Business Environment

Subject Code: HBBA17017

Importance of stock exchanges

E-government

Definitions:

E-government range from “the use of information technology to free movement of

information to overcome the physical bounds of traditional paper and physical based
systems” to “the use of technology to enhance the access to and delivery of government
services to benefit citizens, business partners and employees.”

Types of E-government transactions

E-government services focus on four main customers: citizens, business community,

government employees, and government agencies. E-government aims to make interaction
with citizens, businesses, government employees, government agencies and other
governments more convenient, friendly, transparent, inexpensive and effective.

In an E-government system, individuals are able to initiate a request for a particular

government service and then receive that government service through the Internet or some
computerized mechanism. In some cases, the government service is delivered through one
government office, instead of many. In other cases, a government transaction is completed
without direct in-person contact with a government employee.

Specific types of services types of E-government

There are four types of E-government services:

 Government-to-Citizen (G2C).
 Government-to-Business (G2B).
 Government-to-Employee (G2E).
 Government-to-Government (G2G).
 Government-to-citizen G2C

Its includes information dissemination to the public, basic citizen services such as license
renewals, ordering of birth/death/marriage certificates and filing of income taxes, as well as
citizen assistance for such basic services as education, health care, hospital information,
libraries, and the like.

Case 1: Singapore's E-citizen Portal: A Case Study in G2C Transactions. Through

Singapore’s E-citizen portal, Singaporeans are able to access about 1,600 Eservices
pertaining to business, health, education, recreation, employment, and family. Of this, 1,300
E-services are completely transacted by citizens with government online. The E-citizen portal
is divided into categories based on the real-life needs of every individual, with every single
ministry and statutory board providing E-services through the same portal. Singaporeans thus
have one-stop access to government services; they are spared having to navigate through the
bureaucratic jungle. A few of the popular E-services are the following: submitting application
forms for purchase of apartments, searching for school information, employment search,
career development, and voter registration. As of June 2002, about 77% of public services
deemed feasible for E-delivery were enabled for online delivery.

 Government-to-business G2B

The transactions include various services exchanged between government and the business
community, including dissemination of policies, memos, rules and regulations.

Business services offered include obtaining current business information, downloading

application forms, renewing licenses, registering businesses, obtaining permits, and payment
of taxes. The services offered through G2B transactions also assist in business development,
specifically the development of small and medium enterprises (SME).

Simplifying application procedures that would facilitate the approval process for SME
requests would encourage business development. On a higher level, G2B services include E-
procurement, online government-supplier exchange for the purchase of goods and services by
government. Typically, E-procurement Web sites allow qualified and registered users to look
for buyers or sellers of goods and services.

Depending on the approach, buyers or sellers may specify prices or invite bids. E-
procurement makes the bidding process transparent and enables smaller businesses to bid for
big government procurement projects. The system also helps government generate bigger
savings, as costs from middlemen are shaved off and purchasing agents’ overhead is reduced.

 Government-to-employee G2E

The services encompass G2C services as well as specialized services that cover only
government employees, such as the provision of human resource training and development
that improve the bureaucracy’s day-to-day functions and dealings with citizens.

 Government-to-government G2G

The services take place at two levels: at the local or domestic level and at the international
level. G2G services are transactions between the central/national and local governments, and
between department-level and attached agencies and bureaus. At the same time, G2G services
are transactions between governments, and can be used as an instrument of international
relations and diplomacy.

Goals:

The Working Group on E-government in the developing world has identified five broad
categories of goals commonly pursued for E-government. E-government is a means to
accomplish these broader social goals, goals that move beyond mere efficiency of
government processes to that of overall reform and development. The goals are not listed in
any particular order of importance, as each country must determine its priorities in E-
government.

 Creating a better business environment.

  Customers online, not in line.
 Strengthening good governance and broadening public participation.
 Improving the productivity and efficiency of government agencies.
 Improving the quality of life for disadvantaged communities.

Advantages of E-Government:

 Reduction of customers’ and organizations’ time, effort and costs.

 Improvement of service delivery and citizens’ satisfaction.
 Increase of users’ ICT skills, internet knowledge and computer usage.
 Creation of new business and work opportunities.
 In addition, E-government implementation has many advantages such as:
Improvement of efficiency of government agencies in data processing.
 Improvement of services through better understanding of users’ requirements, thus
aiming for seamless online services.
 Sharing information and ideas between all government agencies and department to
build one mega database.
 Assisting in reaching government’s economic policy objectives by promoting
productivity gains inherent in ICT and e-commerce.
 Improvement of transparency, accuracy and facilitating information transfer between
government and customers.
 Assisting in building trust between governments and citizens.
 Essential factor in good governance by using internet-based strategies to involve
citizens in the policy process, illustrating government transparency and
accountability.
 To conclude, it is clear that implementation of E-government saves resources, effort
and money but it can also extensively increase service quality levels and reduce time
spent in government departments.
Basic objectives of Economic Planning

Objectives of economic planning:

 In general terms, it may be stated that the basic objective of an economic planning is
rapid economic development of the country and to fulfill all social needs.

 The basic objectives of economic planning are realized through economic plans
formulated for the purpose.

 All countries of the world adopt planning with specific objectives and most of the
countries spell out the objectives as follows
 Higher National Output

 The foremost objectives of economic planning is higher national output.

 Most of the backward economies would be impoverished because of poor national

output and the per capita output will be very low when compared to the population
and requirement of the people.
 Rapid Industrialization

 The master key for economic development lies in the industrialization of the country.

