BUSINESS POLICY AND ENVIRONMENT - … · ENVIRONMENTAL ANALYSIS ... ETOP –Environmental ... Nominal Group Technique Face-to-Face Discussion Group exchanges facilitate plans Subjective

BPK3G

BUSINESS POLICY AND

ENVIRONMENT

Unit : I►DIMENSIONS OF BUSINESS ENVIRONMENT

►DIFFERENT TYPES OF ENVIRONMENTAL FACTORS

►INTERNAL AND EXTERNAL ENVIRONMENT

►ENVIRONMENTAL ANALYSIS

►ENVIRONMENTAL THREAT OPPORTUNITY PROFILE (ETOP)

►FORECASTING TECHNIQUES

BPK3G- Business Policy and Environment 2

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DIMENSIONS OF BUSINESS ENVIRONMENT

BUSINESS ENVIRONMENT

ECONOMIC

LEGAL

NATURAL

TECHNOLOGY

GOVERNMENT

DEMOGRAPHIC

POLITICAL

CULTURAL

SOCIAL

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FACTORS COULD INCLUDE

Political International Trade, Taxation Policy

Economic Interest Rates, Exchange rates, National

income, Inflation , Unemployment, Stock

Market

Social Ageing population, Attitudes to work,

income distribution

Technological Innovation, New Product Development,

Rate of Technological Obsolescence

Environmental Global Warming, Environmental Issues.

Legal Competition law, Health and Safety,

Employment Law.

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INTERNAL & EXTERNAL ENVIRONMENT

INTERNAL & EXTERNAL ENVIRONMENT

http://study.com/academy/lesson/internal-and-external-environments-of-business-lesson-quiz.html

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ENVIRONMENTAL ANALYSIS

Why Environmental Analysis?

•Analysis should provide an understanding of current and potential

changes taking place, besides long term future prospective.

•Environmental analysis provides inputs in form of information which

is useful for strategic decision making.

•Environment analysis should facilitate and foster strategic thinking in

organization by bringing fresh view points and ideas in context of

business operations.

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• INTERNAL

• EXTERNAL•MICRO

•MACRO

ENVIRONMENTAL VARIABLES

• POSITIVE

• NEGATIVE

INFLUENCE

• BETWEEN EXTERNAL AND INTERNAL ENVIRONMENT

MUTUAL RELATIONSHIP

ETOP –Environmental Threat Opportunity Profile

“Surroundings, external objects, influences or

circumstances under which someone or

something exits”

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Preparing an ETOP

•Dividing the environment into different sectors.

•Analyzing the impact of each sector on the organization.

•Subdividing each environmental sector into sub-factor.

•Impact of each sub sector on organization in form of a

statement.

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ETOP – Advantages

Help to determine the key threats and opportunities

Good tool to qualify the factors related to company‟s

strategy

Can consider many factors fro each special case

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Subjective

ApproachQualitative in Nature and

usually based on the

opinions of people.

Objective

ApproachQuantitative/ Mathematical

formulations – statistical

forecasting

FORECASTING TECHNIQUES

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Method Advantages Disadvantages

Estimation People in position estimate the number of people the firm will require in the next year.

Incorporates knowledge of corporate plans in making estimates

May be subjective

Expert Opinion Panel of experts forecast HR requirements for particular future business scenarios. For this method, there may be a single expert, or estimates of several experts may be pooled together

Delphi Experts go through several rounds of estimates with no face-to-face meeting

Incorporates future plans & knowledge of experts related to market, industry and technical development

Subjective, time consuming & may ignore data

Group Brainstorming Face-to-Face discussion based on multiple assumptions about future business direction

Generates lot of ideas Does not lead to conclusion

Nominal Group Technique Face-to-Face Discussion Group exchanges facilitate plans

Subjective which may ignore data

Simple Averaging Simple averaging of viewpoints

Diverse view points taken Extremes views are masked when averaged.

