ENVIRONMENT OF BUSINESS-INDUSTRY. INTRODUCTION :. Future of any enterprise is determined on the constant development of the enterprise. Analysis/study of environment is necessary. Various types of opportunities and dangers are included in the environment.
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As the success in personal life depends on capacity, skill and capability of a person to create cordial relations with the environment.
Factors related to Economic, Social, Technological and competition related environment business can be kept in mind in following manner while analysing the external environment:
The main thing is the proportion of present income of the public having cash or liquidityof finance, their propensity to save price level of commodities and available credit for use.
When per capita income is more , demand of commodities of primary need certainly increases, but demand of commodities of facility and comfort increases comparatively.
If more attractive, comfortable and reasonable products are available, that propensity to save will reduce.
Entrepreneur who doesnot make necessary and timely changes in his product planning and strategy regarding technology, has to face economic problems.
Developed countries spend approximately 3% of national income for research while underdeveloped countries like India, this proportion is less than even ½%.
Things produced by monopoly is the thing having “permanent speciality”.
In the present time, certain firm follow the policy of price reduction. E.g. Maruti company follow the policy of price reduction of its motorcar.
Non-price competition is more profitable for an entrepreneur.
- George Stigler
The seller has to keep in mind the reactions of rivals while deciding the price of a thing.
Environment related to population, natural environment, political environment and international environment also affects Business Enterprise.
1. Registration of small scale Industry :
- Its registeration is done in the District Industries Centre (DIC)
- Its office is situated in the headquarters of every district.
- Application is sent to the general manager in a prescribed form.
- Certain industries don’t required registeration such as wooden, flour mill, hotel, baby food, etc.
Provisional registeration is obtained before starting the enterprise, and provisional registeration number is given at that time.
Small scale registeration period is given for 5 years.
This number is necessary to get cash assistance and registeration number.
Permanent registeration is done only after the industrial enterprise starts production.
They get spared from getting licence regarding priority in raw material, import and paying deposit for government tender.
An enterprise has to present proofs like receipt of possession of industrial shed or house if they own place.
If on rented place than, receipt of rent payment, electricity connection etc.
It is not necessary to register small scale industry, though it is desirable in order to get certain benefits. Benefits are as under :
Recommendation for changing agricultural land into uncultivated land
2. Municipal licence :
Total equity capital of a company is classified into equal small parts which are called shares.
- All the debts of the company are distributed in equal, small parts like share capital. This part is called debenture.
- Issued through public issues or private placement by a company.
- Debenture is a debt with fixed interest rate, and they are to be returned after the determined period.
- As debenture is a debt, if enterprise bears loss or has less proportion of profit, it becomes inevitable to pay interest according to decided rate.
- As debenture is a long term debt, they are used to raise fixed assests.
- In India national and state development banks have been established to provide long term credit to the industrial enterprise.
- Banks give term loans for 7 to 15 years.
- Corporation working under national and state level are following :
Now, it works under the observation of managing committee appointed by the central government in which representatives of government, banks and other financial institutes have been appointed.
Thus, IDBI also carries out important activity of achievement of planning goals beside being helpful In the quick industrial development.
Also arranges for the training of managers in order to provide trained and skilled managers.
Co-operative societies and limited companies get the help of maximum 240 lakh rupees, while sole proprietorship and partnership firm get maximum assistance of Rs. 90 lakh.
An equitable mortgage contract has to be signed against fixed assets.
Special activities include establishment of new enterprise by joint sector, project-advisor, activity for development of entrepreneurship and help regarding the provision of equity finance to the industrial enterprise.