 The economy may have potentialities for producing plenty of goods. But due to lack
of industrialization, the powers of the economy will remain dormant and the economy
will be condemned as backward.
 Modernization of Agriculture

 In many of the backward economies, agriculture will be the basic sector and the entire
economy would revolve only on agriculture and raw materials produced out of
extractive industries.

 There will be unemployment with heavy pressure of population in the agricultural

sector. The productivity will be very low.
 Without modernizing agriculture, industrial development will not prove successful.

 An agrarian revolution should precede industrial revolution. This is another important

objective of planning.
 Stability of the Economic System

 Internal and external stability of the economic system should be ensured for the
smooth working of the system.

 In an unplanned economy under capitalism, the economy would be subject to violent

fluctuations; the depression and boom would jeopardize the functioning of the
economy.
 Optimum Utilization of Productive Resources

 Under unplanned system, resources will be utilized by the private sector for profit and
consequently the resources will get mutualized.

 The presence of competitive market will also result in over utilization of resources.

 There will not be optimum utilization of the scarce resources of the economy.

 This can be done only by means of judicious allocation under planning.

 Reduction of Inequalities of Income and Wealth

 This is one of the most important objectives of economic planning.

 Economic development and consequent greater output may not benefit the poorer
classes.

 The fruits of economic growth may fall in the laps of the already affluent classes as
was the case in Indian planning.
 Standard of Living

 The object of planning is not merely production but also proper distribution of the
product to uplift the standard of living of the common people.

 Planning attempts to distribute he product to the weaker sections of the society.

 Balanced Growth

 This is also another objective of planning. Some regions will be backward due to
climatic and geographical reasons.

 The object of planning is to develop the backward regions economically and socially.

 This can be done only by deliberate planning and investment in the ‘private sense’ but
social return in the ‘welfare sense’.
 Full Employment
  Solving the unemployment and under employment problems will be one of the main
tasks of planning objectives.

 The genesis of the problem of unemployment can be traced to the disequilibrium

between demand for and supply of manpower.

 The task of ‘manpower planning‘ in the national context is to match manpower supply
and manpower demand, quantitatively and qualitatively.

 To a very great extent unemployment results from absence of such manpower

planning.
 Self-Sustained Growth

 The ultimate object of planning is to make the economy self-reliant and there will be
self-sustained economic growth without foreign assistance.

 At this stage, the economy can produce anything it likes. This stage can be achieved
only by effective planning.

 All the above objectives need not be taken up simultaneously.

 Different objectives may be emphasized by planning authorities at different times

depending on social need and economic policies.
Government’s Role in Influencing Business
1. conce Concept and nature of business environment.
+

Classification of business environment

Important Objectives of business

Profitability –

This is one of the most important objectives of business. We normally setup business to
achieve profits for its owner or shareholders. But, does it mean that business should
somehow, by hook or crook, earn the profit? Our answer is no; it should earn profit by
working under rules and regulations or by following ethical practices.

Growth –
Another important objective of business is to achieve growth. The growth should be in terms
of increase in profit, revenue, capacity, number of employees and employee prosperity, etc.
Stability –
Stability means continuity of business. An enterprise or business should achieve stability in
terms of customer satisfaction, creditworthiness, employee satisfaction etc. A stable
organization can easily handle changing dynamics of markets.
Efficiency –
An efficient or aggressive working environment. A business should always try to achieve the
best in its field. Efficiency is considered in terms of labour productivity, energy consumption,
quality control etc.
Survival –
A business should have the capability to survive markets jolts or shocks. A business should
be there with a vision of long-term existence.

Business Objectives may be broadly classified into three categories:

 Economic Objectives
  Social Objectives
 Human or Individual Objectives
 Economic Objectives:
Business is an economic activity and its objectives are mainly economic in nature.
The main economic objectives are:
(i) Profit Earning –
Every entrepreneur undertakes business activities primarily to earn profits. No business can
survive for long without earning sufficient profits. A business needs profits not only for its
existence but also for expansion and diversification.
Profits provide a means of livelihood for the entrepreneur and a reward for bearing the risk.
(ii) Survival –
Every business aims to ensure that it continues to survive and exist in the future. Survival is
possible only when organisation is able to earn enough revenue to cover its costs.
(iii) Growth –
A business needs to add to its prospects in the long run. For this, the business must grow and
expand to survive in the long rim.

 Social Objectives:
Social objectives refer to the objectives, which are desired to be achieved for the benefit of
the society. Business makes use of scarce resources of the society. So, society expects
something in return for its welfare. Social objective deals with fulfilling obligations towards
the society.
Some of the major social objectives are:
(i) Supply of Quality products at Fair Prices –
The business should ensure that there is a regular supply of useful products with fair quality
and at reasonable prices. Supply of adulterated goods, inferior quality goods, unusable or
harmful products are detrimental to the survival of business. It must be noted that customer is
now more educated and quality conscious and expects value for his money spent.
(ii) Avoidance of Unfair Trade Practices –
Business enterprise should not indulge in anti-social and unfair trade practices like black
marketing, hoarding, adulteration, etc. Such practices are not only illegal but also hamper the
image of business community. So, every business organisation should aim to avoid such
undesirable activities.
(iii) Generation of Employment Opportunities –
Every business enterprise should create sufficient employment opportunities without any
discrimination as to caste, religion, sex, etc.
In India, unemployment is a serious problem and the business community can play a
dominant role in solving this problem.
 (iv) Protection of Environment –
Business enterprise should take all reasonable steps to check and protect environment. It must
make proper arrangement for disposal of effluents, smoke, wastes, etc. in order to avoid
various types of pollution.
(v) Community Service –
Many business organisations engage in various community services, like setting up schools,
charitable dispensaries, donating money for social and religious activities, etc. Fulfillment of
this objective helps to improve the reputation and public image of business.
(vi) Welfare of Employees –
No business can succeed without the contribution of its employees. Thus, business should
aim to provide fair wages and reasonable working and living conditions to workers.