Qualitative Methods of Demand Forecasting

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Method Advantages Disadvantages

Trend Analysis &

Projection

Based on past relationship between a business factor related to

employment level itself

Simple long-run trend

analysis

Extrapolates past

relationship between

volume of business

activity & employment

levels into the future

Recognizes linkage

between employment

& business activity

Assumes that volume

of business activity of

firm for forecast

period will continue at

same rate as previous

years ignores

multiplicity of facers

influencing

employment levels

Regression Analysis Regresses

employment needs

onto key variables

Data driven uses

multiple business

factors

Difficult to use & Apply

Quantitative Methods of Demand Forecasting

Unit : II

►ORGANISATIONAL ANALYSIS

►MEANING, DEFINITION, NEED & APPROACHES

►SYSTEMS APPLICATIONS AND PRODUCTS (SAP)

►SWOT ANALYSIS

14

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ORGANISATIONAL ANALYSIS

Organizational Analysis or more commonly

Industrial Analysis is the process of reviewing the

development, work environment, personnel, and

operation of a business of another type of

association.

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ORGANISATIONAL ANALYSIS

Meaning, Need and Importance

http://study.com/academy/lesson/what-is-an-organizational-analysis-definition-format-examples.html

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QUANTITATIVE APPROACH TO MANAGEMENT

DEFINITION & METHODS

QUANTITATIVE APPROACH TO

MANAGEMENT

http://study.com/academy/lesson/quantitative-approach-to-management-definition-lesson-quiz.html

http://study.com/academy/lesson/quantitative-approach-to-management-definition-lesson-quiz.html

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SAPSYSTEMS, APPLICATIONS AND PRODUCTS

SAP Business One is arranged in several

modules. Whilst each module handles specific

business processes, others may be affected due

to the integrated nature of the solution.

1

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SWOT ANALYSIS

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SWOT ANALYSIS

SWOT ANALYSIS

MEANING & IMPORTANCE

https://www.youtube.com/watch?v=JGUX1oEzj7A

Unit : III►GLOBAL ENVIRONMENT

►SIGNIFICANCE, CAUSES AND STRATEGIES OF GLOBALISATION

►MNCs

►MEANING, MERITS AND DEMERITS OF MNCs

►FDI

►MEANING & BENEFITS


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GLOBAL ENVIRONMENT

The Global Business Environment is that the business carried on

globally. It is influenced by the World Trade Organization,

principles and agreements.

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GLOBALISATION AND ITS IMPACT

ON

INDIAN BUSINESS

https://www.youtube.com/watch?v=ss2DQ2Gax54







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GLOBALISATION

SOCIAL AND CULTURAL DIMENSIONS

TECHNOLOGY & COMMUNICATION

CORPORATE

WORLD

INTERNATIONAL TRADE, RELATIONS, &

ECONOMY

SIGNIFICANCE OF GLOBALISATION

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CAUSES OF GLOBALISATION

TRADE LIBERALISATION: In the last 50 years there has

been a reduction in barriers. There are more FTA‟s and

Customs Unions and more multilateral agreements such as

the WTO/ World Economic Forum.

GROWTH OF MNC’S: Firms have been under pressure t o

innovate and up-grade. Rising costs/ greater competition /

desire for more profit has increased the need to look for

new markets.

INCREASE IN CAPITAL MOBILITY: Eg. Removal of

Exchange controls.

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STRATEGIES FOR GLOBALISATION

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GLOBAL STRATEGIES

Market Globalization•Similar Customer Needs

•Global Customers

•Transferring Marketing

Globalization of

Competition

Interdependence

Competitors global

High exports / imports

Globalization of

Government Policies

•Trade Policies

•Technical Standards

•Host Government

Policies

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MULTINATIONAL COMPANIES

(MNCs)

IN INDIA

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MEANING OF MNC

An enterprise operating in several countries but

managed from one (home) country.

Generally, any company or group that derives a

quarter of its revenue from operations outside of

its home country is considered a multinational

corporation.

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DEFINITION : MULTINATIONAL

CORPORATION

The essential nature of the multinational enterprises lies

in the fact that its managerial headquarters are located

in one country while the enterprise carries out

operations in a number of other countries as well.

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Difference International Multinational

Meaning A global firm pursues a unified strategy to coordinate various international operations.

