Bba i 1 intro to business

1. Chapter 1 Introduction to Business 2. Introduction & characteristics of Business  Introduction of Business  Types of Business  Objectives of Business …
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  • 1. Chapter 1 Introduction to Business
  • 2. Introduction & characteristics of Business  Introduction of Business  Types of Business  Objectives of Business  Requisites of a Business  Social Responsibilities of Business
  • 3. Human Activities Economic activities Non-economic activities
  • 4. Business  “Being busy”  For-profit  Sole proprietorship  Partnership  Limited liability  Corporations  Not-for-profit  State-owned
  • 5. Objective of Business Economic Objective Earning fair profits  Incentive to businessman  Serves as a measure of success  Imp instrument for expansion  Essential to very existence / survival of business  Help in creating goodwill To create customers To undertake innovation
  • 6. Objective of Business Social Objective – Sufficient supply of Goods at reasonable price. Fair Deal to employee Fair return to investors Fair Deal with suppliers Customers & Competitors To act as good citizen
  • 7. Types of Business (1) INDUSTRY  Extractive (Mining)  Genetic (Dairy farming)  Manufacturing (Steel, furniture)  Construction (Road, buildings) COMMERCE  Trade (Wholesale, import-export)  Ancillary Services –  Transportation (Land, air, water)  Banking (money deposit and lending)  Insurance  Warehousing  Advertising
  • 8. TYPE OF BUSINESS INDUSTRY COMMERCE GENETIC (Animal Husbandary) TRADE (Wholesale IMP/EXP) EXTRACTIVE (Mining) ANCILLARY (Communication Financial Mktg etc)
  • 9. Non-economic activities  Personal satisfaction (hobbies)  Physical requirements (sports, going to gym)  Social obligations (cooking food for family)  Religious obligation (worshipping God)  Love and affection (dinner with friends and family)  Patriotism (Freedom-fighters)
  • 10. Business as an Economic Activity  Objective: Sell goods/services for profit.  Use, payment of scarce resources  Capital (own, borrowed)  Men (employees)  Materials (procurement, processing)  Satisfy needs of businessmen and the general public (needs, wants).
  • 11. Objectives of Business 1. 2. 3. 4. Economic Social Human National
  • 12. 1. Economic objectives  Profit earning (personal need, growth and expansion)  Customer creation  Innovation (new product, process, distribution, materials)  Best possible use of resources (raw material, machine, manpower)
  • 13. 2. Social objectives  Right quality at reasonable price  Avoiding hoarding, overcharging, adulteration, misleading     ads Employment generation Welfare of employees Avoidance of slums and pollution (air, water) General welfare of society
  • 14. 3. Human objectives  Fair remuneration  Working condition and environment  Job satisfaction  Growth  Future security  Training and development  Help society, economically backward and handicapped persons
  • 15. 4. National objectives Social justice National priorities Exports, foreign exchange reserves Imports substitution
  • 16. Role of Profit Means of livelihood Increases volume of business Index of performance Reward for risk bearing Helps to gain reputation
  • 17. Requisites of Business  Well Defined Objective  Proper Planning  Proper Location, Layout & Size of Business  Adequate Finance  Sound Organisation  Efficient Distribution System  Efficient Management  Maintenance of Better Relations with Employees  Research Facilities
  • 18. Recent Issues Corporate Social Responsibility Business Ethics
  • 19. CSR towards…  Investors  Employees  Consumers  Suppliers  Government  Community and society  Competitors
  • 20. Need for CSR  Long-term interest of business  Public image  Avoidance of government regulations  Moral justification  Consumer‟s awareness (Consumer Protection Act, 1986)
  • 21. Few Issues of CSR  Environmental protection  Equal employment opportunity  Minimum wages  Occupational safety and health  Truth in advertising
  • 22. Chapter 2 Individual & Sole Proprietorship
  • 23. Syllabus  Objective  Introduction to Individual / Sole Proprietorship  Merits  Limitations  Partnership Organisation       Basic Features Types of Partners Registration of Partnership Rights & Duties of Partners Dissolution of Partnership Advantages & Disadvantages of Partnership  Sole Proprietorship & Partnership In India
  • 24. Sole Proprietorship  Business owned by one person, established, Financed, managed with utmost freedom by an individual eterprenuer  Most Natural  Oldest  Simplest  Most popular  Owner bears all risk  & receives the entire gains
  • 25. Sole Proprietorship  Merits  Limitations  Easy & Simple Formation  Limited Financial Resources  Smooth Management  Limited Managerial Ability  Promptness in Decision  Unlimited Liability making  Personal Touch with customers  Secrecy  Lack of Continuity  Possibility of Expansion Limited
  • 26. Partnership Org  Partnership Orgn has grown out of necessity to arrange more capital, provide better skill, control and management to take advanctage of high degree of specialization and division of labour  2 or more persons agree to carry out lawful bsuiness and share the profits on agreed basis  There should be an agreement between them (legally be able to carry out contract)  Motive to share profits  Must be carried out by one or all of them
  • 27. Partnership (Basic Features)  Number of Persons  Contractual Relationship  No Legal Distinction Between Firm and Partners  Profit Motive  Partner as Principal as well as agent.  Test of Existence of Partnership  According to Indian Partnership Act 1932 “The intentions of the parties concerned have to be ascertained. It also has to be seen whether these I san agreement between them, whether express or implied, oral or written.
