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    1 : Presentation on: Nature, Scope and Objectives Of the Business environment Presented By: Bhavesh M. Pipaliya
    2 : What is Business? According to the Chambers Dictionary, the word business means employment, trade, profession, or occupation, a task, commercial activity, a industial concern, etc. All economics activities related to production and exchange of goods or services for money or economic return.
    3 : Business System/Process Business Enterprise Organization of Factors of Production Processing Logistics Marketing of Output
    4 : Business Sectors There are two main sectors, 1. Industrial sector and 2. Services sector. Industrial Sector Manufacturing activities, generation of electricity and Construction. Services sector Insurance, professions, transport, repairs, maintenance. The contribution o this sector to GDP is more than 60% in developed economies and nearly 50% in developing economies.
    5 : Classification of Business 1. Businesses Which produce Goods There are two categories of goods 1. Commodities , 2. Product Commodities are good produced by the primary sectors, i.e. agriculture, mining. Products are good produced by Secondary sectors, i.e. manufacturing . Importance types of enterprises 1. Farms, dairies, and other agricultural producers. 2. Mines, fisheries, lumbering enterprise and other extract natural resources. 3. Manufacturing enterprises.
    6 : Cont… 2. Businesses Which Produced Services Transportation enterprises Telephone companies Producers of Electric light and power Hotels, restaurant and other producers of services of food IT services, entertainment services etc… 3. Businesses Which Distribute Goods Wholesale merchant of various types retail merchant of various types Importer and Exporter
    7 : Cont… 4. Businesses Which Facilitate Distribution Goods Warehouse and other storage businesses Auction houses, exchange and other enterprises which afford places of trade Transportation Firms Advertising Firms 5. Businesses Which Deal in Finance and Financial services Commercial Banks, Cooperative banks and indigenous bank Development Banks Merchant banks other Financial services firms Stock exchange
    8 : Classification of Industries Classification Based On The Nature Of Activity 1. Extractive Industries 2. Genetic Industries 3. Manufacturing Industries 4. Construction Industries 5. Service Industries 6. IT Industries
    9 : Classification Based on Competitive Structure 1. Monopoly Monopoly is a market situation characterized by a single-firm of industry. ex. Indian Railway The Monopolies and Restrictive Trade Practices (MRTP) Act was major law to Control monopoly Power in India. The MRTP Act was replaced by the Competition Act . 2. Duopoly Duopoly is an Industry or Competitive situation characterized by only two Firms (i.e. sellers). ex. The caprolactum Industry in India was characterized by duopoly Situation.
    10 : Cont… 3. Oligopoly If an Industry Consists of only a Few Firms it is Known as Oligopoly. Two forms of Oligopoly can be Distinguished- perfect Oligopoly where the Product is homogenous and imperfect oligopoly when some degree of differentiation exist between the product of different firms. Collusive pricing-price relationship 4. Monopolistic Competition Monopolistic Competition is characterized by the existence of a large number of firms selling products which are close , but not perfect, substitutes. Product is different ex. Textile Industry
    11 : Cont… 5. Perfect Competition There are large number of firms selling homogeneous products and no single firm has any control over the market. A firm earns only normal profits.
    12 : Sized-Based Classification Small scale Industry Medium scale Industry Large scale Industry
    13 : Used-Based Classification 1. Basic Industries Basic Industries are those industries which provide essential input for the development of other industries and the economy. ex., Mining, Fertilizers, Heavy inorganic chemicals, cement, Iron and Basic industries metals, Electricity. 2. Capital Goods Industries Capital Goods Industries are those industries which Produce Machinery, equipment or tools. ex. ,Hand tools & small tools, Specialized equipment , Machinery tools, Agricultural machinery, heavy Electric cable and wires, Rail equipment, Heavy vehicals.
