DIMENSIONS AND METHODOLOGY OF BUSINESS STUDIES

MODULE- 1
BUSINESS AND ENVIRONMENT
Objectives of Business
1. Economic Objectives 2. Social Objectives
3. Human Objectives 4. National Objectives
5. Global Objectives
Functions of Business
1. Acquisition of raw materials 2. Production
3. Marketing 4. Management of Resources
5. Management of Finance 6. Book keeping and Accounting
7. Management of Human Resources 8. Management of Information
9. Management of Changes 10. Research and Development
Scope of Business
a. Industry:- business activities related with the extraction, processing and production of
products. The goods produced for the use of consumers is called consumer goods. The
goods produced by industry which is used for further production is called capital goods.
b. b. Commerce:- It is concerned with buying and selling of goods. It includes
activities which are connected to the transfer of goods from the place of production to the
ultimate consumers.
Aids to trade:- activities which help in the purchase of goods and services .
Aids to trade includes:-
a. Transportation
b. Insurance
c. Warehousing
d. Banking
e. Advertising
Role of Business in the Development of a Nation
1. Increases GDP 2. Generation of income
3. Self-employment 4. Creation of job

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5. Payment of taxes 6. Creation of utility and economic value
7. Utilisation of natural resources 8. Manpower development
Forms of Business Organisations
1. Sole Proprietorship: -
the proprietor runs the business by himself
2. Hindu Undivided Family (HUF) or Joint Hindu Family
It is a unique form of business organisation created as per the provisions of the Hindu Act.
The business is managed by the eldest male member in the family known as ‘Karta’. His
liability is unlimited. Other members liability is limited to the extent of their interest in the
family business.
3. Partnership
It means two or more persons join together on the basis of a legal document known as
partnership agreement to achieve a common goal of generating profit. It is formed as per the
provisions of Partnership Act 1932. The liability of all partners is unlimited
4. Joint Stock Company
- A company created as per the provisions of the Companies Act 1956
- the owners of the company is the shareholders
- company is managed by the Board of directors who are the representatives of the
shareholders.
- the liability of all shareholders is limited
5. Co – operative Society
it is a duly registered association of persons voluntarily united together to attain a
lawful common social or economic goal, and offering equal contributions to the capital and
agree to share a reasonable portion of the profit and risk of the undertaking in accordance
with the co- operative principles.
Public Sector Enterprises(PSEs)
PSUs (Public Sector Undertakings) are the government-owned corporations in India,
in which 51% or more than 51% of the paid up share capital is owned by government of
India.
Role and Rationale of Public Enterprises
1. Filling the gap 2. Employment
3. Balanced regional development 4. Optimum utilization of resources

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 5. Mobilization of surplus 6. Self Reliance 7. Public welfare
Non Profit Enterprise (NPE)
Non-profit organization are established to provide aid to society. They are entrenched
to develop charity, commerce, religion, or any other fruitful objects. Their main objective is
to provide services without the intention of earning profits in return, like trading
organizations
Stakeholders of Business
Any group or individual who can influence or who is influenced by any operation of
the business.
Types Of Stakeholders
I. Internal Stakeholders
a. Owners b. Managers c. Employees:
II. External Stakeholders
a. Shareholders b. Customers c. Creditors
d. Suppliers e. Government f. Society
BUSINESS ENVIRONMENT
According to Glueck and Jauch “ the environment includes outside the firm which can lead
to opportunities or threats to the firm. Although there are many factors, the most important
of the sectors are socio- economic, technical, supplier, competitors, and government.”
Components / Types of Business Environment
I. Internal Environment:-
- All the factors inside a business are collectively called internal business
environment.
a. Corporate values- b. Vision, Mission, Objectives and Goals-
c. Organisational structure d. Human resources
e. Financial factors
II. External Environment:-
- all elements outside an organisation that are relevant to its operations. - It
determines the opportunities and risks of the organisation. they are uncontrollable in nature

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a. Micro Environment
it is the immediate environment of the organisation which directly influence its
performance. It is also called task environment or operating environment. It includes all the
external stakeholders of the organisation.
Components of Micro Environment
1. Suppliers 2. Creditors 3. Competitors
4. Customers 5. Public
b. Macro Environment
According to Hill and Jones” the macro environment consists of the broader economic,
social, legal, political, demographic and technological setting within which the industry and
the business units are placed.”
Components of Macro Environment
1. Social Environment- comprises of population, culture, moral values, standard of living,
literacy and education.
2. Legal Environment – consists of laws framed by government to regulate the business
organisations.
3. Economic Environment- it includes the interest rates, exchange rates, and the inflation
rates.
4. Political Environment- it includes the political parties and their policies towards the
business
5. Technological Environment- it consists of research and development, innovation and
technological changes in the country etc.
6. Ecological environment:- it is the natural forces in the environment. It facilitates the
physical environment for the existence of business.
Need and Importance of Environment Analysis
1. Identification of strength 2. Identification of weakness
3. Identification of business opportunities 4. understanding threats and challenges
5. Managing changes 6. Improving performance
7. Input to decision making