  • 28. Types of Partners  Active Partners  Sleeping Partners  Nominal Partners  Partners in Profit only  Retired or Outgoing Partners  Incoming Partner  Minor as a Partner  Partner by Estoppel or Holding Out
  • 29. Registration of Partners  Indian Partnership Act 1932  Optional  Limitations to unregistered firms  Registration Procedure  Name of Firm  Principal Place of Business  The name of places where it carries business  Date on which each partner joined the firm  The names in Fund and permanent addresses of partners  The duration of the firm
  • 30. Rights & Duties of Partners  Right to Management  Right To inspect Books of Accounts  Right to continue unless expelled  Right to be indemnified for expenses on behalf of the company  Right to Profit  Right to property & its use  Heir of the Partner in case of death
  • 31. Duties of Partners  Duties to conduct business  To act bonafide (good Faith)  To see that partnership property is not used for private  Every Partner should contribute to losses equally  Indemnify the firm if any losses occur due to him  Must maintain correct accounts  Should not assign his interest in the firm to 3rd party w/o consent of partners
  • 32. Implied Authority of a Partner as an Agent  A partner is an agent of the firm, his acts bind the firm  Sell Purchase  Receive / Make Payments  Make appointments HR  Execute Documents  Borrow Lend
  • 33. Can’t do following due to Implied Authority of a Partner as an Agent  Submit a dispute relating to the business for arbitration  Open bank acc on behalf of firm in his own name  Compromise or relinquish any claim or portion by the firm  Withdraw a suit or proceeding on behalf of firm  Admit any liability  Acquire any immovable property on behalf of the firm  Enter into partnership on behalf of the firm
  • 34. Dissolution of Partnership (auto)  Implies the end of original partnership agreement, not the firm.  Disso of partnership may take place automatically  At the expiry of the period  At the completion of the venture for which it was formed  At death  At Insolvancy  Or retirement of a partner
  • 35. Dissolution of Partnership  When a partner gives notice to that effect in case of partnership at     will When all partners give consent for disso When all partners of the firm or barring one becomes insolvent When the business of the firm becomes unlawful And if court passes an order
  • 36. Dissolution of Firm thru Court  Any partner can move to court for disso & court can order disso  On Lunacy of a Partner  On permanent Incapability of a partner  On misconduct of a partner  On breach of Agreement  On transfer of Interest  On recurring losses  On any other reasonable ground
  • 37. Sole Proprietorship & Partnership In India  Most accepted formats of business in India  Pop is poor, Little capital, small ventures  Conservative, Don‟t risk their savings, prefer small commercial      ventures Low infra and slow growth still makes these 2 formats most accepted Brings in regional development, reduces concentration of wealth Reduces unemployment. Tax woes not present Local market flavor still exists
  • 38. Chapter 3 Introduction of Public Enterprise
  • 39. Syllabus  Intro of Public Enterprise  Definition & Objective  Characteristics of Public Corporations  Govt. Companies  Public Enterprises in India  Problems of Public Enterprises  Some Specific Problems of Public Utilities
  • 40. Pre Independence & 5 years on  Railways, Ports, Communications, Broad Casting, Irrigation & Power Sector  No clear objective of Govt  Industrial Policy Resolution 1948 demarcated certain sectors.  State to play a role on development of industries Assignment -- Find out the Public Sector Enterprises during 1940-1955?
