What is vision and mission statement?

A Vision Statement:

A vision statement is a company's road map, indicating both what the company wants to become and guiding transformation initiatives by setting a defined direction. A vision statement has more to do with the future and really describes what an organization plans or hopes to be in the future. Thus, it has no relation with present. In fact, a vision statement shouldn't discuss the present state of the organization but should really discuss what the organisation wants to be in future. This is more of an inspirational or motivational statement. To be effective the message should be clear, optimistic, and of course realistic. An unrealistic vision statement, i.e. a local store owner saying that in five years the company will be bigger than Walmart will not be termed as comical or inspirational.

Mission Statement

A mission statement is concerned with 'present day' focus and really describes how a company plans on achieving its objectives. This is really a statement to employees, shareholders, and stake holders in the organization that clearly articulates what an organization is doing, how it's going to do it, and ultimately why it's doing it.

The mission statement is very important for a large organization and therefore it should be very effective. Changing a company's mission statement can be a major undertaking with numerous consultations and even external advisers being hired.
The key questions to answer in a mission statement are the activities of the organization, its aim and the benefits that it intends to provide to its customers.

Explain the meaning of micro and macroeconomics.

MICROECONOMICS VS MACROECONOMICS:

It is customer to study economics into two branches- Microeconomics and macroeconomics.

Microeconomics is concerned with the study of small component of the national economy or individual economic agents such as a consumer or a producer firm or a company.

Microeconomics is that branch of economic analysis which studies individual unit, may be consumer or a firm. It studies what a consumer wishes to consume and at what level a consumer gets maximum satisfaction? What price a firm should charge? At what level of output a firm gets maximum profit? What price should be paid to an individual factor of production?

Macroeconomics concerned with these questions in aggregate. Macroeconomics looks at the total amount of goods and services that all consumers in an economy wish to buy at a given price level. The total output of all goods and services that all consumers in an economy at a given point of time. The changes in the general price level, rate of inflation, money supply and fluctuations in total output, employment and incomes in a country are the subject matter of macroeconomics.

A good analogy to describe the relationship between micro and macroeconomics is that of a single tree and group of trees comprising forest. One could easily understand that forest is made up of trees but any individual tree does not make a forest. Similarly it is also obvious that the remedy prescribed to solve the problem of an entire forest of diseased trees would be quite different from the remedy prescribed if any one or two of those trees were diseased.

The connection between macroeconomics and microeconomics has long been a point of confusion and struggle among economists. There are economists who believe that micro economics or price theory can also account for macroeconomic problems like unemployment. On the other hand Keynesian macroeconomics is also criticised for its lack of a firm micro foundation.

In fact, both these branches are complementary and without the study of the one the other cannot complete its knowledge of the economics. Both are complimentary rather than competitive. 

Define globalization. How does denationalization differ from internationalization?

Globalization is the process of interaction and international integration among people countries and governments of various countries. Globalization is the trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies.  Globalization is a trend characterized by denationalization in which people cooperate for their well-being and completely free from government control (national boundaries becoming less relevant). It is different from internationalization in which much importance is given to national boundaries although the purpose of both is the well-being of nation and people (entities cooperating across national boundaries).  

In India the move towards Globalization and free trade coincided with the process of structural reforms and economic liberalization.  There are six distinct economic processes underlying what is commonly called the globalization of the world economy[1]. These are: (i) the expansion of international trade in goods and services; (ii) freer flow of technology, (iii) expansion in foreign direct investment, (iv) freer flow of other capital flows, (v) freer movement of persons across national boundaries, and (vi) the development of international institutional of governance suited to the globalized world.

None of these processes is entirely new. After Second World War, these activities were in place in the name of international economic integration. The world globalization came in to fashion after 1990 when the development in the field of information technology made interaction across boundaries easy. The world globalization is so dramatic label that every one identifies modern period from this label. Just as the Great Depression, the Cold War, the space Age the globalization describes the political economic and cultural atmosphere of today. 

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[1] Ahluwalia, Montek Singh, “Prices for Development in a globalized world” in Liberalization and Globalization in Indian Economy, Gupta , K.R. (Ed) 2008, Atlantic publishers and Distributors (p) Ltd., New Delhi.

