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IGNOU MBA MS-3 (Economic and Social Environment) term-end exam notes free download

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                                            MANAGEMENT PROGRAMME
    Term-End Examination MS-3 : ECONOMIC AND SOCIAL ENVIRONMENT

                                                            Notes-1


                                                     SECTION - A
1. Examine in detail the interaction between political environment and business management with
suitable examples.

2. Analyse the structure and growth of private sector in the country.

3. Explain the importance of Balance of Payments (BOP). Analyse the major features of India's BOP
and their implications.

4. Critically examine the Tax Reforms in terms of Immediate Reforms and Medium Term Reforms.Discuss its impact on the fiscal position of the government.

5. Write short notes on any four of the following :
(a) The Unorganised Sector
(b) Monopolistic and Restrictive Trade Practices
(c) Capital Account Convertibility
(d) Administered Prices

(e) Public debt

                                                   SECTION -B
6. Read the following case and answer the questions given at the end :
                                            Japan a Case Study
Japan in the last sixty years may not have forgotten the defeat in the Second World War,but due to the indomitable spirit of its populace it has come out a winner in the business world, with extremely high growth rate as compared to even its victors. Pre-war Japanese products in India were not considered as of good quality. " Oh! It is a Japanese product " were the derisive words used for the imports from Japan. How this dramatic change took place makes an interesting case study.Japan has no natural resources, is plagued with recurrent earthquakes has very little land and is made up of several islands. Its culture is age old and people are bound by traditions. The transformation from a laidback eastern tradition bound country into a modern fast moving dynamic business potentate has left most theorists
and philosophers agape with wonder.After the war was over and Japan became an ally of the powerful USA , who incidentally took over the country's defence, a fact, which left the Japanese ready to concentrate on nation rebuilding activities. To create wealth for the country, business and industry were the most important planks and they went into these areas with full vigour. This time around the Japanese wanted to drop the tag of poor quality suppliers.For this purpose, they invited business gurus from the USA who toured the country giving their inputs in quality improving techniques. Quick on the uptake, the Japanese improved on the teachings of the gurus and came out with theQuality Circle Programme, which has revolutionized the business world over. Over the
last sixty years, the Japanese innovations in the field of business and industry have underscored
even the success of the giant the USA. Some of their strategic decisions and innovations are given
below.
• Understanding the value of money blocked in inward inventories introduced to the world the Just In Time -JIT- plan for saving of cost to the tune of ten per cent in having virtually no inventories. JIT works well if there is close partnership like co-operation between the firm and the supplier. In turn
it becomes useful to see that the supplier is also having JIT from his suppliers. Such a chain can account for large sums of money being released for the purposes of development and growth.
• Zero defect production came about with the help of TQM and Quality Circle programmes. Firms could eliminate the final product testing and could disband the entire set of engineers involved in the testing process. This led to higher production,lower rejections and savings of raw material and manpower and reworking costs. This made the Japanese competitive in the world.
• Suppliers seized to be necessary evils who never supplied on time gave defective products and always wanted higher prices for their products. Joining hands with suppliers and making them almost their partners, helping them in their JIT and quality programmes gave the firms and the suppliers confidence in each other. The firm has been able to reduce costs by eliminating suppliers assessment for each order placed on him. It has also helped in reducing the time to bring new products in the market.New materials are available from the partnership sources without delay.
• Japanese innovation of small teams, the quality circles, which manage continuous incremental improvements in the firms processes to create low cost and high profit system.
• Japanese firms bring about technological cohesion by using different technology together as tech - fusion as a paradigm shift in the product development areas. Hybrid technologies like opto - electronics mechatronics.
• Japanese firms believe in cross - functional teams and flexible structures in problem solving areas. Product development process time period has been greatly reduced in view of the market demands and shortening product life cycles.Japanese firms believe that if the employees are fully motivated, enjoy job satisfaction and teamwork, they can create better organizational processes and work with total dedication and this is achieved through well - structured programmes like quality circles. Quality circles are engaged in the processes as follows :
(a) Problem finding action
(b) Problem solving function
(c) Solution action plans
(d) Feedback loops
(e) Integrated responsibility
(f) Study of the environment to avoid pitfalls
Problem finding goes down the firm's ladder as even the lowly worker is expected to locate problems, so that they can be nipped in the bud and the need for finding solutions does not arise.Also if the workers find the problems and solutions to the problems, it would be easy during implementation.
Problem solving leads to finding solutions of the market needs, new products and services;
solutions to quality problems, process problems and product differentiation plans of existing products to bring sustainable competitive advantage.Using new ideas in the existing processes the firm arrives at solutions implementation. Most Indian firms do not want to have workers trying to find out the solutions for their own workstation problems, as they consider them unworthy of taking important decisions and they believe that only top managers are capable of finding the solutions to the problems. This leads to solutions being thrust upon the juniors, which they resent and hence do not feel committed to implementing them.Employees Suggestion Plan : While these plans are in place in several countries, they have become the moving spirit for job satisfaction. All suggestions are given due credit and as the suggestions are made after thorough investigations and experimentation, they are implemented. Employees feel highly motivated to see their ideas implemented. Quality circles help generate the suggestions and on an regular basis the Japanese worker keeps sending the suggestions with an yearly average of minimum 50 to maximum 1000 suggestions, where the
average for the American worker comes to about 3.Problems in Japan are considered beneficial
because they provide the firm with impetus to overcome them and improve the firm's efficiency
even further.Japanese business culture believes that for furthering the cause of the firm they need people with good education. The firms believe in collective decision - making with upward flow of
decisions. The main points of their business culture are given below.
• Authority with seniority
• Respect for age
• Life long employemnt
• Loyalty to the firm
• Participation in the quality circles
• Group information and decisions in quality circles
• Emphasis on productivity
• Debt financing is facilitated by the banks
• Slow decision process but fast implementation
Questions :
1. Comapre and contrast the Japanese and Indian cultural stream.
2. How can the Indian business learn from their Japanese counterparts ?