  • 41. Definition & Objective  Public Enterprise means state ownership & operation of Industrial, agricultural, financial, and commercial undertakings” A H Hanson.  PE are autonomous or semi autonomous corporations and companies established and owned and controlled by the state engaged in industrial and commercial enterprises” M N Mallaya  Public Ownership, Public Control and Public Interest rather than profit.
  • 42.  Planned Development Objectives of PE  Balance Development  Acceleration of Rate of Economic Development  Provision for Infra Facilities  Balanced Regional Development  Provision of Funds for Development  Revival of sick units  Regulate concentration of wealth and Power  Prevention of monopolistic tendencies  Provision of Greater Employment Opportunities  Helping Defense in Countries  Achieving Self Sufficiency  Encouraging Import Substitution  Necessary Goods & Services
  • 43. Characteristics of PE  Wholly Owned by State  Created by special law, defining powers, duties and       immunities. Autonomous Nature Seed Capital by State Self Financed further Exempted from many regulations Not subject to budget, accounting and audit laws Servants are recruited, remunerated under special terms and conditions
  • 44. Govt Companies  As an alternative to PE, Govt Companies are popular in India  Body Corporate under a general law (Comp Act 1956)  The whole of Capital Stack is 51% or over by Govt of India  Directors from Govt of India  It can sue, get sued, contract, agreement, acquire property in      its own name Created by Executive decision and not legislature Articles of Association can be drawn, revised by Govt Seed Cap by Govt Exempt from Govt Audit Employee not civil servants
  • 45. Reasons for adoption of this form  Salvage Financial Crisis  Emergency  Need of sector  National / International Interest  Misc Interest Assignment – Study how oil companies in India were formed?
  • 46. Criticism of PE  It evades constitutional responsibilities compared to special powers granted  Company Law becomes fictional  Shareholders Dumb as Govt is the supreme authority to decide  Extent of Autonomy could have been reduced
  • 47. Public Enterprise in India  29 Crores in 1950-51 to 21.226 Crs in March 1981  5 to 199 PE at 1981  146971 Crs in March 1993 Assignment -- Make a developmental chart of PE from 1950 – 2010 on an A4 Sheet.
  • 48. Problems of PE  Poor Planning  Bad Financial Planning  Heavy Overheads  Faulty Production, Planning & Utilization Capacity  Over Staffing  Absence of Healthy Ind Selections  Lack of Autonomy in Mgmt  Problem of Incentive  Growing Sickness  Privatization and Dis-investment
  • 49. Introduction of Public Utilities  Estb for supply of essential products or services, operating in limited market areas on monopolistic or semi monopolistic market conditions  Gas, Electricity, Water, Rail, Transport etc.  Competition in such sectors undesirable, duplication, and unsatisfactory catering of consumer needs
  • 50. Characteristics of PE  Supply of Essential Products / Service  Unduly Heavy Fixed Capital  Inelastic Demand  Non Transferability of Demand  Limited Market Area  Natural Monopoly  Regulation of their working
  • 51. Specific Problems of PU  Plant Location (No Choice, rely on local auth or state to acquire land.  Size ( require Huge Capital, requires large size for EOS)  Ownership and Management (Regulated by app public authority – local or National DNCR  Marketing – Employees attitude take it or leave it.  Political Scenario – Changes policy and long term objective of PU
  • 52. Chapter 4 Competitive Priorities
  • 53. Syllabus  Introduction  Competitive Priorities Objectives  Competitive Priorities Factors affecting plant layout  Competitive Priorities Benefits  Competitive Priorities Weaknesses  Competitive Priorities Functional Layout for Process focused systems
  • 54. Competitive Priorities Introduction  It talks about the way products / services are manufactured  Market (Oil)  Processes (Ship Building)  Technology (BHEL)  Elements of Labor Space and Equipment Needs for Public Enterprise.