Interaction between Environmental Factors

Interaction between Environmental Factors 

  The economic and non-economic factors of business environment exercise a strong influence with each other. Business also has influences on these factors. Now, let us discuss haw environmental factors interact with each other.

 (1) Interaction between Natural Environment of a country and Economic Environment of Business in that country: We have already discussed the state of deteriorating natural or physical environment. The traditional view was that natural environment has been a gift of nature available for human exploitation; resources such as land, water, rainfall minerals were seen as gifts of nature. These are to be used for betterment of human society. Now, we have seen too much deterioration or depletion in the availability of natural resources and the threats of over exploitation are known. A number of legislations have been enacted in many countries to conserve natural resources and to conserve the physical environment for future generations. The environmental legislation may impose a constraint on the expansion of an existing business. On the other hand, steps are being advocated for bringing about a balance between nature and human activities. The expansion of plant, scale of output the organisation of firms obviously important for economic development. Thus, in every industrialised society business has social responsibility to conserve and save resources for posterity. To the extent this social responsibility is not discharged, laws relating to environmental protection will retard growth. It is therefore need of the hour to meet environmental standards and grow safe.

(2) Interaction between Historical Environment of business and Economic Environment:

These two are interdependent. The present (economic) environment of business can be treated as a legacy of its past historical environment. Every business has a history, and every past event has a lesson to teach. As a result, all present day problems can also be handled in terms of experience. For example, the economic environment of business in India is the outcome of the colonial rule, which it had for quite long. The British Empire was interested in colonies so that it could easily get required raw material for its industries and sale the finished products in assured colonial markets. The colonies thus supplied raw material and consumed the manufactured goods. History is storehouse of information and lessons; it has guidelines for present economic decisions.

(3) Interaction between social-cultural Environment and economic environment: The social attitude towards business and management is a key factor that determines how many people will choose business as an activity and to management as a career. If business has social reputation as a respectable occupation, commerce and industry would develop rapidly and professional managers will emerge to manage the modern business houses. On the other hand, if there is conflict between labour and management, instead of cooperation, a representative system is required to solve the industrial unrest. Similarly, if the aim is to attain rapid growth the emphasis will be on productivity growth and workers will be given more incentive to increase productivity rather than profitability.

(4) Interaction between Political-Legal Environment and Economic Environment: Political-Legal Environment and economic environment have a direct relationship. In a situation of political stability business will flourish and prosper and new enterprises     w ill be forthcoming. In a stable environment, business firms are willing to invest more and take more risks. However, if there is political instability, business definitely suffers. In uncertainty firms will not like to take-up new projects, money market investments shrink, and profits dwindle. The political party in power decides the pattern of economic legislation and state of economic environment decides the continuity or discontinuity of a particular political rule. The political ideology also changes with time for example during 1970s when congress party was in power in centre they followed a path of socialism under the leadership of Indira Gandhi . However, when in 1991 Narsinharao became the Prime Minister they introduced liberalisation, privatisation, and globalisation and followed the path of market economy. All the existing rules were changed accordingly with the change in ideology of the party.

(5) Educational- Cultural Environment: The economic environment also interacts with cultural factors. In India, traditions, customs, social values have largely moulded the attitudes and beliefs of the people. Family traditions, which are mostly non-economic, play an important part in shaping the institutions. Management is in the hands of traditional heads of the family. The scenario is now changing with the spread of education. People are receiving costly management education from business schools of repute and this phenomenon is changing the traditional social values and culture. Thus, the system of education may be responsible for the current economic environment. The traditional thinking such as simple living and high thinking is changing in favour of materialistic view of high consumption.

From the foregoing discussion, we have noted that environment and business are inter-related. The environment is a complex phenomenon. The term consists of several subsets e.g. economic, social, cultural, political, legal, and technological. The business environment varies from country to country and from time to time. The environment consists of all economic institutions, the structure of economic system, government policies and plans. Business is also influential in shaping the total environment in which it works. Thus, there is a relationship of ‘give and take’ manner. To conclude, we say business and environment are mutually dependent and that they interact actively.

