bh unit 1,2
TRANSCRIPT
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Definition
Business involves all the activities enabling
exchange of goods and services for money in
the market
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Types of Governmental Systems
Command system Dictatorship
Free market system Make their own decision
Mixed economy Combination of both
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Types of market
Perfect competition Numerous buyers &
sellers
Oligopoly Few buyers & sellers Monopoly Single seller (generally
government sector )
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Business Environment
Macro environment Common to no of
industrial sectors .
Ex : Political,Legal environment Micro environment External but within
macro
Ex : Suppliers,competitors International environment International
factors
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Role of Entrepreneurship
Entrepreneur Business promoted by the
person
Generally Government plays the role ofentrepreneur but now a days individual take
up the job too ..
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Need for Business History
BH Bio data of a business
Traces of the past
Judging present & future trends
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Ancient History in brief
Barter system India not a single country but made up of no of
kingdoms
Generally family run business
Inter kingdom trade Transaction between twodifferent kingdoms
International trade Exports & Imports
Exported goods Cotton,silk & Wool etc Imported goods Horse,ceramic ware,Chinese
silk etc
Banking Bankers were called Seth
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15 th century onwards (era of
European trading companies )
15 th century Portugese made incursions
into Goa ,Western India
Early 17 th century- Dutch East India Coentered
Mid 17 th century British East India
Company commenced trade with India
Duty exemption in Bengal by the Mughal
emperor
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18 th century French established their
presence by entering Pondicherry Population of India in 1800AD 100 million
Arab,Egyptian,Chinese, Persian & Armenian
merchants
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Details of British Operations
British East India Company Joint stock
company ,level of control increased from time
to time by its legal measures ,so the co was
firmly under Govt control .
Merchants began to oppose abolished
By this time India was under British control
except for certain areas .
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Industrial revolution in UK
Started from late 18 th century
Gave rise to factory system of large scale
production India easy market for manufactured goods
Raw materials like cotton exported from
India finished textiles were imported .
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Agency houses
Free merchants agency houses for
commercial activities
AH acted as agent of firms in UK from whom
they charged a fee for their service .
1st AH Forbes & Co
AH Entrepreneurial abilities but abused formalpractices
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Trade Balance
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Early 20th century
India one of the wealthiest economy began
to decline from 19 th century
By19
20
,USA
was the worlds largest economy
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Rise of native Indian entrepreneurs
from later part of19 th century
Textiles prominent industry in India
First formed by Dawar in 1854
Prominent names are Morarji Goculdas,Khatau,Thackersey , Sassoon,Hukumchand ,Juggilal ,Jamshed Tata.
Birlas trading in silver,sugar,cotton etc
Due to lack of regulation exploitation intextile mills ,to reduce the plight Factories Act1881 was passed
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Other industries & Trade
Tagore purchased coal mines 1840
First railway line opened in 1854
First 3 universities were established
Calcutta Electric supply corporation wasregistered in 1857
Tata hydro elcetric power supply in 1910
Ahmedabad Electric co in 1913
Andhra valley power supply ofTata group in 1916
Tata power in 1919
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Electricity being used in textile industry
Post & Telegraph stations have been set up
Bombay share market - 1875
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Banks
Banks set up by Indians between 19 th
century to 1911
PNB , Bank of India , Central bank of India ,Bank of Baroda , Punjab & Sind Bank , Indian
bank .
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Pre independence era in Indian
Business
Between world war 1915 to 1947
Momentum in growth of Indian business
Increase in domestic demand due to war
Opportunity for Indian business to grow
Swadeshi spirit increased
Indian industrial commision & Fiscalcommision on Tariff protection to protect
Indian industry
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Industrial sector substantial progress .
Share of native indians in Indian companies 13% to 34 %
European counterpart 72 to 40 %
Indian industry no longer confined to textilesbut spread to sugar , steel , cement , coal ,
shipping , paper , chemicals & airline .
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World war II
Demand for Indian goods increased
Price increased & the industry made large
profits
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Performance of Indian selected
Business Houses Tata
Birla
Walchand
Kirloskars
Singhanias
Thapars
Modis
Lala sriram
Dalmia
Mafatlal
Bajaj
Godrej
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Growth of joint stock companies (Pre
independence)
India - joint stock companies mid 19 th
century
Europe 17
th century Family controlled
Growth
1851 1892 1149 Co were registered ,only505 survived
1939 11114 with a capital of 290 crores
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1948 22675 with a capital of570 crores
During 1920s & 30s big internationalcompanies entered namely
Unilever,ICI,Dunlop, General Motors ,Ford
motors etc.
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Chamber of commerce & industry
1st chamber of commerce was set up in France in
1599.
In India , Coc was started in Bengal,Bombay &
Calcutta by the British with a few Indians in 1830
Chambers at Cochin,Karachi & upper India during
the 19th century
1905-1947 - Coc - founded by Indian businesshouses ,they laid their own standards & practices
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Federation of Indian COC &
industry(FICCI) 1st set up by the initiative of G.D.Birla & Thakur das in1927.
Southern Indian COC was founded in 1909.