  • 55. Objectives of Good Plant Layout  Proper Efficient & Economic handling of materials  Economic Utilization of Floor Space  Increased Turnover of WIP & reduction in amt of GIP  Speedy Disposal of work / Admin  Avoid Process Hindrances  Efficient control over various production  Efficient utilization of machinery and labor  Min Cost of Production
  • 56. Factors affecting plant layout  Management Policies
  • 57.  Policy re volume and size  Managerial emphasis on quality  Policy to attain flexibility & adaptability  Policy to achieve delivery to customers  Purchasing policy  Policy re more facility to employees
  • 58. Plant Layout affecting factors  Plant location  Climate and environment  Nature of Products and type of Industry  Sequence of operation  System of production  Available Floor Space  Requirement & maintenance of equipments  Achieving Balance  Achievement of Optimum Flow & min Movement  Flexibility Approach
  • 59. Effective Plant Layout Benefits  Improved Production Process  Higher Production Capacity  Min Materials Handling  More Efficient Utilization of Machinery & Labor  Reduction in Amount of Goods in Processes  Good Production Planning & Control  Improvement in Supervision  Increased Safety & Work Conditions
  • 60. Effective Plant Layout Weaknesses  Bad Production Process  Low Production Capacity  Unmanaged Materials Handling  Under Utilization of Machinery & Labor  Cumbersome Processes  Good Production Planning & Control  Bad Supervision  Decreased Safety & Work Conditions  Higher Costs  Inadequate Storage
  • 61. Assignment  Study & Describe Functional Layouts of following  Machine Shop –  Assembly of a Ship  Hospital  Municipal Office  Draw the Line Layout Pattern for Product Focus
  • 62. Chapter 5 Company Law Management in India
  • 63. Syllabus  Introduction  Company Management in India  Shareholders  Board of Directors  Chief Executive  Managing Director  Manager  New Pattern of Company Management Introduction
  • 64. Company management  In case of sole proprietorship, the business is owned by on person operated for ones own profit.  In partnership all the partners or few of them take the responsibility of managing the affairs of the firm.  In case of corporation which is owned by share holders is not managed by them.  The shareholders in annual general meeting elect the board of directors who manage the company.  The board of directors is the top organ of the company.
  • 65. share holders elect board of directors appoint chief executive finance production purchase sales manager manager manager manager
  • 66. Share holders  The share holders are the owners of a public company.  Due to separation of ownership from control, the      shareholders do not take part in management of corporation. They are greater in number and are scattered in different part of country. Most of them possess few shares individually, they are interested in receiving the dividend and are least concerned with management. Majority of shareholders are ignorant of the operation of the company. They have no time to attend the annual general meeting. Most of them have loose association with company they sell the shares In case they receive no dividend or less dividend.
  • 67. Rights of shareholders  In case of company the shareholders are owners but the management is controlled by the board of directors.  There are certain rights which have been given to shareholders.  These rights are grouped into two broad categories.  Individual rights and group rights.
  • 68. Individual rights of shareholders  He is entitled to receive dividend as declared by the        company. He can sell his shares free in the stock market. He possesses the voting rights in person or by proxy. He can freely take part in policy making process of company in annual general meeting. On the death of shareholder the share will be transferred to the dependants. He can inspect company books and record as per articles of association. He can receive a copy of the minutes of the general meeting. He has the right to share in the assets of the company on dissolution.
  • 69. Group rights of shareholders  They as a group determine objectives and policies in annual      general meeting. They have the right to discuss, approve or disapprove the work done by the board of directors. The share holders have the right to discuss directors report, profit and loss account and balance sheet of the company in the meeting. The shareholders elect the directors in the annual general meeting. The share holder have the right to declare dividend at the rate recommended by directors. They have no right to increase the rate of dividend as recommended by the directors. If situation arise to discuss some issue urgently and cannot be postponed to next annual general meeting, they ask board to call an extra-ordinary meeting.
  • 70. Directors of company  In company form of organization, the ownership is separated from management.  The shareholder who are the owners of the company elect the board of directors in the annual general meeting.  The elected board called the board of directors is the governing body of the company.
  • 71.  In company form of organization, the ownership is separated from management.  The shareholder who are the owners of the company elect the board of directors in the annual general meeting.  The elected board called the board of directors is the governing body of the company.
  • 72. POWERS OF DIRECTORS  The directors of a company by passing a resolution shall exercise the fo
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