International Environment

International Environment:
     The domestic environment of every business firm in a country is also influenced by the relationships it has with other countries in the form of membership of international organisations such as IMF, World Bank, the “Bretton woods” institutions as are popularly known, bilateral or multilateral trade agreements or strategic alliances, and cultural ties. These relationships give rise to what is known s international environment. Let us have a look at major treaties affecting international environment.

Paris, 1818-19: A useful starting point to survey such efforts is the Paris Peace Conference of 1818-19, which followed World War- I Although its main purpose was to redraw political borders and establish principles for avoiding a repeat of the War, establishing a framework for restoring free trade and flow of capital was also on the agenda. These initial efforts led to establishment of the League of Nations, but its power was limited. The Failure may in a way responsible for unstable financial relations among countries and economic depression[1].

London, 1933: Between the wars, the most notable event was the World Monetary and Economic Conference held under the auspicious of the League of Nations. As with the League of Nations, this effort failed primarily because of a lack of support from the U.S. government.

Bretton Woods, 1944: During World War II, U.K. and U.S. Treasures initiated plans to overcome the weaknesses of the piecemeal inter war approaches by establishing multilateral financial institutions for the post war period. U.K. economist John Maynard Keynes and Harry Dexter White of the United States prepared the first draft of the plans. This became the basis for Bretton Woods Conference. United States along with Delegations from 45 countries met in Bretton Woods in 1944. The planners of Bretton Woods intended to create three multilateral institutions not two[2]. Established in 1944 and named after the New Hampshire town where the agreements were drawn up, the Bretton Woods system created an international basis for exchanging one currency for another. It also led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, now known as the World Bank. The former was designed to monitor exchange rates and lend reserve currencies to nations with trade deficits, the latter to provide underdeveloped nations with needed capital. A proposed international trade organisation proved to be too politically divisive, and so a decision on it was postponed until after the war, with nearly fatal effect. As a fallback option, a group of countries established the less potent General Agreement on Tariff and Trade (GATT) in 1948.It was not until 1994 that the World Trade Organisation came into being.

Following substantial pressures on exchange rates in the 1960s and official termination of gold convertibility of the U.S. dollar in 1971 it became apparent that a new monetary order was needed. The major industrial countries agreed to create a Committee of 20, which later proposed that Goal of Exchange Rate stability be abandoned. Thus, the era of fixed exchange rate ended.

The world experienced First Oil Shock during     1973-74. The OECD countries and IMF prepared a proposal to ease the BoP crisis of developing countries. IMF established Oil facility that was borrowing from petroleum exporting countries and lending on low conditionality terms to oil importing countries both industrial and developing.

The exchange rates instability during first half of the 1980s led lenders to give a call for new Bretton woods.

The discussion above makes it clear that international environment over past century evolved in response to circumstances of the moment. The world leaders were however less interested in long-term solutions. Each of the major attempts to revise the international financial architecture came in response to a crisis. The international environment never remains static and therefore no permanent institution can avoid any crisis or provide off-hand solutions for future. The business firms should keep a watch on the international environment closely. It should keep an eye on the investment, saving, exchange rate, balance of payment export, import and the inflation. Any neglect of these and other factors may endanger the very survival of the business.

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[1] Boughton, James, M. (2009)  “A New Bretton Woods? Finance and Development, March pp. 44-46

[2] ibid - pp45

Technological Environment

Technological Environment:

  Technology is a term that ignites passionate debates in many circles these days. Technology have been instrumental for environmental destruction and cultural fragmentation. It has been the main cause to economic and social progress. Explosion in information technology have made the position of some firms vulnerable. The life cycle of the products have reduced and expectations of the consumers are becoming higher and higher due to all these technological changes. But to cope up with this kind of scenario, a continuous vigil of the happenings and adequate investment on R & D department is to be earmarked by the marketer. Marketers must also be aware of certain government regulations while developing and launching new products with latest technological innovations.