 Human or Individual Objectives:

Human or individual objectives refer to the objectives related to the individual needs of the
employees of an organisation. As employees are one of the most valuable resources for an
organisation, satisfaction of their objectives is very important.
Individual objectives include the following objectives:
(i) To provide healthy and safe working conditions.
(ii) To pay fair and competitive salaries and perks.
iii) To provide opportunities for personal growth and development of employees.
(iv) To provide reasonable security of service.
(v) To provide various financial and non-financial incentives in order to motivate the
workers.
(vi) To encourage employees to take initiative and participation in management.

Analyse the impact of technology on business environment.

Business needs if we are required to run any kind of the business in the world we may need
lots of the technology factors along with it. Business technology in the small businesses can
also mean different things can be interpreted in various ways of doing it normally. But it will
always come down to the same thing – the technology implemented and used by a business
must provide the maximum amount of efficiency for the minimum amount of cost and
maintenance.
Technology business must be well planned and implemented in a sensible manner and a plan
for technology management must be developed and adhered to. This may mean moving more
of your business systems onto the internet to increase the mobility of your business, or
identifying and investing in new systems which will do the same job but in a more efficient
manner.
Factors Are Involved In Modern Technology Business
Basically business is based on lots of things in the world like we may need some kind of the
computer technology factors and some of the latest traveling agencies to moving around
carriages in the world. So as the technology is not the particular thing that is to all small
business essentials. Now you must deal with the other things as the competition and rivalry
with the people along with you.
 Solar Power Projects
 Energy Saving Efforts
 Modern Electronic equipment’s
 Social Awareness of computer technology
 Modernize the things for promotion
 Attraction of the Information Technology through your business
Exactly with such things we can nicely have to understand the importance of business and
also promote our business in all around the world successfully. Sometimes business needs
such things for having more profit and money which is gain by the trade respectively.
How the Internet Technology Support My Business

If the people are exactly looking to save some kind of the money for the business then
internet is the thing which is place to start with and may be your businesses include some call
centre to provide customer services. It is completely based on the things which are being
endorsed with the mails and through the different social media accounts in all around the
world. Modern computer technology will show us the way for promoting your business
through the internet.
Ways of Technology for Changing Business in World

World of the business and different companies also stayed pretty much as the same for the
century so after the industrial revolution but is good and safe to say that is happening.
Exponential rate at which the technology is developing mutating and adapting is so fast that
you cannot give support to be swept away. Real things for endorsing the brands of all around
the world for quality of the business are essential thing.
Solar Energy Technology Impacts on Business

As differently technologies of the business has just revolutionized the way of companies and
conduct the trading too. Some kind of the small businesses and little companies having some
kind of difficulties to get to develop more and more so that energy and solar power are
demanding very effectively. Some of the solar energy technology is prompting to make
business successful very effectively.
Now the owners of the small business projects can also use this technology to reduce the
business costs and expenditures nicely. They are also thinking to improve their earning by
saving the money from lots of other unnecessary expenses. Business technology can support
small business perk up their communication process and email, texting and personal digital
products improve.

How technology affects business environment:

Diminish security risks

Every business that has an online presence is always subject to security risks. This is why
business hire the best of security specialists to prevent cyber-attacks. In the quest to get the
best output of your work, businesses rely on technology and smart machines to get tasks
done. Every business action is automated these days, reducing human labour.

Business growth
Technology is helping businesses grow at a much faster rate than when technology was not
available. From automated communication ad Chat Bots to automated marketing, technology
plays a big role in helping a business grow. They help in boosting sales and generating more
revenue. Many technology trends that are buzzing these days are Block chain, Internet of
things etc.

Online presence
When it comes to social media, it is important that a business targets social media channels
that are aligned with the nature of the business.
Tools that help you identify preferred content, optimum time of posting, automated posting,
location-specific targeting etc are helping establish your business better in the online world.
Technology plays a big role in helping establish your business online. Tools like Google
Analytics, Hoot Suite etc are great examples of this.
To have a fantastic engagement with the audience, you need technology and some best online
tools to help you target the correct audience.

Online disasters
Every business that has an online presence has felt the requirement of technological
assistance in the routine tasks that a business performs. There also have been cases, when a
business has felt the ravage of technology.
It would be correct to say that technology has both pros and cons. With pros being a
reduction in human interference. The cons, however, include breaks in technology that cause
a certain mishap. There are cases when there have been mishaps because of a loop in the
functioning of technology.

Analyse the responsibilities of business towards its employees.

Social attitude:
Discuss the relationship between government and business?

The term responsibility, accountability, obligation or duty is all used interchangeably in the
context of relations between Government and business.

Responsibilities of Business towards Government:

The Government has certain definite expectation from business.

The business houses are expected to fulfil the following responsibilities:

1. Regular Payment of Taxes:

Taxes are a major source of revenue for the Government. It is the responsibility of every
businessman to pay regular taxes on sales, inputs and income. Moreover, it is the duty of the
businessman, as an employer, to deduct the income tax from the salaries of the employees
and remit the same to the government treasury.

2. Voluntary Programmes:

Another expectation of the Government from the business is that the business firms should
cooperate with Government agencies on voluntary basis in connection with various
programmes.

