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Business environment

syllabus

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objective

To understand the business scene and

factors and trends for strategic policy

formulation

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topics

Social issues

Political issues

Ecological issues

Business ethics

Social responsibility

Energy management

Family V/sprofessional business

management

Industrial units

Joint ventures

Technology transfer

Multi-national

corporations

Administered pricing

Business resources Economic trends

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Books and references

Business envirnment text & cases Justin Paul/ McGrow-Hill publisher

Indian Economy Mishra and puri

Business environment Francis Cherunilum

Business environment Ashwathappa

Case studies: Collections from:

Books, news papers, magazines, net.

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Allocation of marks

External exam : 60 marks (100)

Internal assignment : 40 marks

Internal assignment:1. Project: 10

2. Presentation: 10

3. Attendence: 10

4. GD/ Presentation: 10

total 40

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Political environment and

economic thought

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Every country in the world has an

economic system to facilitate the

production, trade and consumption of

goods.

Countries across the world have evolved

through different ideologies to follow a mix

of different thoughts.

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History of economic thoughts and

economic systems Term economics coined in around 1870

Popularized by Alfred Marshall

As a substitute for political economy. The major thinkers were:

Adam Smith.

David Ricardo.

Karl Marks.

History can be divided into 2 phases: Pre-modern

Was popular among Greeks, Roman, Medieval Arabs, .

Modern

Thought developed by Adam Smith.

Systematic economic theory got its shape.

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Pre- modern economic thought

Ancient scientists made several observations andcontributions.

Economics can be applied to any type of organisation.

Economic theory centers around system of exchange,

trading, buying and selling. Focus on capitalistic societies.

Money has a rational basis and profit is derived fromutilising labour and capital to produce goods for trade.

Economist felt that the framework of economics isrelevant and stretch enough to apply to any form of th4esociety.

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Modern economic thought

Work of this period is called as classical economics.

Adam Smith , founder of economic theory, wealth ofnations, in 1776.

Even today his work is gospel in market economics.

His study a center piece of capitalism.

Marxist economics not held high, but used in somemainstreams.

19th century saw marginal revolution or neo classical

theories. Focuses on concepts of marginalism and opportunity cost.

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Market economya basis for several right wing systems such as

capitalism Economic system operates in a free market and is not

planned or controlled by central authority.

It is theoretically possible (because it excludes taxationand regulations of any kind)

Called as free economy or free enterprise system Government intervention is possible

Difference in market and planned economy is-

How govt influence is used and not degree of governmentinfluence.

If govt wants more steel, it collects more taxes to buy steel atmarket price.

In planned economy government order for more steel production.

Ex: US and Canada.

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Planned or command economya basis for left wing system such as

communism

This system refers to the theory politicaland economic development proposed byKarl Marx and developed and

implemented by V.I. Lenin. Communism, people rule both politically

and economically.

According to Marx, the govt is instrumentof class oppression, and the society whichemerges in its final stage is classless.

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It is totalitarian system of govt in which singleauthoritarian party controls means of productionwith professed aim of establishing a society withequal rights.

A system in which the means of production areown and operated for the public by thegovernment.

Government determines type, quality, quantity

and price of the goods produced. Communism promises to provide for everyone'sneed and to have no social class. Ex: cuba, Vietnam

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Economic growth and development

Focus on analysis of factors and policies thatdrive growth and social development andpoverty alleviation.

Policies for growth:

International trade Financial markets

Health

Education

Public infrastructure Increase in national income is first step of

economic growth of a country.

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Economic development: An activity that assist in in the inducement of commercial and

social endeavors.

Process stimulates self sustaining economic processes, createsjobs at acceptable wages, produce goods and services to meetthe social needs.

It provides resources needed to make further investment ineducation, govt services, amenities ,infra and quality of life.

ED can be measured in

Human development index

Gender empower measure Human poverty index

Human freedom index.

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GDP- basic measure of national output and

economic growth.

GDP is the value of all final goods and services

produces within the countrys geography,irrespective of its ownership of resources.

All values valued at the market price and money

values are added together to get GDP.

GDP per capita is GDP/Population.

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GNP- is income produced through

countrys owned resources, irrespective of

place of production.

GNP is calculated by adding factor

payments (receipts) from abroad to GDP.

GDP=GNP- NFIA (NET FACTOR INCOME FROMABROAD)

NDP = GDP- depreciation ( net domestic product)

Capital is used to yield output, it wears out or depreciates.

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The national income measurement is carried

out on the market prices and at a factor cost.

GNP at market prices- indirect taxes+ subsidies=GNP at factor cost

GNP at factor cost-net factor income from abroad= GDP at factor cost

GNP at factor cost

depreciation( capital consumption)= NNP at FC

GDP at FC depreciation = NDP at FC

Economic growth of country is measured in: % growth ofnational income. Per capita income is good indicator

Economic growth= rise in total output Growth can occure in_

Increased use of land labour, capital and resources

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Difference between growth and

development

Growth Development

Uni-dimentional

Income based

economy

Multi-dimentional

Standard of living based

society

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MEASUING DEVELOPMENT

Human evelopment index: Devised by united nations development programme

to measure economic growth and social development.

Social & economic factors

Standard of living

Life expectancy Literacy and inequalities in income distribution

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Human development index: Takes into account 3 major factors

Life expectancy at birth

Levels of educatonal attainment

Gross domestic product per capita

HDI scorres from 0 to 1

Human development is the process of

enlarging peoples choices

Three essential choices1. Long and healthy life

2. Acquire knowledge

3. To have access to resources for decent standard of living

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GDP GROWTH IN india

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012345

6789 PERCENTAGE

PERCENTAGE

Linear(PERCENTAGE)