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Transcript of Jean Paul BE1
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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)