Technological change is fundamentally reshaping hoe companies and nations do business. The technique of doing business has entirely changed after the internet access and mobile smart phones. Information technology has reduced the world to an electronic village. Technology includes inventions, innovations and affects the way the resources of an economy are converted into outputs. Technology mainly influences the ways of doing things that a man designs, produces and distributes or sells good and services, managerial practices and organisational structure. The main factors that affect competitiveness are:

                    i.            domestic economic strength: or overall macroeconomic environment

                  ii.                        government- the extent to which government policies promotes technologies for    competitiveness.

                iii.            the performance of capital markets and the quality of financial services.

                iv.            infrastructure the availability of best infrastructure affects technological growth.

                  v.            availability of scientific and technological work force i.e. the quality of human resources available

In many industries, the introduction of new technology has essential become a pre-condition foe remaining in business. The continuous introduction of technical innovations and fast changing basic technology has increased the cost of new investment while simultaneously reducing the expected life span of any innovation in production of a new product.

Spectacular advances can easily be witnessed in the field of technology. Many of today’s products were not available even a decade ago. Markets are flooded with new products. Many multi-national firms have channelled considerable resources into speeding up the innovations with the idea of using rapid product change to keep their competitive advantage. The combination of rising investment risks and shorter life span for new products, have increased the risks of production. Businesspersons have to keep themselves well informed and plan such strategies to meet the challenges posed by the rapid changing technological environment.

The major technological changes given by Koontz and O’Donnell in their book are as follows[1]:

(i)     Increased ability to master time and distance for movement of freight and passengers, rail, roads, automobiles, and trucks, airplanes space vehicles

(ii)   Increased ability to generate store, transport and distribute energy, nuclear power and laser

(iii)  Increased ability to design new materials and change the properties  of others so that they better serve needs : steel alloys, synthetic fibres plastic new drugs

(iv) Mechanisation and automation of physical processes

(v)   Mechanisation and automation of certain mental processes: the computer

(vi)  Extension of Human ability to sense things radar, microscope, etc

(vii)           Increased understanding of individual and group behaviour and how to deal with it,  psychological bases of motivation group behaviour, patterns, improved management techniques

(viii)         Increased understanding of diseases and their treatment

Scientists are working for the development of new technologies and spending enormous funds on R&D. The revolutionary technological innovations and development during recent times pose a major challenge for the third world countries. Major changes in informatics, biotechnology, and materials are bringing about rapid transformation in various industries with a rapid growth of informatics involving close relationship between computer, telecommunication, and system application. The area of new technical usage has emerged involving a variety of microelectronics applications, these are being accompanied by bio-technological developments in agricultural and health and use of new material such as composites. These technological changes have brought about radical changes in products and processes. It is essential that business firms utilise these technologies to much greater extent than at present in most developing countries. Some basic facts about technology should be kept in mind by all business firms that: every new technology is a force for creative destruction. The discovery of many new technologies creates long-term consequences that are not always predictable. Technology is capital intensive and demand more and more funds for R&D. Business firms should check harmful effects of technology.

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[1] Koontz and O’Donnell,(1970) “ Management: A System and Contingency Analysis of Managerial Functions” p. 80 

Political-Legal Environment:

Political-Legal Environment:

 Economic environment within a nation is closely linked with its political and legal systems. For example, the Socialist countries had a Centrally Planned economic system. In most countries, there are number of laws that regulate the conduct of a business. These laws invariably are explicitly or implicitly build on ideologies and values, which relate to both economic and social goals. Political-legal environment is the background of laws and regulations within which business conducts its affairs. This environment is made up of government agencies, laws and pressure groups that influence and constrain various organisations and individualism society. This environment provides opportunities, posses challenges and create problems for businesspersons. For example, in many countries with a view to protect consumers Consumer Protection Acts have been passed with stronger provisions. Some governments specify certain standards for the product. Regulations to protect the purity of environment and preserve the ecological balance have assumed great importance in many countries. Government Acts are at three levels: Local, State and the Centre and exert varying amounts of influence over business. In many countries, rules and regulations change with the change in government. Hence political and legal environment go together and it is difficult to draw any demarcation line between them.

The Government plays at least the following roles in business:

a.       Government as a Regulator

b.      Government as a Supplier

c.       Government as a Competitor

d.      Government as a Consumer

As a regulator, the government performs both supportive and restrictive function, by enacting legislation to regulate the conduct of business. There are a host of statutory control on business in India. The main reasons for enforcing regulatory laws are:

a.       to protect firms from each other from unfair trade practices, to protect consumers from unfair trade practices, and

b.            to protect larger interest of   society against unfair business behaviour.

