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Business and Government Lecture -1

What is Business?

Any Economic activity carried on with the object of earning a return on income i.e. profit is called business

Characteristics
-Dealing in goods and services
-Production and/or exchange
-Regularity of transaction
-Profit Motive
-Element of risk

Risk

-Risk arises out of uncertainty
-Uncertainty takes place because of
Changes in technology
Changes in consumer tastes, habits and fashions
Shortage of raw materials, power, fuel etc
Change in market competition
Wrong management decision with regard to management control and other resources
Changes in socio-economic-political condition
Natural Calamity

Risk & Uncertainity
-Key to turning poor countries into rich ones
-Creating public institutions having ability to convert uncertainty into risk
-Uncertainty is imprecise knowledge about potential future events
-Risk is uncertainty that can be systematically assessed---- I.e.
measured
priced ----- and, most important…
shared (Capital & Collusion by Hilton Root)

Environment
-Environment is the framework within which business operation takes place
-Two broad heads
Indogenous environment is the firm or unit specific
Exogenous environment are external factors which influence the operation of business

Exogenous Environment
Exogenous factors could be further classified into
-Domestic
-Political
-Economic
-International

Business and Government Lecture -1(contd)

Finally

Business and society cannot be separated. Business is dependent on society for its existence. It must satisfy societal needs both economic and social

BUSINESS AND GOVERNMENT – AN OVERVIEW

Business : An Economic Activity
Economic Activity : Provider Taker value for both value expressed / measured through price in monetary term.
Economic Activity is driven by Society



Society is driven by :
• Technology
• Innovation
• Change
Examples :
CONNECTIVITY –
Ship – Improvements through Technology
Rail -
Automobile –
AIR –
Satellite –
Computer –
Telecom – Mobile – Broad banding
NANO

Innovation : Application in commercial use
Container –

Change : Taste / Attitude
Polson – Amul

Stale Cream to Fresh Cream
Salt and Colour – Yellowish
Society determines Governance pattern
( Constitution )

Outcome of Technology
World has come closer – Global Village
Economic activity has changed from local / Regional / National to Global
Economic activity governed by
Efficiency
Competition


Convergence of Business And Government
But In India, Government has an added responsibility
Welfare Society


Laissez Faire versus Government control

Marketing Economy versus Command Economy
Capitalism versus Socialism

INDIA PERSPECTIVE
•1947 Independence
•1951 Planning
•1956 Industrial Policy Statement
•1969-1974 Move towards Socialism /
Internal Emergency
•1977 Change in Power Structure
•1984-1990 Economic downturn
•1991 Process of reform / Liberalisation / Globalisation / Privatisation
•1999- First Coaliation Government – NDA
•2004- Coaliation Government UPA
Common minimum programme

Within overall Policy of Liberalization ideological stand takes a major role
Retail
SEZ
FDI Holding
Public Sector

Conclusion :
To operate in a corporate setup. General understanding of operation of Economic and Political forces in required.

leadership-part6

Path Goal Approach

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leadership-part4