
        1. Education
        2. Healthcare
        3. Energy
        4. Infrastructure
        5. Agriculture
      18. Summary
      19. Key Words
      20. Discussion Questions
      21. Suggested Readings
    3. 50. The International Monetary Fund
      1. Origin
      2. Objectives
      3. Membership
        1. The Members’ Quota
        2. Special Drawing Rights (Sdr)
      4. The Bretton Woods System
      5. Gold Stocks with the Imf
      6. Borrowing Agreements
      7. Governance
      8. Organizational Structure
        1. Board of Governors
        2. Ministerial Committees
        3. The Executive Board
      9. Evolution
        1. The Bretton Woods System
        2. The Collapse of the Bretton Woods System
        3. The Impact of the Second Amendment
      10. Structural Adjustment Programmes
      11. Accountability
      12. Criticisms
      13. The India-Imf Relationship
      14. Summary
      15. Key Words
      16. Discussion Questions
      17. Suggested Readings
  15. Notes
    1. Chapter 1
    2. Chapter 2
    3. Chapter 3
    4. Chapter 4
    5. Chapter 5
    6. Chapter 6
    7. Chapter 7
    8. Chapter 8
    9. Chapter 9
    10. Chapter 10
    11. Chapter 11
    12. Chapter 12
    13. Chapter 13
    14. Chapter 14
    15. Chapter 15
    16. Chapter 16
    17. Chapter 17
    18. Chapter 18
    19. Chapter 19
    20. Chapter 22
    21. Chapter 23
    22. Chapter 24
    23. Chapter 25
    24. Chapter 26
    25. Chapter 27
    26. Chapter 28
    27. Chapter 29
    28. Chapter 30
    29. Chapter 31
    30. Chapter 32
    31. Chapter 33
    32. Chapter 34
    33. Chapter 35
    34. Chapter 36
    35. Chapter 37
    36. Chapter 38
    37. Chapter 39
    38. Chapter 40
    39. Chapter 41
    40. Chapter 42
    41. Chapter 43
    42. Chapter 44
    43. Chapter 45
    44. Chapter 46
    45. Chapter 47
    46. Chapter 48
    47. Chapter 49
    48. Chapter 50
  16. Acknowledgements
  17. Copyright

Product information

  • Title: Business Environment
  • Author(s): A. C. Fernando
  • Release date: January 2011
  • Publisher(s): Pearson India
  • ISBN: 9788131731581