Many countries regulate business competition in the larger public interest. Government has enacted the following laws to protect consumers, workers, shareholders, society, and industry.

·         The negotiable Instruments Act 1881

·          Workmen’s Competition Act 1923

·         The Trade Union Act 1926 

·         Sale of Goods Act1930

·         The Partnership Act1932

·         Industrial Dispute Act 1947

·         Imports exports Control Act 1947

·         Minimum Wages Act 1948

·         The Factories Act 1948

·         The Employees State Insurance Act 1948

·         Industries (development and Regulation) act 1951

·         Industrial Licensing Act, 1951

·         Mines Act 1952

·         The Forward Contracts (Regulation) act1952

·         The Employees Provident Fund Act 1952

·         Indian Companioes Act 1956

·         The Securities Contracts Regulation Act 1957

·         The Income Tax Act 1961

·         The Bonus Act 1965

·         The MRTP Act 1969The foreign exchange Regulator Act 1973 

 For Consumers \

·         Dangerous Drugs act 1930

·         Agricultural Product Trademark and Grading Act 1937

·         Drugs and cosmetics act 1940

·         Essential commodities act 1955

·         Weight and Measures Act 1958

·         Trade and Mercandise Act 1958

·         Prevention Food adulteration Act 1954

·         Consumer Protection Act 1986

All these acts and many more than listed above are in operation and it becomes difficult for the businessperson to meet all these provisions. This makes the role of government and regulator much more complex and challenging. The business major executive needs a good working knowledge of major laws protecting competition, consumers, and the larger interest of the society. Businessperson should also understand the working of the political system because a political change means changes in relationship between government and business. Some firms gain from the new government while some others may suffer. There are two opinions whether or not business should have relationship with politics. The traditional view was that the businesspersons should   not align themselves with any political party. However, the modern view is that business should actively participate and should affect policies in favour of business.

(5) Social and Cultural Environments:

Business is an economic activity and decision making by business firms is an economic process. Nevertheless, it is also true there is an interaction between economic and non-economic factors. We have already discussed that business environment is quite complex with heterogeneous elements interacting with each other. Of all the environments, Social and Cultural environment has the greatest impact. Social environment may be described as the environment of the society as a whole. Business must have a social purpose to enjoy social sanction. The host of factors like social values, culture, beliefs, traditions and conventions, social attitudes social institutions, class structure, pressure groups altogether constitute social environment. There are three kinds of social environments: 

                    i.            changes in our life styles and social values

                  ii.            major social problems

                iii.            growing consumerism

Changes in our life style and social values, such as attitude towards women employment- especially from house wife to that of a working women; attitude towards education, skill, training etc. emphasis on quality of goods than on quantity, preference for work or leisure, change in taste, business ethics, business morality and organisational culture come under this category.

Major social problems include the externalities or social cost of business such as air, water ,noise, atomic pollution demand for safety, social welfare, child welfare, health care, socially responsible marketing, frictional unemployment etc.

Growing consumerism indicating consumer’s dissatisfaction on a larger scale with consumer awareness for unfair trade practices is becoming increasingly important to the marketing decision process.

The nature of social objectives and priorities along with a set of social constraints give form and content to several social movements. Business has attempted to fulfil its social role in several ways, some accepted it voluntarily and some by compulsion through legislation.

Cultural environment relates to cultural forces. According to Taylor, “ That complex whole which includes knowledge, belief, art, morels, law, custom, and other capabilities and habits acquired by mass as member of society”. People grow-up under a particular culture, in which a given society holds many beliefs and values. These have high degree of persistence and are passed on from parents to children, and are reinforced by society. These values are deep rooted. They change slowly. As is said, “Traditions and values die hard.” For example, in India, the religious traditions are deep rooted and every new act or work is undertaken only after consulting priest or the astrologer and only after an offering to God has been made. Successful businessperson will always show respect and belief in the cultural environment and social value system of the area and the people.