                                                                 Notes-2

                                                           SECTION - A
1. Explain the critical elements of politico - legal environment of business. Give suitable examples.

2. Briefly analyse the objectives and scope of public sector. How far, it has been able to fulfill the
national goals ?

3. Discuss in detail the Nehru - Mahalanobis Model of Growth.

4. Briefly discuss the major trends in India's Foreign Trade since globalisation of the Indian economy.

5. Write short notes on any four of the following :
(a) Economic Growth
(b) Industrial Licensing
(c) External Debt
(d) Liberalisation
(e) High Powered Money

                                                                  SECTION - B
6. (a) Differentiate between liberalisation and globalisation in context of small scale sector of India.
(b) What has been the impact of globalisation on software industry of India.

7. How has the role of government changed in the changing economic environment ? Discuss with
suitable examples.

                                                                      Notes-3

                                                                 SECTION - A
1. What are the important laws relating to functioning and operation of capital markets in India ? Explain with special reference to Securities and Exchange Board of India Act, 1992.

2. Briefly analyze the institutional infrastructure for SSI and critically evaluate its performance.

3. Compare Gandhian Model of Development with Rao - Manmohan Model of Development. Give
your views on the two given models.

4. How is Current Account Convertibility different from Capital Account Convertibility ? Discuss in
the context of present scenario.

5. Write short notes on any four of the following :
(a) Revenue Deficit
(b) Liberalisation
(c) Development banks
(d) Capital Market Reforms
(e) High Powered Money

                                                   SECTION - B
6. Read the following case and answer the questions given at the end.
The proposal of Government of India in 2005 is to charge tax on foreign BPO companies, which
has core work in India. But question here is, why tax only for those who are doing their core work
here ? The logic may be to slow down the growth of MNC in India. But the government is missing
the big picture i.e. the BPO services had tax holiday till 2009. The tax holiday itself was a price
paid by the Indian government to accelerate BPO sector in India, now this sector doing business
almost $ 3.6 billion in just five years in India. The BPO industries may give long-term benefits to
India.It is unjust to change the rules in midway,as government decided to give tax holiday till
2009, this tax holiday itself could have been an incentive for many MNC to base their operations
in India.In one stroke, a business decision involving million of dollars is being made look stupid,
because of this proposal. If example Intel isconsi dered, having development centre in India
to which outsourcing is done by Intel U.S. Intel India is given a cost plus remuneration of say, $
25 per hour. The chip developed by India is sold by Intel US to its customer abroad at a profit $
100. Revenue officer may attempt to tax a significant portion of the $ 100. While computing
in Indian's rightful share of tax.The profit of $ 100 per chip comes from not just chip design work in India, but also great manufacturing development of the market, and consumer marketing, none of which is done in India. To isolate design as the sole determinants of profit is to mistake a part for the whole. Its idea, whose time has not come, foreign companies say they that cannot be taxed if their translations with BPO are at 'arm's' length and question of 'core' and none core activities does not arise.
Case Questions :
(a) What is logic of government behind this ? Do they stop the growth of BPO, MNC in India?
(b) Do you support this proposal ? Explain.

7. (a) Discuss globalisation as a part of India's reform strategy. How has the economy progressed towards globalisation since 1991 ?
(b) "India cannot depend merely on the services sector to drive growth. It needs a balanced growth strategy across all sectors including agriculture and industry". Comment

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