A TNC corporations essentially shed their home nation identity and act as stateless organizations, in other words they do not identify it self with one national home like an MNC

Configuration of assetsand capabilities

Centralized and globally scaled Dispersed. Interdependent and specialized.

Roles of overseas operations

Implementing parent company strategies

Differentiated contributiions by national units to integrated worldwide operations.

Development and diffusion of knowledge

Knowledge developed and retained at the center.

Knowledge developed jointly and shared worldwide.

DIFFERENCES BETWEEN INTERNATIONAL AND

MULTINATIONAL COMPANIES

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HEADQUARTERS OF

MNCs

Operation in

Country 4

Operation in

Country 3

Operation in

country 2

Operation in

Country 1

OPERATION OF MNCs

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FEATURES OF MNC

•Big size

•Huge Intellectual Capital

•Operates in many countries

•Large Number of Customer

•Large Number of Competitors

•Structural way of Decision Making

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IMPACT OF MNCs ON INDIA

Large amount of tax collections through MNC‟s

Increased revenue

Improved Economic Health

Increased Employment

Increased Foreign Relation

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MERITS DEMERITS

Increase in Investment level May acquire Monopoly Power

Transferring the Technology Underestimate local culture

It increase host company exportthan import

Think abut profit rather than the host country interest

Integrating National Economy Inflexibility in terms and conditions

Implementing new Innovations Heavy use of non-renewable natural resources

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IMPACT OF MNCs IN INDIA

PRE AND POST EFFECT OF MNC‟s in INDIA

https://www.youtube.com/watch?v=1l-dF22QFZw

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FOREIGN DIRECT INVESTMENT IN DIA (FDI)

Foreign Direct Investment (FDI)

is a type of investment that

involves the injection of foreign

funds into an enterprise that

operates in a different economy

of origin from the investor.

It usually involves participation in

management, joint venture,

transfer of technology and

expertise.

Economic Growth

Trade

Employment and skill levels

Technology diffusion and knowledge

transfer

Linkages and spillover to

domestic firms

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BENEFITS OF FDI

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BENEFITS OF FDI

Study.com/academy/lesson/what-is-foreign-direct-investment-definition-advantages-disadvantages.html

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BPK3G- Business Policy and Environment 33/15

Unit : IV►EONOMIC AND SOCIAL ENVIRONMENT

►ELEMENTS AND IMPACT OF ECONOMIC ENVIRONMENT

►INTERNATIONAL TRADE AGREEMENTS

►GATT

►WTO

►TRIMS

►TRIPS

►IPR


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ECONOMIC AND BUSINESS ENVIRONMENT

Meaning of Economic Environment

Those Economic factors which have their affect on the working of the

business is known as economic environment.

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Elements of Economic Environment

Economic System

Economic Conditions

Economic Policies

Economic Policies

International Economic

Environment

Economic Legislations

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IMPACT OF ECONOMIC ENVIRONMENT

ON BUSINESS

Importance of Stability

Impact on Business of changes

in the economic environment

Levels of Inflation

Availability and Cost of Credit

Labor

Changes in Government Policy

Globalization

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INTERNATIONAL TRADE AGREEMENTS

Improve Economic Relations of Countries

Cover variety of commercial issues

Tax agreements prevent double taxation.

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GATT

GENERAL AGREEMENT ON TARIFF AND TRADE

GATT is to promote economic well-being by “enabling its members to

enter into reciprocal and mutually advantageous arrangements”

It aims for the substantial reduction of tariffs and other barriers to trade

and to the elimination of discriminatory treatment of international trade.

http://study.com/academy/lesson/gatt-definition-history-purpose-members.html

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WORLD TRADE ORGANISATION

What are the Aims of WTO?

•The WTO aims to create economic peace and stability in the world

through a multilateral system based on consenting member states that

have ratified the rules of the WTO In their individual countries as well.

WTO – AIMS AND ROLES

https://www.youtube.com/watch?v=tGokOHrHH5I




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TRADE RELATED INVESTMENT MEASURES

•Agreement on Trade Related Investment

Measures (Uruguay Round)

•TRIMs are rules that apply to the domestic

regulations a country applies to foreign

investors.