Business and Government Relationship

Business and Government

Relationship

Government and business institutions in a country in many ways are interrelated and
interdependent on each other. In today’s global economy, businessmen and
entrepreneurs are the driving forces of the economy. In the planned economy or even in
the market economy government holds control of shaping the business activities of a country.

For maintaining a steady and upward economic growth. The Government must try to make
the environment for business organizations suitable. And the organizations must follow
the laws of governments’ to run the businesses smoothly and making sure there is a level
playing field.

The main goal of businesses is to make a profit and governments’ goal is to ensure
economic stability and growth. Both of them are different but very co-dependent. For this,
the government and organizations or businesses always try to influence and persuade
each other in many ways for various matters. A balanced relationship between the
government and businesses is required for the welfare of the economy and the nation.
Furthermore‚ the relation between government and business can be explained by the
following points.

Role of government towards business sectors/Government relation with business

The role of the government towards business can be viewed in three categories:

As a business promoter

As a business regulator

As a business caretaker

Promoter

Government promotes business in the following ways:

Infrastructure and manpower development: Government provides the facilities like

transportation‚ information technology‚ communication, water supplies‚ waste disposal‚ civic
amenities facilities‚, etc. Besides‚ the government also conducts different educational and
training programs for the development of technical and professional manpower in the nation.
These activities facilitate business development.

Public enterprise: The government establishes different trading and manufacturing

organization to deal with essential goods and services. They play an entrepreneurial role in
setting up industries.

Source of information: Since‚ the government is the largest organization in a country‚ it has
abundant information that can be used in business. Thus‚ the government acts as a source for
information and provides to the business.

Financial Assistance: The government provides low-cost finance through its financial
institutions like Nepal Rasta Bank‚ Provident fund‚ Citizen Investment fund‚ Agriculture
development bank, etc. for industries.
Incentives and subsidies: The government facilitates business by providing subsidies to the
growing and sick industries. It also provides incentives to the business producing essential
goods and services to maintain low cost to the people

Regulator

As a regulator government formulates different rules and regulations to operate the

business smoothly. Businesses much comply with such regulations. The different business-
related regulations are Private Firm, Registration Act‚ Trade union Act‚ Company
Act‚ Labour Act‚ Food Act‚ Foreign Exchange Regulation, etc. Besides, ‚there are
different policies such as Monetary  Policies‚ Fiscal Policy‚ Trade
Policy‚ Industrial Policy, Solicitors Marketing etc government enacted for the development
of business.

Caretaker

As a caretaker government provides protection from the political risk factors such as
extortion‚ band‚ unrest etc. Apart from that‚ it formulates and implements strict rules and
regulations to protect intellectual property rights.

Role of business towards the government/ Business relation with government

Business plays a vital role to support the government. They are as follow:

Payment of taxes: Taxes are the major revenue to the government. Business organizations
pay various taxes to national and local governments. Besides‚ businesses also assist the
government in the collection of taxes by deduction tax at source on salary and other payment.

Rendering of advice: Business organizations work side by side with the government to help
in the formulation of different effective business plans and policies to develop sound
economic conditions of the nation.

Source of information: Business organization provides valuable information regarding the

current business trend and problems‚ which is helpful in better decision making by the
government

Execution of contracts: Businesses help the government to execute its different

developmental projects and programs. It also renders supplies and materials for the better
functioning of the government.
Outline of IDBI bank in detail

IDBI: Industrial Development Bank of India

IDBI stands for Industrial Development Bank of India. It is an Indian government-owned
financial service company, headquartered in Mumbai. It was formerly known Industrial
Development Bank of India. It was established in 1964 to provide credit and other financial
facilities for the development of Indian industry. Currently, it is one of the largest commercial
banks of India which offers personalized banking and financial solutions. In the term of
reach, it is 10th largest bank of the world. It has 2912 ATMs, 1602 branches, and 1013
centers (Including 2 overseas centers in Singapore and Beijing). Its vision is to be a highly
preferred and reliable bank enhancing value for all stakeholders. As of October 9, 2017, Mr.
Mahesh Kumar Jain is the MD and CEO of IDBI.

IDBI Bank doesn't work only in core banking services. Apart from this, It also deals in other
financial services like Bond Trading, Equity Broking, and Depository services. IDBI was
established as a subsidiary of RBI (Reserve Bank of India). The Government of India takes it
ownership in Feb, 1976.

Key Products
o Preferred Banking: Royale Account, Preferred Account, PowerPlus Account.
o Savings Account: SuperSavings Account, SuperShakti (Womens) Account, Jubilee
Plus (Senior Citizens) Account etc.
o Flexi Current Account
o Corporate Payroll Account: Imperial Salary Account, Star Salary Account, Prime
Salary Account, Pride Salary Account etc.
o Loans: Home Loan, Auto Loan, Personal Loan, Education Loan etc.
o Pradhanmantri Social Security Scheme
o Cards: Credit Cards, Debit Cards, Prepaid Cards etc.
o Pay Apt-Mobile Wallet
o 24 Hours Banking: Phone Banking, Mobile Banking, Internet Banking, Account
Alerts etc.
o Jus Tab
o Trusteeship through ITSL
o Sukanya Samridhi
Financial Records and Employees:

On 31st March, 2013, There were 15465 employees in IDBI. The bank records business of
25.64 crores INR per employee and net profit of INR 12.17 lakhs per employee during the
year 2012-2013. As on 31March 2016, it had an balance sheet size of Rs. 3,74,372 crore and
total business of Rs. 4,81,613 crore.