Indian merchant chambers traders and small
industrialist to protect their interest. Associated Coc large business interest mainly British
Specific associations to industry
Ex : Indian Tea association 1885
Mining association- 1892
Paper association 1895
Fiscal commision & Tariff board set up in 1930
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Labour relation(Pre independence)
Exploitation phase Labour exploited ,difficult working condition
,heavy working hours
Cotton mills 1
3 to15
working hrs a day Condition of female workers deplorable
Child labour
Jute mills Child labour
Factories Act was passed but with no specificeffect.
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Organised labour movement
There were periodic strikes
1st strike in Bombay with 120000 workers mostly
from textile industry not a success
3 yrs later strike by plantation workers - not a
success By mid of1921 - stike took place in Madras
Strike mainly for profit sharing & higher wages .
Trade Union movement protect worker interest.
In 1918 AITUC (All India Trade Union Congress
)was formed
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Post independence era in Indian
business
Socialistic economy :
Economic policy resolution adopted at thekarachi session of congress in 1931.
At the time of independence India anagricultural country
Before 1947 exploitation was present
After 1947 demand to built the country
1947-there were 1811 strikes 1950- there were 814 strikes
Later Unionism became more militant
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Industrial policy resolutions- Basic
infrastructure & regulatory system
Business activity after independence guided
by Industrial policy resolution of Govt of India
1948 & Industrial resolution of1956
Resolution of1948 greater participation by
Govt in economic activity & role of private
capital in a regulatory framework
Emphasize mainly on continuous increase in
production & equitable distribution .
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1st five year plan 1951-56 priority to agricultural sector .
Industrial sector emphasize on basic industrieslikeiron,steel,metal,heavyengineering,cement,chemicals,fer
tilizers,power. 5 yr plans is still continued.
Industrial Finance Corporation of India was set up after1948 policy resolution
Main objective providing concessional finance in
backward areas. National Small industries Corporation of India (NSCI)
,IDBI,Industrial re finance Corporation of India (IRCI)
Imperial Bank of India (1955)- nationalised to become SBI
Life insurance business nationalised to become - Lifeinsurance Corporation of India (LIC)- providing basi financialinfrastructure
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Industrial policy resolution 1956
Gave more specific directions relating to the
responsibility of the state towards industrialdevelopment
Obj : accelerate rate of economic growth,speedup industrialization,develop heavy industries &
machine making industry,expand public sector &build up co operative sector,reduce disparities inincome & wealth,prevent monopoly.
The policy also dealt with providing financial &
technical assistance, balanced development ofdifferent regions,maintenance of industrialpeace,accelerating growth of village in smallscale.
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Policy stmt divided industry into 3 categories
Schedule A 17 industries responsibility of
state Ex:Atomicenergy,Railways,Aircraft,Airtranspor
t,defence, telecommunication etc.
Schedule B progressively state owned withstate initiative to set up new units but private
enterprises would be allowed to supplement
Ex : Sea transport,machine tools,fertilisers etc Schedule C Left to private sector but subject
to licencing regulation
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Regulatory System
To implement a planned economy regulatorysystem needed
National need projected by planning
commission with roles of public & private sectordefined
Industries act was passed in 1951-System ofindustrial licencing was introduced
Pricing & distribution of specific industries like oil-controlled by Essential Commodities Act .
Import & Tariff policies to conserve foreignexchange
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Foreign Exchange Regulations Act (FERA) ctrl
entry & operations of foreign co in India Pricing of shares & public issues controlled
by Controller of Capital issues
1969
MRT
P Commission check growth ofmonopoly
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Emergence & growth of Public sector
After 1956 policy resolution no ofenterprises were set up in public sector bothby central & state Govt.
Schedule A IOC,BHEL,NLC,ONGC etc
Schedule B Indian Tourism development,Indian drugs & pharmaceuticals etc .
Canalising of International trade
Nationalisation Banking , general insurance,coal & oil enterprises were nationalised in1970s
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Growth Phase : Majority public ,but
drastically slowed down since reforms of
1991.
Pros & Cons- Pros : Advantage of Govt
resource & support
Cons Too many restrictions
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Growth of Private sector
Private sector grew within the licence permit system Post 1956 policy statement concession to private
sector
Liberalisation in 1973 policy statement
Private sector began to get Govt support
Investment from industrial houses & foreign Co werepermitted
Industrial policy statement of1980-attention forpromoting competition , technological upgradation &
modernisation 1985-86 increasing productivity,reducing cost &
improving quality.
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Indian private Business Houses
Tata
Birla
JKGroup Kirloskars
Thapars
Mafatlal
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Co operatives
Policy resolution of1956 role of
cooperatives
NCDC (National cooperative Development
corporation)
National cooperative sugarmills federation
National cooperative marketing federation
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Large cooperatives
IFFCO
KRIBHCO
Amul
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Joint sector
Get the benefit of private participation & Govtinvolvement .
Agricultural Business :
One of the prominent sector -8
% of Indiasimports
Govt role providing infrastructure & financialresources for agriculture
Green revolution 1970 increase in Indiaswheat production
Trade in agriculture
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Position of consumers
Preference of consumers did not matter
Labour militancy & rise of unions Pre
independence labour was exploited
AITUC & INTUC was formed soon after
independence followed by BMS & CITU
Bargaining power is strong where trade unions
are present
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Appropriate technology choices :
Time of independence- technology
underdeveloped
Man power plenty but low technical skill
Over a period of time technical & business skill
grew resulting in a gradually more complex
technology