CS Foundation- Business Environment, Entrepreneurship & Law

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  • iSTUDY MATERIAL

    FOUNDATION PROGRAMME

    BUSINESS ENVIRONMENT

    AND

    ENTREPRENEURSHIP

    PAPER 1

    ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003tel 011-4534 1000, 4150 4444 fax +91-11-2462 6727email info@icsi.edu website www.icsi.edu

  • ii

    THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

    TIMING OF HEADQUARTERS

    Monday to Friday

    Office Timings 9.00 A.M. to 5.30 P.M.

    Public Dealing Timings

    Without financial transactions 9.30 A.M. to 5.00 P.M.

    With financial transactions 9.30 A.M. to 4.00 P.M.

    Phones

    41504444, 45341000

    Fax

    011-24626727

    Website

    www.icsi.edu

    E-mail

    info@icsi.edu

    Laser Typesetting by AArushi Graphics, Prashant Vihar, New Delhi, andPrinted at M P Printers/10000/February 2012

    ii

  • iii

    FOUNDATION PROGRAMME IMPORTANT NOTE

    The study material has been written in lucid and simple language and conscious efforts have been made toexplain business environment, different forms and functions of organizations, basic elements of businessand mercantile laws and concept of entrepreneurship. This study material has been divided into three mainparts

    Part-A Business Environment,

    Part-B Business Laws, and

    Part-C Entrepreneurship

    The institute has decided that the first examination for Foundation Programme under new syllabus will be heldfrom December 2012 session in the Optical Mark Recognition (OMR) format, whereby students are required toanswer multiple choice questions on OMR sheet by darkening the appropriate choice by HB pencil. One markwill be awarded for each correct answer. There is NO NEGATIVE mark for incorrect answers.

    The specimen OMR sheet is appended at the end of the study material. There are two self test question papersin the study to acquaint students with the pattern of examination. These are for practice purpose only, not to besent to the institute.

    For supplementing the information contained in the study material, students may refer to the economic andfinancial dailies, commercial, legal and management journals, Economic Survey (latest), CS Foundation CourseBulletin, Suggested Readings and References mentioned in the study material and relevant websites.

    The objective of the study material is to provide students with the learning material according to the syllabus ofthe subject of the Foundation Programme. In the event of any doubt, students may write to the Directorate ofAcademics and Professional Development in the Institute for clarification at bee@icsi.edu

    Although due care has been taken in preparing and publishing this study material, yet the possibility of errors,omissions and/or discrepancies cannot be ruled out. This publication is released with an understanding that theInstitute shall not be responsible for any errors, omissions and/or discrepancies or any action taken on the basisof contents of the study material.

    Should there be any discrepancy, error or omission noted in the study material, the Institute shall be obliged ifthe same are brought to its notice for issue of corrigendum in the CS Foundation Course Bulletin.

  • iv

    SYLLABUS

    PAPER 1: BUSINESS ENVIRONMENT AND ENTREPRENEURSHIP

    Level of Knowledge: Basic Knowledge

    Objective: To give orientation about different forms of organizations, functions in organizations, businessstrategies and environment, along with an exposure to elements of business laws and entrepreneurship.

    PART A: BUSINESS ENVIRONMENT (30 MARKS)

    1. Business Environment

    Introduction and Features

    Concepts of Vision & Mission Statements

    Types of Environment:

    Internal to the Enterprise

    Value System, Management Structure and Nature, Human Resource, Company Image andBrand Value, Physical Assets, Facilities, Research & Development, Intangibles, CompetitiveAdvantage

    External to the Enterprise

    Micro: Suppliers, Customers, Market Intermediaries

    Macro: Demography, Natural, Legal & Political, Technological, Economy, Competition, Socio-cultural and International

    Business Environment with reference to Global Integration

    2. Forms of Business Organization

    Concept and Features in relation to following business models:

    Sole Proprietorship

    Partnership

    Company

    Statutory Bodies and Corporations

    HUF and Family Business

    Cooperatives, Societies and Trusts

    Limited Liability Partnership

    Other Forms of Organizations

    3. Scales of Business

    Micro, Small And Medium Enterprises

    Large Scale Enterprises and Public Enterprises

    MNCs

  • v4. Emerging Trends in Business

    Concepts, Advantages and Limitations:

    Network Marketing

    Franchising

    Business Process Outsourcing (BPO)

    E-Commerce

    M-Commerce

    5. Business Functions

    Strategic: Planning, Budgetary Control, R&D, Location of a Business, Factors affecting Location,Decision Making and Government Policy

    Supply Chain: Objectives, Importance, Limitations, Steps, Various Production Processes

    Finance: Nature, Scope, Significance of Financial Management, Financial Planning (ManagementDecisions Sources of Funds, Investments of Funds, Distribution of Profits)