Company Profile

IDBI Bank Ltd., today, is operating as a full service universal bank that serves the customers
from all segments.

IDBI Bank Ltd. has inherited a rich legacy from its predecessor entity - Industrial
Development Bank of India – which was an apex Development Financial Institution (DFI) in
the realm of industry from July 1, 1964 to September 30, 2004. As a DFI, the erstwhile IDBI
stretched its canvas beyond mere project financing to cover an array of services that
contributed towards balanced geographical spread of industries, development of identified
backward areas, emergence of a new spirit of enterprise and evolution of a deep and vibrant
capital market.

On October 1, 2004, the erstwhile IDBI was converted into a banking company – IDBI Ltd. -
to undertake the entire gamut of banking activities while continuing to play its secular DFI
role. Desirous of fuelling its business growth, IDBI Ltd. merged its subsidiaries - the
erstwhile IDBI Bank, IDBI Home Finance Ltd., IDBI Gilts, the erstwhile United Western
Bank Ltd., with itself over a period of time. IDBI Ltd. also changed its name to IDBI Bank
Ltd. to reflect its widened business functions.

As an universal bank, IDBI Bank Ltd. touches the lives of millions of Indians through a wide
array of banking products and services. Besides, the Bank has an established presence in
associated financial sector businesses including capital market, investment banking and
mutual fund business. The Bank’s very business philosophy is characterised by the
commitment to provide relevant financial solutions, ensure maximum customer convenience
through easy access to branches and ATMs as well as digital offerings and excellence in
customer service.

Going forward, IDBI Bank is strongly committed to work towards emerging as ‘most
preferred and trusted bank enhancing value for all stakeholders’.
Classification of IDBI Bank

 Re-categorization of IDBI Bank Ltd. as a Private Sector Bank

 Balances held by State / Central and Urban Co-operative Banks with IDBI Bank -
Treatment for CRR purposes (vide RBI email dated March 15, 2019)
 Allocation of Government Business to IDBI Bank – Advisory issued by Department
of Financial Services , Government of India
 Re-categorization of IDBI Bank Ltd. as a Private Sector Bank
DBI Bank Limited has been categorized as a ‘Private Sector Bank’ for regulatory purposes by
Reserve Bank Of India with effect from January 21, 2019, consequent upon Life Insurance
Corporation Of India acquiring 51% of the total paid-up equity share capital of the bank.
[Press Release: 2018-2019/2194 Dated March 14, 2019]
 Balances held by State / Central and Urban Co-operative Banks with IDBI Bank -
Treatment for CRR purposes (vide RBI email dated March 15, 2019
Department of Cooperative Bank Regulation, Reserve Bank of India has issued a clarification
that for the purpose of maintenance of cash reserves (CRR) by non-scheduled co-operative
banks in terms of Section 18 read with Section 56 of the Banking Regulation Act, 1949, the
‘net balance in current accounts’ shall, in relation to a co-operative bank, continue to include,
inter alia, the excess, if any, of the aggregate of the credit balances in the current account
maintained by that co-operative bank with IDBI Bank Ltd over the aggregate of the credit
balances in current accounts held by IDBI Bank Ltd with such co-operative bank, till further
instructions.
 Allocation of Government Business to IDBI Bank – Advisory issued by Department
of Financial Services , Government of India
Department of Financial Services (DFS), Government of India (GoI) vide its communication
F.No. 8/2/2019-BO-II dated December 17, 2019, has directed all Central/State
Governments/Departments/ Agencies /Institutions to continue to consider IDBI Bank for
allocation of Government Business keeping in view that the direct and indirect shareholding
of GoI in IDBI Bank is over 97%.
Based on GoI’s above communication, Railway Board, Ministry of Railways has advised all
Railway units accordingly vide letter no. 2019/ACII/9/11 dated January 2, 2020. The DFS
has also advised the Ministry Of Shipping separately vide office memorandum dated January
6, 2020, for parking of surplus funds by Port Trusts with IDBI Bank.
Explain the types of economic system.

What is an Economic System?

An economic system is a means by which societies or governments organize and distribute

available resources, services, and goods across a geographic region or country. Economic
systems regulate the factors of production, including land, capital, labor, and physical
resources. An economic system encompasses many institutions, agencies, entities, decision-
making processes, and patterns of consumption that comprise the economic structure of a
given community.
 

 Types of Economic Systems

There are many types of economies around the world. Each has its own distinguishing
characteristics, although they all share some basic features. Each economy functions based on
a unique set of conditions and assumptions. Economic systems can be categorized into four
main types: traditional economies, command economies, mixed economies, and market
economies.

 1. Traditional economic system

The traditional economic system is based on goods, services, and work, all of which follow
certain established trends. It relies a lot on people, and there is very little division of labor or
specialization. In essence, the traditional economy is very basic and the most ancient of the
four types.

Some parts of the world still function with a traditional economic system. It is commonly
found in rural settings in second and third world nations, where economic activities are
predominantly farming or other traditional income-generating activities.

There are usually very few resources to share in communities with traditional economic
systems. Either few resources occur naturally in the region or access to them is restricted in
some way. Thus, the traditional system, unlike the other three, lacks the potential to generate
a surplus. Nevertheless, precisely because of its primitive nature, the traditional economic
system is highly sustainable. In addition, due to its small output, there is very little wastage
compared to the other three systems.

 2. Command economic system

In a command system, there is a dominant centralized authority – usually the government –
that controls a significant portion of the economic structure. Also known as a planned system,
the command economic system is common in communist societies since production decisions
are the preserve of the government.