Economic Environment:

Economic Environment:

Besides people, markets require purchasing power and that depends upon current income, savings, prices, debt and credit facilities etc. The economic environment affects the demand structure of any industry or product. The following factors should always be kept in mind by the business people to determine the success of the business. Economic Environment is the most important element of business environment. There is a close relationship between a firm and the economic environment around it. Economic environment plays a significant role in business and the progress and growth of a country is dependent on economic environment. Economic environment is multidimensional in nature and includes structure of the economy. Economic conditions economic policies and the economic system are the major external factors. The economic conditions are; nature of economy, stage of economic development, economic resources, the level of income inflationary pressures distribution of national income its composition, competition, saving, investment and capital formation. Economic development affects directly the business firms. The general conditions of economic environment govern the firm’s ability to remain viable. In boom or prosperity there may be shortage of resources and in depression many firms may find it difficult to survive. In developing countries, the low income may be the reason for very low demand for a product. Some factors such as prices and income are very crucial for sale of the product. It is generally assumed that demand is income elastic. In a country where investment and income are steadily rising business prospectus are generally bright, and further investments are encouraged. During recent years we have noticed a change in the behaviour of the investors. The investors feel that developed countries are no longer attractive destinations for further investment because their growth rate is quite low when compared with the growth rates of China and India during 2002 -2008. Further these countries favour foreign capital and have created special economic zones (SEZs) where government grants special policy packages for export-oriented firms. The economic policy of the government, needless to say, has very great impact on business. Government declares industrial policy, monetary policy, fiscal policy, social welfare policy for rapid growth of industries and equitable distribution of wealth. 

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Demographic Environment:

   Demographic Environment:

This is of vital importance to businessmen because the size of the market depends upon the size of population. Business monitor is population because business is people and they create markets. Business people are keenly interested in the size and growth rate of population across the different regions, age distribution, educational levels, household patterns, mixture of different racial groups and regional characteristics. Population has many demographic dimensions such as; growth rate, age, sex, density, educational qualification etc. India today possesses about 2.4% of the total land area but she has to support about 17 percent of the world population. At the beginning of twentieth century, India’s population was 236 million which became 1027 million in the year 2001. A study of the growth of India’s population reveals the following four Phases:

1891-1921 Stagnant

1921-1951 Steady

1951-1981 Rapid Growth

1981-2001 High Growth with definite sign of slowing down

A very significant phase of India’s population lives below the poverty line. From business environment point of view, their demand is insignificant. However, it has various other implications. To solve the basic problems, the additional employment is to be created; the additional houses to be built, social services like education and health are to be created. This again has tremendous business opportunities. In addition, a rapidly increasing population indicates growing demand for many products. High population growth also indicates a growth in the labour supply and availability of cheap labour. The availability of skilled and cheap labour force encourages foreign investors towards India and China.

Another important aspect of demographic studies these days is Human development Index (HDI). Economic growth contributes most to poverty reduction when expands the employment, productivity and wages of poor people and when public resources are channelled to promoting human development. A virtuous cycle of economic growth and human development can be witnessed if growth generates employment and income along with health and happiness. Human Development Index measures the average achievement in three basic dimensions of human development:

a.       Life expectancy at Birth,

b.      Literacy Ratio and enrolment Ratio in Schools

c.       Per-capita Gross Domestic Product

A simple average of these three indices gives HDI, UNDP has classified countries into three categories of High, Medium, and Low range

The data collected for 177 countries placed India at number 138 in HDI in 1994, has improved its position to 127 in 2002. This shift in HDI affects the business significantly. Similarly sex distribution also affects occupational distribution. Gender Development Index (GDI) measures inequalities on the basis of gender. In GDI three measures are taken:

a.       Female Life Expectancy

b.      Female Adult Literacy and Gross Enrolment Ratio (GER)

c.       Female per-capita income

GDI index will be lower than HDI when Gender inequalities exist. India has been classified into countries with High Gender Disparity. Businesspersons may therefore create more jobs for women to fully utilised labour without sex discrimination.

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Macro Environment of Business

The six basic macro environment of business are: Natural Environment, Demographic Environment, Social and Cultural Environment, Political Environment, Legal Environment, and Technological Environment. As stated earlier macro factors are generally more uncontrollable than the micro factors. It will be better to discuss these factors in detail:

(1) Natural Environment: The geographical and ecological factors, such as natural resource endowments, weather, and climatic conditions, air, water, and all natural resources found on the surface of the earth and in its bowels, topographical factors, location aspects in global context, port facilities etc., are included in natural environment and relevant to business. Much of the success of business in the future will depend upon how it responds to differences in geographical conditions. Geographical and ecological factors also influence the location of certain industries. For example, industries, which require large quantities of water, tend to be located near water bodies or rivers. Similarly, industries with high material index finds place near the raw material sources. Climate and weather conditions affect the location of certain industries. Topography affects demand pattern. For example, in hilly areas with a difficult terrain jeeps may be in greater demand than cars.