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MODELS OF ENVIRONMENT ANALYSIS
1. PEST Analysis:- the method of PEST analysis includes analysis of political factors,
economic conditions, social issues and technological factors while formulating business
decisions.
2. Value Chain Model:- it is based on the assumption that organisation is a system, made up
of several sub systems each with inputs, transformation processes and outputs. The process
of converting inputs to output is referred to as value chain activity.
3. SWOT Analysis:- SWOT stands for Strength, Weaknesses, Opportunities and Threats.
By analysing the internal environment we get the strength and weaknesses and by analysing
the external environment we get opportunities and threats. In this the internal environment is
analysed first and after that the external environment is analysed.
4. TOWS Model:- it stands for Threats, Opportunities, Weaknesses and Strengths. In this
the external environment is analyzed first and after that the internal environment is
analyzed.
5. BCG Model:- also called growth- share matrix. This model analyses companies or
products against their competitors. It will rank companies and products on the basis of their
relative market share and growth rate.

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 MODULE II
BUSINESS IN INDIA
Stages and development of Indian economy since indipendence
1. Mixed Economy 2. Industrialisation
3. Planning Commission of India and 5 year plans 4. Public Sector Enterprises
5. Licensing system 6. Nationalisation of banks
7. Nationalisation of Insurance Companies 8. New Economic Policy- LPG
9. Industrial Growth 10. Technological progress
Public Sector in India
Organisations which are under the ownership and control of government are called
PSU. Created to prevent the concentration of economic power and reduce the inequalities of
income and wealth among people
Role of Public Sector in India
1. Resolving deficiencies 2. Balanced regional development
3. Employment opportunities 4. Contribution to the government
5. Development of society 6. Research and development
7. Social welfare
Role of Private Sector in India
1. Improved standard of living 2. Easy availability of goods and services
3. Competitive prices for essential goods 4. Better value for human capital
5. Employment generation 6. Offer fair prices to farmers for their products
7. Development of more markets 8. Innovation
9. Improved social life 10. Poverty alleviation
11. Better education
Role of Co- Operative Sector in India
1. Rural development 2. Micro finance
3. Reasonable price 4. Promotion of village industries
5. Generation of employment

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Liberalization, Privatization and Globalization
The economy of India had undergone significant policy shifts in the beginning of the
1990s. This new model of economic reforms is commonly known as LPG or Liberalization,
Privatization and Globalization model
Objectives of LPG
1. To increase national and per capita income
2. To make the nation self sufficient in all fields
3. To completely eradicate the problem of unemployment in the country
4. To eradicate poverty and improve the standard of living of the people
5. To achieve balanced economic development and attain equality of income and
wealth among people
6. To reduce the exploitation of people and resource of the country
LIBARALISATION
Economic liberalization is the lessening of government regulations and restrictions in
an economy in exchange for greater participation by private entities.
Liberalization is "the removal of controls" in order to encourage economic development
Objectives of Liberalisation
To boost competition between domestic businesses
To promote foreign trade and regulate imports and exports
Improvement of technology and foreign capital
To develop a global market of a country
To reduce the debt burden of a country
To encourage the private sector to take an active part in the development process.
To reduce the role of the public sector in future industrial development.
To introduce more competition into the economy with the aim of increasing
efficiency.
PRIVATISATION
It means a transfer of ownership, management, and control of public sector
enterprises to the private sector. Privatization can suggest several things, including
migrating something from the public sector into the private sector. Privatization of the
public sector companies by selling off part of the equity of PSEs to the private is known as
disinvestment.

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Objectives of Privatisation
1. reduce government expenditures
2. Improve the performance of PSEs
3. Reduce budget deficit
4. Reduce political intervention on the management of public enterprises
5. Reduce inflation through reduced public spending
6. Increase government receipts through sale of assets
7. Strengthen week areas of private sector
8. Provide goods to consumers at lower cost
9. Accelerate economic growth
Advantages of Privatisation
1. Reduced government intervention
2. Wide variety of products and services
3. Low price and discounts
4. Superior quality
5. Increase bargaining power
6. Generate employment opportunities
7. Increased revenue of the government
Objectives of Disinvestment
The following main objectives of disinvestment were outlined:
To reduce the financial burden on the Government
To improve public finances
To introduce, competition and market discipline
To funding growth and development programmes
To encourage wider share of ownership
To depoliticize non-essential services
To provide better quality products and services to customers
To generate more employment opportunities
To encourage private ownership