If an economy enjoys access to many resources, chances are that it may lean towards a
command economic structure. In such a case, the government comes in and exercises control
over the resources. Ideally, centralized control covers valuable resources such as gold or oil.
The people regulate other less important sectors of the economy, such as agriculture.

In theory, the command system works very well as long as the central authority exercises
control with the general population’s best interests in mind. However, that rarely seems to be
the case. Command economies are rigid compared to other systems. They react slowly to
change because power is centralized. That makes them vulnerable to economic crises or
emergencies, as they cannot quickly adjust to changing conditions.

 3. Market economic system

Market economic systems are based on the concept of free markets. In other words, there is
very little government interference. The government exercises little control over resources,
and it does not interfere with important segments of the economy. Instead, regulation comes
from the people and the relationship between supply and demand.

The market economic system is mostly theoretical. That is to say, a pure market system
doesn’t really exist. Why? Well, all economic systems are subject to some kind of
interference from a central authority. For instance, most governments enact laws that regulate
fair trade and monopolies.

From a theoretical point of view, a market economy facilitates substantial growth. Arguably,
growth is highest under a market economic system.

A market economy’s greatest downside is that it allows private entities to amass a lot of
economic power, particularly those who own resources of great value. The distribution of
resources is not equitable because those who succeed economically control most of them.

 4. Mixed system

Mixed systems combine the characteristics of the market and command economic systems.
For this reason, mixed systems are also known as dual systems. Sometimes the term is used
to describe a market system under strict regulatory control.

Many countries in the developed western hemisphere follow a mixed system. Most industries
are private, while the rest, composed primarily of public services, are under the control of the
government.

Mixed systems are the norm globally. Supposedly, a mixed system combines the best features
of market and command systems. However, practically speaking, mixed economies face the
challenge of finding the right balance between free markets and government control.
Governments tend to exert much more control than is necessary.
 Final Word

Economic systems are grouped into traditional, command, market, and mixed systems.
Traditional systems focus on the basics of goods, services, and work, and they are influenced
by traditions and beliefs. A centralized authority influences command systems, while a
market system is under the control of forces of demand and supply. Lastly, mixed economies
are a combination of command and market systems.

 What is Socialism? Explain its features, advantages and disadvantages of socialism?

What is Socialism?

Socialism is a system in which every person in the community has an equal share of the
various elements of production, distribution, and exchange of resources. Such a form of
ownership is granted through a democratic system of governance. Socialism has also been
demonstrated through a cooperative system in which each member of the society owns a
share of communal resources.

The rule of engagement in a socialistic system is that each person receives and contributes
according to his ability. For this reason, individuals in a socialistic society tend to work very
hard. Members of the community receive a share of the national pie once a percentage is
taken off for the purpose of communal development. The areas into which resources are
channeled include defense, education, and transportation.

For the common good is a term that is interpreted to mean taking care of people who can’t
contribute to social development, such as children, caretakers, and the elderly.

Types of Socialism

Many forms of socialism exist around the world, and they all differ when it comes to ideas on
how best to incorporate capitalism into a socialistic structure. In addition, the different forms
of socialism emphasize the diverse aspects of social democracy. Here are some of the types
of socialistic systems:

1. Democratic socialism

In democratic socialism, factors of production are under the management of an elected

administration. Vital goods and services such as energy, housing, and transit are distributed
through centralized planning, while a free market system is used to distribute consumer
products.

2. Revolutionary socialism

The running philosophy of revolutionary socialism is that a socialistic system can’t emerge
while capitalism is still in play. Revolutionaries believe that the road to a purely socialistic
system requires a lot of struggle. In such a system, the factors of production are owned and
run by workers through a well-developed and centralized structure.

3. Libertarian socialism
Libertarian socialism works on the assumption that people are always rational, self-
determining, and autonomous. If capitalism is taken away, people naturally turn to a
socialistic system because it is able to meet their needs.

4. Market socialism

Under market socialism, the production process is under the control of ordinary workers. The
workers decide how resources should be distributed. The workers sell off what is in excess or
give it out to members of the society, who then distribute resources based on a free market
system.

5. Green socialism

Green socialism is protective of natural resources. Large corporations in a green socialistic

society are owned and run by the public. In addition, green socialism promotes the
development and use of public transit, as well as the processing and sale of locally grown
food. The production process is focused on ensuring that every member of the community
has enough access to basic goods. Moreover, the public is guaranteed a sustainable wage.

Advantages of Socialism

1. Absence of exploitation

A socialistic system ensures that no worker is exploited. How? Well, each of the workers in
the community has a say on how the resources are managed, and each person receives and
contributes based on an individual’s potential.

According to the socialistic system, each person is guaranteed access to basic goods, even
those who are not able to contribute. As a result, the system helps to minimize poverty levels
in the society. In addition, each person has the same right to access health care and other
important social aspects, such as education.

2. Rejection of discrimination

The system disapproves discrimination, and each person does what he is good at or what he
enjoys best. If there are jobs that should be done and there is no one to perform them, a
higher remuneration is provided. Natural resources are protected for posterity.

Disadvantages of Socialism

1. Dependence on cooperative pooling

Perhaps the greatest disadvantage of a socialistic system is its reliance on cooperative pooling
to get things done. In addition, people who are competitive in the community are viewed in a
negative light. The society expects cooperation and not competitiveness. According to
socialism, competitive individuals tend to find ways to cause social unrest for personal gain.