Ecological factors like depletion of natural resources, pollution have caused great concern with rapid growth in population and industrialisation, large quantities of water began to be needed for domestic and industrial purposes, transportation, and production of energy and power. The rapid growth of industries have disturbed the ecological balance and polluted the environment. The government policies aimed at the preservation of environmental pollution have resulted in additional responsibilities and problems for business. Boulding says, “Planet earth was like a spaceship in danger of running out of fuel if it failed to recycle its material.” The land resource that is the total geographical area of India is 329 m. ha. of which 42 m. ha. (14%) of the total reporting area in India is classified as Barren Land and area under non-agricultural uses.

Forests: Forests are important natural resource of India. Forests play an important role in control floods; protect soil erosion supply of timber, fuel, fodder and many more products. They are the natural habitat for biodiversity and repository of genetic wealth. India has forests on 68 million hectares of land that is the 22 per cent of the total geographical area. As per the Forest Policy of 1952, it should be 33 per cent of the land resource. The Forest Policy declared in 1952 failed to save forests in India. In the year 1988 government of India announced its new Forest Policy. The important features of this policy are:

Role of Tribal: The role of tribal in protection, regeneration, and development of forests was recognised and emphasised. The new policy enunciates that all agencies responsible for forest management should cooperate and associate tribal people in conservation of forest wealth.

Discouragement of Forest based Industries: The new forest policy states that no forest-based enterprises except at the village and cottage level will be set-up in future, unless it is first cleared, after careful study of the availability of raw materials.

End the system of private forest contractors: The new forest policy puts a ban on private forest contractors and replaces the system by tribal cooperative institutions and government corporations, and other such institutions.

Forest land not to be diverted to non-forest uses: In this policy it was decided that the government will not accept the land diversion for non-forest uses.

Participatory forests management system: This new system involves rural people particularly women and tribal community in the forest work.

Mineral Resource:

The development and management of mineral resources play a major role in the industrial growth of a nation. Coal, Iron, Mica, Copper, Lead, Zinc, manganese, Petroleum, Uranium, etc., are the vital resources for the development of a country. Thorium and Uranium the autonomic energy minerals are very important. The government of India passed an amendment in the act with passing of new mines and minerals Act in 1994, which opens the mining, sector for the FDI. The new policy also empowers states to grant prospecting licenses /mines leases with prior approval of the central government except in few cases. It also removes restrictions on equity holding by foreign nationals in a mining company. The major objective of this amendment was to minimise the adverse effects of mineral development on forests, environment, and ecology through appropriate protective measures.

The main source of energy is Coal and Oil. But oil has created serious threats for future growth. The need of the time therefore is, that business person should be aware of the threats and opportunities associated with the environment:

a.       shortages of strategic resources;

b.      increased cost  of energy;

c.       increased level of pollution; and

d.      government intervention in natural resource management

Ecologist and environmentalists believe that one of the principal reasons for the existence of the environmental problems stems from too much emphasis on growthby-industrialised nations. They claim that economic growth has been made possible only at the expanse of environment. Fast growth has resulted in fantastic growth in population and demands of the society. Increased production and consumption   had unscrupulously released waste and pollutants in air, water, seas, rivers, lakes, etc. These externalities were not the part of their cost structure and perhaps this was due to the wrong emphasis on GNP as a measure of growth. Countries feel highly satisfied if their GNP is increasing year after year. On this basis, they claim that they are developing fast. Although economists like Samuelson has attempted to give an alternative measure of growth namely, Net Economic Welfare (NEW) but much has not been done in this direction. The growing consciousness and the blame put on the activities of businesspersons led them to adopt new standards. In some cases, government introduced fresh legislative measures penalty, fine, and punishment for misuse of resources. Now, businesspersons are following the new guidelines but there is a tendency to adopt short cuts and ignore environmental measures.

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