    Marketing: Concept, Difference Between Marketing and Selling, Marketing Mix, Functions of Marketing

    Human Resources: Nature, Objectives, Significance

    Services: Legal, Secretarial, Accounting, Administration, Information and Communication Technology

    PART B: BUSINESS LAWS (40 MARKS)

    6. Introduction to Law

    Meaning of Law and its Significance; Relevance of Law to Modern Civilized Society; Sources of Law;Legal Terminology and Maxims; Understanding Citation of Cases

    7. Elements of Company Law

    Meaning and Nature of Company; Promotion and Incorporation of a Company; Familiarization with theConcept of Board of Directors, Shareholders and Company Meetings; Company Secretary;E-Governance

    8. Elements of Law relating to Partnership

    Nature of Partnership and Similar Organizations - Co-Ownership, HUF; Partnership Deed; Rights andLiabilities of Partners: New Admitted, Retiring and Deceased Partners; Implied Authority of Partnersand its Scope; Registration of Firms; Dissolution of Firms and of the Partnership

    9. Elements of Law relating to Contract

    Contract - Meaning; Essentials of a Valid Contract; Nature and Performance of Contract; Terminationand Discharge of Contract; Indemnity and Guarantee; Bailment and Pledge; Law of Agency

    10. Elements of Law relating to Sale of Goods

    Essentials of a Contract of Sale; Sale Distinguished from Agreement to Sell, Bailment, Contract forWork and Labour and Hire-Purchase; Conditions and Warranties; Transfer of Title by Non-Owners;Doctrine of Caveat Emptor; Performance of the Contract of Sale; Rights of Unpaid Seller

    11. Elements of Law relating to Negotiable Instruments

    Definition of a Negotiable Instrument; Instruments Negotiable by Law and by Custom; Types of

  • vi

    Negotiable Instruments; Parties to a Negotiable Instrument - Duties, Rights, Liabilities and Discharge;Material Alteration; Crossing of Cheques; Payment and Collection of Cheques and Demand Drafts;Presumption of Law as to Negotiable Instruments

    PART C: ENTREPRENEURSHIP (30 MARKS)

    12. Entrepreneurship

    Introduction to Concept of Entrepreneurship, Traits of Entrepreneur, Entrepreneurship: Who isan Entrepreneur, Why Entrepreneurship

    Types of Entrepreneurs: Idealist, Optimizer, Hard Worker, Sustainer, Improver, Advisor, Superstar,Artiste, Visionary, Analyst, Fireball, Juggler, Hero, Healer.

    Distinction Between Entrepreneur and Manager

    Entrepreneurship and Intrapreneurship: Definition, Features, Examples and Difference

    13. Entrepreneurship Creativity and Innovation

    Entrepreneurial Venture Initiation: Sensing Entrepreneurial Opportunities, Environment Scanning,Market Assessment

    Assessment of Business Opportunities: Identification of Entrepreneurial Opportunities, Selectionof an Enterprise, Steps in setting up of an Enterprise

    Entrepreneurial Motivation: Meaning and Concept, Process of Achievement Motivation, Self-efficacy,Creativity, Risk Taking, Leadership, Communication and Influencing Ability, Mentoring and PlanningAction

    Developing Effective Business Plan

    14. Growth & Challenges of Entrepreneurial Venture

    Strategic Planning for Emerging Venture: Entrepreneurial Opportunities in Contemporary BusinessEnvironment

    Financing the Entrepreneurial Business: Resource Assessment -Financial and Non Financial,Fixed and Working Capital Requirement, Funds Flow, Sources and Means of Finance.

    Managing the Growing Business: Effecting Change, Modernization, Expansion, and Diversification.

  • vii

    LIST OF RECOMMENDED BOOKS*PAPER 1 : BUSINESS ENVIRONMENT AND ENTREPRENEURSHIP

    READINGS

    1. M.C. Shukla A Manual of Mercantile Laws; Sultan Chand & Company, New Delhi.

    2. N.D. Kapoor Mercantile Law; Sultan Chand & Co., New Delhi.

    3. N.D. Kapoor & Business Laws and Management; Sultan Chand & Sons.Dinkar Pagare

    4. M.C. Kuchhal Mercantile Law; Vikas Publishing House, New Delhi.

    5. P. P. S. Gogna A Textbook of Business Law; Sultan Chand & Company, New Delhi.

    6. Poonam Gandhi Business Studies; Dhanpat Rai & Company Private Limited, Delhi.

    7. NCERT Business Studies Text Book for Class 10+2

    8. D. Chandra Bose Business Laws; PHI Learning Pvt. Ltd.

    REFERENCES

    1. Sen & Mitra Commercial Law; The World Press Pvt. Ltd., Calcutta.