aProposed Syllabus MGT 102 ECONOMIC ENVIRONMENT OF BUSINESS (Credits 2+0)

COURSE OBJECTIVES: This course has been brought out to make the participants understand the macro environment in which businesses operate and to develop a broad understanding of all issues pertaining to economic environment of business. COURSE CONTENTS SECTION I 1. BUSINESS AND ITS ENVIRONMENT

Nature of Modern Business in changing business environment Introductionmeaning and nature of business environment- Business under the limited role of the state, increasing role of the state and business activities. Technology development contributing to business environment- changing reform in economic sector leading to improvement in economic environment. Micro and Macro Environment of Business: Micro factors affecting- workers, unions, suppliers, publics, customers, marketing intermediaries, competitors. Macro environment Economic Environment, Social-cultural Environment, PoliticalLegal Environment, Technological Environment, & Natural environment. Environment Scanning and Analysis: Meaning, process of environment scanning, Techniques of scanning Business environment, Environmental Analysis- strength, weakness, opportunities and threat analysis (SWOT analysis). MACRO BUSINESS ENVIRONMENT

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SECTION II 1. 2.

Globalization - Meaning and definition, Need and importance, Impact on Indian Economy. Foreign investment and Multinational Corporations Need for foreign capital, types of foreign capital / investment FDI, Foreign collaboration, Investment by FIIs, loans from IBRD, ADB, IMF, IDA, External commercial borrowings - US EXIM Bank, Japanese EXIM Bank, ECGC of UK. Multinational Corporations - Foreign investment policy of 1991 salient features, application of MRTP Act, FEMA, FDI in different sectors, Takeovers and foreign collaborations ICI (UK) takeover of Asian Paints, Hindustan Lever take over of TOMCO, Whirlpool, take over TVS Whirlpool, SUZUKI acquired Maruti Udyog, Bauch and Lomb increasing share in Indian venture to 69%.

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SECTION III 1.

THEORETICAL ASPECT OF BUSINESS ENVIRONMENT

Economic Systems - Capitalism, Socialism and Mixed Economies their merits, demerits and impact on employment generation and poverty eradication.

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Economic Fluctuations - Meaning and definition, phases of fluctuations prosperity, recession, depression and revival, measures to control fluctuations Fiscal Measures public revenue, public expenditure, Public borrowing and Financial administration. Direct Physical control Measures - Public distribution system, Fair price shops, rationing of essentials, control of black marketing and hoardings. 3. Economic Planning and Controls - Achievements and failures of Economic Planning, Elementary Five year plan (2007-12) objectives, controls fiscal, monetary, industrial, Foreign trade etc. 4. Factors in Economic Development Various resources (Natural, Physical, human, financial resources capital formulation, Advancement of technology, Attitude of the people, Awareness of the public

SECTION IV 1.

BUSINESS AND GOVERNMENT - INDIAN PERSPECTIVE

Contemporary fiscal and monetary policy Fiscal Policy - Meaning and definition, objectives generation of employment, Mitigating Inequalities of income and wealth, Economic development, mobilization of saving and capital formation Instruments public Revenue - Tax revenue, nonTax Revenue, Public Expenditure Development and Non-Development, public borrowings internal and external, Financial administration, Recent trends in Fiscal policy. Monetary Policy - Meaning and definition, objectives Price stability, Exchange rate stability, neutrality of Money, Economic development, Employment generation, Instruments Bank Rate, CRR, SLR, Repo rate , Change in Margins, rationing of credit, differential rate of interest, Recent trends. Industrial Policy Meaning and definition, objectives. Different Industrial policies 1948, 1956, 1991 and recent trends and limitations EXIM Policy - Need and Importance, EXIM Policy Recent trends and interact on composition, direction and volume of trade. Economic Reforms - First generation reforms 1991-2001 - Financial sector reforms, Banking sector reforms, policy of disinvestment of public sector enterprises, impact on Indian Economy. FINANCIAL ENVIRONMENT OF BUSINESS

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SECTION V 1.

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Indian Money Market: Meaning and definition components of Money Market organized and unorganized, salient features of Indian Money market, Remedial measures to make it more effective. Capital Markets: Meaning and definition, components of capital market Primary market (New issue market) - Secondary Market working of capital market, limitations of capital market. Stock Exchanges - Working of stock exchanges various parties bears, bulls, brokers, jobbers, role of regulator SEBI: powers and operational activities of SEBI, limitations, steps taken by GOI to make more effective.

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Commercial banks - Definition of banks, functions of banks, types of banks scheduled commercial banks and non scheduled commercial banks, private sector banks, public sector banks, foreign banks, Role of Regulator RBI : Banking Regulation Act of 1949, Role of commercial banks in various sectors of the Economy - Agriculture, Industry, trade. Transport, employment generation and poverty eradication. Financial Institutions - Need and Role of financial Institutions, Development banks Meaning and need, functions and operational activities of IFCI, ICICI, IDBI, SIDBI, NHB, Investment Banks Meaning & need LIC of India, Four subsidiaries, UTI, Mobilization of resources and their investment.

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REFERENCES: 1. 2. 3. 4. 5. 6. 7. Mishra S.K. and Puri V.K. Economic Environment of Business Himalaya Publishing House. Cherunilam Francis Business Environment and Policy Himalaya Publishing House. Ashwathappa K. Essentials of Business Environment 7th Edition. Himalaya Publishing House. KPM Sundharam and Rudra Dutt: Indian Economy, S.Chand & Co. New Delhi. Suresh Bedi : Business Environment Excel Books, New Delhi Kurukshetra Monthly Ministry of Rural Development GOI, New Delhi Yojana Monthly, Planning commission, GOI, New Delhi