2. Lack of competitiveness and innovation

Socialism does not reward entrepreneurial ventures or competitiveness. Consequently, a
socialistic system does not encourage innovation as much as capitalism.

Socialism vs. Capitalism

Capitalism, also known as a free market system, and socialism differ based on their rational
underpinning. In addition, they also differ based on implied or stated goals, as well as the
framework of ownership, and the production process.

Structurally, a free market system and socialism can be distinguished based on rights to
property, as well as control of the production process. Under a capitalistic economy,
enterprises and private individuals control the means of production, together with all the
profits. Under a socialistic structure, a central authority controls the resources used in the
production process. Private property is unheard of, but where it exists, it is in the form of
consumer products.

While a capitalistic system is dependent on the decisions of independent persons who

influence the production process, a socialistic structure controls the production process by
regulating the market system.

 Explain in culture in detail

Business culture refers to the set of behavioural and procedural norms that can be observed within a
company — which includes its policies, procedures, ethics, values, employee behaviours and
attitudes, goals and code of conduct. It also makes up the “personality” of a company and defines
the work environment (e.g., professional, casual, fast-paced).

Other elements that make up company culture include management style, expectations, company
goals, local and national government policies, benefits/perks, opportunities to advance, the way
employees feel about the work they do and disciplinary action methods your business uses.

Culture is the collection of values, expectations, and practices that guide and inform the actions of all
team members. Think of it as the collection of traits that make your company what it is. A great
culture exemplifies positive traits that lead to improved performance, while a dysfunctional
company culture brings out qualities that can hinder even the most successful organizations.

Culture affects all aspects of your business, from punctuality and tone to contract terms and
employee benefits. When workplace culture aligns with your employees, they’re more likely to feel
more comfortable, supported, and valued. Companies that prioritize culture can also weather
difficult times and changes in the business environment and come out stronger.

A “good” company culture is good for your business and good for your employees. But what exactly
is a “good” company culture? In a positive company culture, employees know your company values
by heart and live by them in their day-to-day work. A good company culture also has high:

 Morale
 Flexibility
 Productivity
 Motivation
 Trust
 Autonomy
  Innovation
 Engagement
 Transparency
 Diversity

Types of company cultures

 Leadership company culture:

A business with a leadership-focused company culture supports employee growth and focuses on
helping them succeed in their field. They tend to have great mentorship and coaching programs in
place to help employees develop their skills and offer opportunities for advancement (e.g., internal
promotions, job rotation programs, tuition reimbursement, seminars and workshops).

 Traditional company culture:

In a traditional business culture, everyone is typically expected to adhere to strict rules set by the
company, including dress codes, company procedures and organizational hierarchy. As opposed to a
more casual company culture, traditional company cultures are often more formal and corporate in
nature (e.g, suit and tie).

 Innovative or adhocracy company culture:

Innovative or adhocracy company culture focuses on development and innovation. Tech startups
are a great example of this type of company culture. It sets aside the strict pattern of communication
in traditional cultures, implements easy communication of ideas and accepts individuality and
ingenuity from all parts of the company. People with strong creativity often work well in this kind of
business culture.

Qualities of a great culture

Every organization’s culture is different, and it’s important to retain what makes your company
unique. However, the cultures of high-performing organizations consistently reflect certain qualities
that you should seek to cultivate:

Alignment

It comes when the company’s objectives and its employees’ motivations are all pulling in the same
direction. Exceptional organizations work to build continuous alignment to their vision, purpose, and
goals.

Appreciation

It can take many forms: a public kudos, a note of thanks, or a promotion. A culture of appreciation is
one in which all team members frequently provide recognition and thanks for the contributions of
others.

Trust

It is vital to an organization. With a culture of trust, team members can express themselves and rely
on others to have their back when they try something new.

Performance
Itis key, as great companies create a culture that means business. In these companies, talented
employees motivate each other to excel, and, as shown above, greater profitability and productivity
are the results.

Resilience

It is a key quality in highly dynamic environments where change is continuous. A resilient culture
will teach leaders to watch for and respond to change with ease.

Teamwork

It encompasses collaboration, communication, and respect between team members. When

everyone on the team supports each other, employees will get more done and feel happier while
doing it.

Integrity,

They like trust, is vital to all teams when they rely on each other to make decisions, interpret results,
and form partnerships. Honesty and transparency are critical components of this aspect of culture.

Innovation

It leads organizations to get the most out of available technologies, resources, and markets. A
culture of innovation means that you apply creative thinking to all aspects of your business, even
your own cultural initiatives.

Psychological

The safety provides the support employees need to take risks and provide honest feedback.
Remember that psychological safety starts at the team level, not the individual level, so managers
need to take the lead in creating a safe environment where everyone feels comfortable contributing.

2. What is foreign culture and impact of foreign culture?

impact of foreign culture

Doing business on the international plane presents many challenges because of a variety of factors
which differ from one market to the other. These differences are basically informed by the
environment of the host country, which is often times different from that at home. One of the
environmental factors that present such a challenge is culture.

Culture

It can be defined as complex construct that embodies a people’s knowledge, morals, art, beliefs,
customs, laws and other capabilities gathered by a community over time. The culture of the host
country strongly impacts on the performance of a firm that engages in international business.
Notable aspects of culture central to the conduct of international business include the social
structure, religion, language and education. G4S, a company that has established itself in
international business has had its fair share of challenges in this area.