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Restrictions

1. Include local content requirements

2. Manufacturing requirements

3. Trade balancing requirements

4. Domestic Sales requirements

5. Export performance requirements

6. Local equity restrictions

7. Foreign exchange restrictions

8. Remittance restrictions

9. Licensing requirements

10.Employment restrictions

THE TRIMS AGREEMENT

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LEGAL FRAMEWORK

•The TRIMs agreement does not provide any new language

•It focuses on tow Articles that were identified in a previous

case under the GATT

– Article III (National Treatment)

• National treatment of imported product, unless specified in

other agreements

• Subjects the purchase or use by an enterprise of imported

products to less favorable conditions than the purchase or

use of domestic products.

– Article XI (Quantitative Restrictions)

• Prohibition of quantitative restrictions on imports and exports

• Part of the general trend in textiles and agriculture to phase out the

use of quantitative restrictions.

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India’s Notified TRIMs

•TRIMs Agreement India had notified three trade related

investment measures as inconsistent with the provisions of

the Agreement:

1. Local Content (mixing) requirements in the production of

News Print,

2. Local Content requirements in the production of

Rifampicin and Penicillin – G, and

3. Dividend balancing requirement in the case of

investment in 22 categories consumer goods.

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What is Intellectual Property and IPR?

•Intellectual Property (IP) is a term referring to a number of

distinct types of creations of the mind for which a set of

exclusive rights are recognized and the corresponding fields

of law.

•Under IPR, owners are granted certain exclusive rights to a

variety of intangible assets, such as musical, literary, and

artistic works;

•Monitored by World Intellectual Property Organization

(WIPO). Switzerland.

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TREATIES

•There are 21 International Treaties in the field of intellectual property,

which are administered by WIPO.

•The treaties fall into three groups names

Treaties, which establish international protection

Treaties, which facilitate international protection and

Treaties, which establish classification systems.

•1994 Uruguay round. Agreement on Trade Related Aspects of Intellectual

Property Rights (TRIOs) and Agreement on Trade Related Investment

Measures (TRIMs) by WTO (then GATT).

•1996 – An Agreement between WIPO and the WTO provides for

cooperation concerning the implementation of the TRIPs Agreement, such

as notification of laws and regulations, and legislative assistance to

member countries.

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TYPES OF IPR

Intellectual Property is divided into two categories

Industrial Property which includes

•Patents for inventions,

•Trademarks

•Industrial Designs and

•Geographical Indications

Copyright and related rights which cover

•Literary and artistic expressions (e.g. books, films, music, architecture, art),

•Rights of performing artists in their performances, producers of phonograms

in their radio and television broadcasts which are also referred to as

neighboring rights.

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Copy Rights: A legal concept giving the creator of an original work exclusive

rights to it, usually for a limited time.

Trademarks: A distinctive sign or indictor used by an individual, business

organization, or other legal entity to identify those products or services to

consumers.

Patents : A set of exclusive rights granted by a sovereign state to an inventor

for a limited period of time in exchange for the public disclosure of an invention.

Industrial Design Rights: Protects the visual design of objects that are not

purely utilitarian.

Geographical Indication: Place names (in some countries also words

associated with a place) used to identify the origin and quality, reputation or

other characteristics of products.

Trade Secrets

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WHY DO WE NEED IPR?

•Incentive to produce

•Protects the Creator

Protects innovators from theft.

Individuals have all elements of control

Easy to sort out disputes between individuals

•Document Creations

Creators Document their innovations

Provide creators the freedom to converse about their

innovation

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THE TRIPS AGREEMENT

•Negotiated in the 1986-94 Uruguay Round

•Trade Related Aspects of Intellectual Property Rights (TRIPS) is a

World Trade Organization (WTO) agreement designed by developed

countries to enforce a global minimum standard of Intellectual

Property Rights.

•Only one actually enforceable under GATT Arts. XXI & XXII & the

WTO dispute settlement understanding.

•Since TRIPS is part of the WTO agreements, developing countries

that want access to the global market through the WTO must accept

the TRIPS agreement, and integrate its IPR standards into their

national legislation.