    14 : Cont… 3. Intermediate Goods Intermediate goods are goods which have already undergone manufacturing process but which form input for other industries as materials for further processing parts or component. ex. Cotton Spinning, Jute textiles, Tires and tubes, Man-made fibers, Plastics and synthetics resins, Products of petroleum and Coal, Bolts, nuts, nails, screws, springs, chains, Manufacture of metal. 4. Consumer Goods Industries Consumer goods industries are those industries the output of which serve the final consumption requirement. A. Consumer Durable goods Electric fans, telecommunication equipment, Motor cycle, bicycles.
    15 : Cont… B. Consumer Non- Durable goods Food manufacturing, Tobacco manufacturing, cotton weaving, paper and paper product, Rubber foot-wear, Drugs and pharmaceuticals, soaps and glycerin, Electrics lamps. Input based classification agro-based , forest-based, marine-based, metal-based, chemical-based etc. Proprietary-based classification Ownership, public sectors, private sectors, Joint and co-operatives sectors.
    16 : Characteristics of Business Exchange of Goods or Services for Income Business Invariably involves the exchange of goods or services for income by money payments. The buyers must get or at least except to get some satisfaction to make them buy the goods or services. Recurring Activities The activities of business enterprise are normally recurring in nature and it operate more or less continuously. Profit Motive This naturally influences the choice of products, market segments, technology, plant-size, pricing strategy etc.. Risks Business involves some risks. High risks high reward.
    17 : Dynamics of Modern Business Several characteristics of modern business. Strategies Orientation Global Orientation Professionalization Strategies operations Management
    18 : Cont… Technology Overlaps and Integrated systems Restructuring Focus and Diversification Coexistence of Different Sectors Fast change segmantation
    19 : Goal of Business FOMULATION ACHIEVEMENT Mission Objectives Goals Targets
    20 : Conti… Vision/Mission Vision Means your perception towards your long-term goals. Mission Means your objective toward your Business. As Drucker suggests three fundamental questions would help to clearly define the business and formulate/reformulate the mission. What is our business? What will our business be ? What should our business be?
    21 : Objectives, Goals & Targets Objective is long-term process. Objectives help to the organization to justify it’s existence and environment. Goal is define as, “ an intermediate result to be achieved by a certain time as part of the grand plan. Goal should be stated in terms of management, marketing, financial, production and research and development accomplishment.
    22 : Importance of objectives 1. Justify the organization 2. Provide Direction 3. Basis for management by objectives 4. help the strategic planning/ management 5. help in coordination 6. provide standards for assessment and control 7. help in decentralization
    23 : Guidelines for Ideal objectives 1. Participation 2. Clarity 3.Realism 4. Flexibility 5.Consistency 6.Ranking 7. Verifiability 8. Balance
    24 : Factors of Affecting objectives 1. Force in environment 2.Internal Force 3. The value system of top executives
    25 : Classification of objectives 1. Economic objectives Survival Return on investment Growth Innovation Market share 2. Social objectives objectives which protect consumer interests objectives which protect the interests of workers objectives which protect the interests of society
    26 : Cont… 3. Primary & secondary objectives George Goyder in his well known book the future of private enterprise : A study in responsibility set out the ultimate objects in his following four principle objects. 1. The existence, development and improvement of the company’s business and the building up of it financial independence. 2. The payments of fair and regular dividends to the shareholders. 3. The payments of fair wages under the best possible conditions to the workers. 4. The reduction of prices to consumers. Referring to the articles of the Carl Zeiss Foundation, Goyder point out four secondary objectives. 1. To provide bonus for workers, 2. To assist in promoting the amenities of the locality . 3. To assist in developing the industry of which the firm is the member. 4. To promote the education, research and development in the techniques of the industry .
    27 : Conti… 4. Short-run and long-run objectives. The short run objectives may be to achieve long-run objectives. A company will normally pursue the secondary objectives listed therein as long-run objectives. 5. Top-down and Bottom-Up Approaches The upper level managers determine the objectives for their subordinates . In bottom-up approaches, the subordinates initiate the setting up of objectives for their position and present them to the superior for consideration.
    28 : Thank You
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