Business Environment

Revision

Functions of the State (Adopted from World Bank, World Development Report, 1997)

BasisBasis Fundamental RightsFundamental Rights Directive Principles of Directive Principles of state policystate policy

InjunctionsInjunctions Fundamental rights are Fundamental rights are negative injunctionsnegative injunctions

DPSP are positive DPSP are positive injunctions.injunctions.

JusticeableJusticeable Are justiceable.Are justiceable. Are not justiceable.Are not justiceable.

SuperioritySuperiority Are legally superior to Are legally superior to DPSP,as they are DPSP,as they are enforceable.enforceable.

DPSP are non DPSP are non enforceable.enforceable.

AttainmentAttainment Have already been Have already been attained.attained.

Yet to be attained.Yet to be attained.

BackingBacking Are backed by Law.Are backed by Law. Are backed by Public Are backed by Public Opinion.Opinion.

SuspensionSuspension Can be suspended Can be suspended during emergency during emergency under article 352.under article 352.

DPSP unless DPSP unless implemented are in a implemented are in a state of permanent state of permanent suspended animation.suspended animation.

Type of Type of democracydemocracy

Provide for political Provide for political democracy.democracy.

Aim at socio-economic Aim at socio-economic democracy.democracy.

Directive principles of state policy

Provisions dealing with welfare (Art. 38, 42, 45, 47)

Provisions dealing with social justice/ (Art. 39, 41, 43, 46)

Provisions promoting democracy (Art. 40, 44, 45)

Miscellaneous provisions relating to environment etc., (Art. 48, 49, 50, 51)

Significance of DPSP

DPSP are backed by public opinion.Provide for a welfare state.Importance as Moral Ideals.Directives constitute a Guide for the State.Source of continuity in policies.Are supplementary to fundamental rights.Yardstick for measuring the Worth of the

Government.Helpful in interpretation of the Constitution.Ambiguity of Directive Principles is useful.

Technology –TQM, FMS, BPRETQM-Total Quality Management refers to

deep commitment of an organization to QUALITY

Principles of TQM:Meet the customer’s requirement on

time, first time and 100% of the time.Strive to do error-free workManage by prevention not correctionMeasure the cost of quality• DEMING Prize-TVS Motors, Mahindra &

Mahindra

Flexible Manufacturing SystemBy product of technologyIntegrates computer aided design,

engineering and manufacturing to produce low-volume products for customers

Machines are designed to produce batches of different products

Rewriting the laws of economies of scale FMS – firm needs to train workers for higher

level skills

Business Process ReEngineeringMichael Hammer-Father of Process

ReEngineeringInvolves starting all over from scratchRejects irrelevant processesDriven by top managementCut down costs, eliminate waste, improve

prodcut qualityBPRE-implications on employees with poor

skillsImproves interaction with customers &

suppliers, offers greater challenge, increased responsibilities & higher pay.

Technology TransferIs the process by which commercial technology is

disseminated.Two types-Internalised & Externalised forms of TTInternalised TT-refers to investment associated

TT, control resides with the transferor. Significant & continuing financial stake in the affiliate, lets it use brand names, access to global technology & marketing networks etc

Externalised TT- lack the above features,refers to local control, joint ventures, licensing, international subcontracting, strategic alliances etc

Technology Transfer-LevelsOperational Level-bottom level, needed for

operating a given plant; manufacturing skills, troubleshooting, quality control, maintenance and procurement.

Duplicate Level-intermediate level, duplicative skills; investment capabilities to expand & purchase/integrate foreign technologies

Adaptive Level-Technological Self-Reliance level; imported tech adapted & improved, complex skills of design & engineering

Innovative Level-creativity and innovative skills based on formal R & D; generate new technologies, extend tech frontiers.

Technology Transfer-MethodsTraining or Employment of Technical ExpertContracts for Supply of machinery &

equipmentLicensing AgreementsTurnkey Contracts

Manifestations of GlobalisationConfiguring anywhere in the worldInterlinked and independent economiesLowering of Trade & Tariff barriersEffect on related industries & ancillariesInfrastructural resources & inputs at

international pricesIncreasing trend towards privitisationEntrepreneur with a central economic roleMobility of skilled resourcesMarket-side efficiencyFormation of regional blocks