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INDIAN PATENT ACT TRIPS

Only process not product patents in food, medicines and chemicals

Process and product patents in almost all fields of technology

Term of patents; 14 years, 5-7 in chemicals, drugs

Term if patents: 20 Years

Compulsory Licensing Limited compulsory licensing

Several areas excluded from patents Almost all fields of technology patentable

Government allowed using patented invention to prevent scarcity

Very limited scope of governments

Difference between TRIPS and Indian

Patent Act

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BPK3G- Business Policy and Environment 33/15

Unit : V

►SOCIAL ENVIRONMENT

►BUSINESS AND SOCIETY

►CORPORATE SOCIAL RESPONSIBILITY

►CORPORATE GOVERNANCE

►BUSINESS ETHICS


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SOCIAL ENVIRONMENT

The Social Environment, Social Context refers to the

immediate physical and social setting in which people live

or in which something happens or develops. It includes the

culture that the individual was educated or lives in, and the

people and institutions with whom they interact.

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SOCIAL ENVIRONMENT IN BUSINESS - DEFINITION

Social Environment is defined as “ The Social Environment

consists of the sum total of a society‟s beliefs, customs,

practices and behaviors. It is, to a large extent, an artificial

construct that can be contrasted with the natural

environment in which we live. Every society constructs its

own social environment.

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BUSINESS AND SOCIETY

BUSINESS, GOVERNMENT & SOCIETY:

INTERACTIONS AND INFLUENCES

http://study.com/academy/lesson/business-government-society-interactions-and-influences.html

http://study.com/academy/lesson/business-government-society-interactions-and-influences.html

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CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility or CSR has

been defined by Lord Home and Richard

Watts in The World Business Council for

Sustainable Development‟s publication

„Making Good Business Sense‟ as “…. The

continuing commitment by business to behave

ethically and contribute to economic

development while improving the quality of

life of the workforce and their families as well

as the local community and society at large”

CSR is one of the newest management

strategies where companies try to create a

positive impact on society while doing

business.

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AIMS OF CSR

Environmental Aims

Social and community activities

Sustainable Development

Ethical Issues

Business RelationshipPeople

Corporate Social Responsibility (CSR)

Planet

Environmental protection and conservation

Profit

Generation of sustainable

business results

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CORPORATE GOVERNANCE

Corporate governance is the set of

processes, customs, policies,

laws, and institutions affecting the

way a corporation(or company) is

directed, administered or

controlled. Corporate governance

also includes the relationships

among the many stakeholders

involved and the goals for which

the corporation is governed. In

simpler terms it means the extent

to which companies are run in an

open & hones manner.

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SCOPE OF CORPORATE GOVERNANCE

ACCOUNTABILITY of Board of Directors & Their constituent

responsibilities to the ultimate owners- the shareholders.

TRANSPARENCY, i.e. right to information, timeliness & integrity of the

information produces.

CLARITY IN RESPONSIBILITIES to enhance accountability

QUALITY & COMPETENCE OF DIRECTORS and their track record

CHECKS & BALANCES in the process of governance

ADHERENCE TO THE RULES, laws & spirit of codes.

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BENEFITS OF CSR

Win new business

Increase customer retention

Develop and enhance relationships with customers, suppliers and

networks

Attract, retain and maintain a happy workforce and be an Employer

of Choice

Save money on energy and operating costs and manage risk.

Differentiate yourself from your competitors

Generate innovation and learning and enhance your influence.

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ETHICAL ISSUES IN BUSINESS

A problems, situations, or opportunities requiring an

individual to choose among actions that may be evaluated

as right or wrong, ethical or unethical.

Ethical issues arise because of;

•Conflict among personal/organizational values

•Conflicts with societal values.

TM


Importance of Business Ethics

and Social Responsibility

BUSINESS ETHICS AND

SOCIAL RESPONSIBILITY

https://www.youtube.com/watch?v=CiOHT619uj0



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THANK YOU

Documents

BUSINESS POLICY AND ENVIRONMENT - … · ENVIRONMENTAL ANALYSIS ... ETOP –Environmental ... Nominal Group Technique Face-to-Face Discussion Group exchanges facilitate plans Subjective