Social Structure

It to do with how society is socially organized. It could be looked at from the individual-group
dimension, or from the social stratification dimension. Some societies consider an individual the
pillar of social organization This is the scenario G4S encountered when it entered the American and
most Western markets.
The challenge here was how to instill a sense of teamwork among employees. It was an uphill task
for managers who had been socialized to believe in the superiority of teamwork, as individuals
compete against each other for results. On the Japanese market however, the firm found that
emphasis was on group, rather than individual performance. Though this is said to be the driving
force behind the company’s success in Japan, it is vilified for imbedding creativity, and is touted as a
stumbling block to dynamism. This, indeed, is a challenge the firm has had to deal with.

Social stratification

It has to do with placing members of society in certain classes. There are those in the lower, middle
and upper classes. Many times, this is borne out of one’s family background, income or occupation.
Those from the lower class only hope to move from that class to the upper one through a process
called social mobility, which is in most cases done through education and job opportunities.

When opportunities for mobility are suffocated, there is likely to be conflict between the classes;
and in the job situation, between management and employees. Some societies have room for social
mobility, while others do not. A country like Britain has less social mobility. As a result, there is
always simmering tension between management and workers, which the firm has had to deal with
from time to time. When industrial disputes become frequent, the firm finds doing business in the
country quite expensive. Such a problem is not common in America, where social mobility is easy.

What are the three institutional for financing and promoting business?

Commercial Banks

Commercial banks are generally stock corporations whose principal obligation is to make a profit for
their shareholders. Basically, banks receive deposits, and hold them in a variety of different
accounts; extend credit through loans and other instruments: and facilitate the movement of funds.
While commercial banks mostly specialize in short-term business credit, they also make consumer
loans and mortgages, and have a broad range of financial powers. Their corporate charters and the
powers granted to them under state and federal law determine the range of their activities.

States and the federal government each issue bank charters. State-chartered banks operate under
state supervision and, if they fail, are closed under provisions of state as well as federal law. National
banks are chartered and regulated by the Office of the Comptroller of the Currency (OCC), a division
of the Treasury Department. Banks can choose between a state or a federal charter when starting
their business, and can also convert from one charter to another after having been in business.
Commercial banks receive deposit insurance from the Federal Deposit Insurance Corporation (FDIC)
through the Bank Insurance Fund (BIF). All national banks, and some state-chartered banks, are
members of the Federal Reserve System.

Savings and Loans/Savings Banks

Savings and loan associations and savings banks specialize in real estate lending, particularly loans
for single-family homes and other residential properties. They can be owned by shareholders
(“stock” ownership), or by their depositors and borrowers (“mutual” ownership). These institutions
are referred to as “thrifts,” because they originally offered only savings accounts, or time deposits.
Over the past two decades, however, they have acquired a wide range of financial powers, and now
offer checking accounts (demand deposits) and make business and consumer loans as well as
mortgages.

Both savings and loan associations and savings banks may be chartered by either the federal Office
of the Comptroller of the Currency (OCC) or by a state government regulator. Generally, savings and
loan associations are insured by the Savings Association Insurance Fund (SAIF), and savings banks are
insured by the Bank Insurance Fund (BIF).

Savings institutions must hold a certain percentage of their loan portfolio in housing-related assets
to retain their charter, as well as their membership in the Federal Home Loan Bank System. This is
called the “qualified thrift lender” (QTL) test. Savings institutions must maintain 65% of their
portfolio in housing-related or other qualified assets to maintain their status. Recent liberalization of
the QTL test has allowed thrifts to use some non-housing assets to meet this requirement.

The number of thrifts declined dramatically in the late 1980s and early 1990’s. The savings and loan
crisis of the 1980s forced many institutions to close or merge with others, at an extraordinary cost to
the federal government. However, there was a resurgence of interest in the thrift charter in
following years. The recapitalization of the thrift fund, a revitalized industry and legislative changes
made the charter – once thought doomed to extinction – an appealing route to financial
modernization for some. Due to liberalization of the qualified thrift lender test, many insurance
companies and securities firms, as well as commercial firms, are now able to qualify as unitary thrift
holding companies and to own depository institutions, bypassing prohibitions in the Glass Steagall
Act and the Bank Holding Company Act. Critics of a revitalized thrift charter have said that it has
advantaged a certain class of financial institutions, highlighting the need for broader financial
modernization through federal legislation

Credit Unions

Credit unions are cooperative financial institutions, formed by groups of people with a “common
bond.” These groups of people pool their funds to form the institution’s deposit base; the group
owns and controls the institution together. Membership in a credit union is not open to the general
public, but is restricted to people who share the common bond of the group that created the credit
union. Examples of this common bond are working for the same employer, belonging to the same
church or social group, or living in the same community. Credit unions are nonprofit institutions that
seek to encourage savings and make excess funds within a community available at low cost to their
members.

Credit unions accept deposits in a variety of accounts. All credit unions offer savings accounts, or
time deposits; the larger institutions also offer checking and money market accounts. Credit unions’
financial powers have expanded to include almost anything a bank or savings association can do,
including making home loans, issuing credit cards, and even making some commercial loans. Credit
unions are exempt from federal taxation and sometimes receive subsidies, in the form of free space
or supplies, from their sponsoring organizations.

Credit unions were first chartered in the U.S. in 1909, at the state level. The federal government
began to charter credit unions in 1934 under the Farm Credit Association, and created the National
Credit Union Administration (NCUA) in 1970. States and the federal government continue to charter
credit unions; almost all credit unions are insured by the National Credit Union Share Insurance
Fund, which is controlled by the NCUA. In Connecticut, state-chartered credit unions are supervised
by the Department of Banking, Financial Institutions Division.
What is the impact of business decisions and fiver year planning?

Explain social organization and explain its types?