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GLOBALISATION
It is a process that aims at joining together different world markets into a single
global market. The major objective of globalisation is the reduction and removal of trade
barriers between national borders in order to facilitate the flow of goods, capital, services,
labour and technology.
Measures of Globalisation in India
1. Devaluation
2. Allowing foreign direct investment
3. The removal of quantitative restrictions on imports
4. The reduction of customs tariffs
5. NRI Schemes
LPG in the Indian context / Impact of New Economic Policy
1. Information Technology Revolution 2. Growth of private sector
3. Industrial growth 4. Increased Gross Domestic Product
5. Increased Foreign Direct Investment flows 6. Increase in exports
7. High growth of service sector 8. Increased employment opportunities
9. Emergence of business process outsourcing 10. Adverse impact on food security
11. Over exploitation of natural resources 12. Threat from multinational companies
BUSINESS PROCESS OUTSOURCING (BPO)
Business process outsourcing (BPO) is a type of outsourcing wherein a third-party
service provider is employed to carry out one or more business functions in a company. The
third party is responsible for carrying out all operations related to the business function.
BPO is also known as subcontracting or externalization.
Objectives of BPO
1. To improve the efficiency of the organisation to attain greater productivity
2. To reduce cost of operation of business
3. To reduce the strength of the work force.
4. To improve the quality of business operations by entrusting it to expert agencies.
5. To focus on core areas such as developing of new products, modification of existing
products etc by delegating a part of the business functions to outside agencies.

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RECENT ECONOMIC INITIATIVES
1. NITI AAYOG
2. MAKE IN INDIA INITIATIVE

1. Niti Aayog: In keeping with the changing times, the Government of India has
decided to set up NITI Aayog (National Institution for Transforming India), in place of the
erstwhile Planning Commission, as a means to better serve the needs and aspirations of the
people of India. An important evolutionary change from the past will be replacing a centre-
to-state one-way flow of policy by a genuine and continuing partnership with the states.
The institution must have the necessary resources, knowledge, skills and, ability to act with
speed to provide the strategic policy vision for the government as well as deal with
contingent issues.
MAKE IN INDIA INITIATIVE
- launched by the prime minister of India in September 2014
- it was devised to transform India into a global design and manufacturing hub by
encouraging both multinational as well as domestic companies to manufacture their
products within the country.
- the initiative is led by the Department of Industrial Policy and Promotion(DIPP)
- its aim is to raise the contribution of manufacturing sector to 25% of the GDP by the year
2025 from the current position

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 MODULE III
TECHNOLOGY INTEGRATION IN BUSINESS

E- COMMERCE
Definition: “any form of business transaction in which the parties interact electronically
rather than by physical exchange or direct physical contact”
Functions of E- Commerce
1. Advertising and shopping 2. Medium of negotiation
3. Payment settlement 4. Information
5. Communication 6. Inventory Management
7. Process Management 8. Data base Management
Need and Importance of E- Commerce
1. Access to a global market 2. Mass marketing
3. Avoiding middlemen 4. Easy and speedy transactions
5. Low cost 6. Effective management of internal processes
7. Wide variety of choices 8. Product/ service enquiry
9. Placing orders 10. Digital Payment
11. Marketing
Benefits of E- Commerce
I. Benefits to the business
II. Benefits to the consumers
III. Benefits to the society
Limitations of E- Commerce
1. Security 2. Lack of privacy
3. Tax issue 4. Fear
5. Product suitability 6. Cultural obstacles
7. High Labour cost 8. Legal issues
9. Technical limitations 10. Huge technological cost

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Types / Models of E- Commerce
1. Business to Consumer(B2C) 2. Business to Business(B2B)
3. Consumer to Consumer (C2C) 4. Consumer to Business (C2B)
5. Business to Employee (B2E) 6. Business to Government (B2G)
7. Peer to Peer (P2P)
M- COMMERCE
Mobile commerce, also known as m-commerce or m commerce, is the use of wireless
handheld devices like cell phones and tablets to conduct commercial transactions online,
including the purchase and sale of products, online banking, and paying bills.
E- PAYMENT SYSTEMS
Electronic payment means paperless monetary transactions. It is defined as a system of
paying for goods or services electronically instead of using cash or cheque.
Types of E Payment Systems
1. Debit Card 2. Credit Card 3. Net Banking
4. Digital Wallet 5. E- Cheque 6. E- Cash
Payment Gateway
It is an e- commerce service that processes electronic payments of e- commerce
transactions. The payment gateway is the infrastructure that allows a merchant to accept
credit card and other forms of electronic payments.

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 MODULE IV
Business Ethics
Business Ethics: Business Ethics as a branch of study deals with the principles, values and
standards that describe right conduct in business. Business Ethics is a system of moral
principles applied in the commercial world. Business ethics provide guidelines for
acceptable behaviour by organizations in both their strategy formulations and day to day
operations.
Objectives of business ethics
• It inculcates moral values in business operations
• Facilitate business – establish right goals, select right ways, make right decisions and
do right actions to ensure honesty and fairness in operations
• Prevent business from achieving goals of shareholders by sacrificing interest of other
stakeholders
• Safeguard the interest of investors
• Avoid discrimination, harassment and ill-treatment of workforce
• It inculcates moral values in business operations
• Facilitate business – establish right goals, select right ways, make right decisions and
do right actions to ensure honesty and fairness in operations
• Prevent business from achieving goals of shareholders by sacrificing interest of other
stakeholders
• Safeguard the interest of investors
• Avoid discrimination, harassment and ill-treatment of workforce
Importance
1. STRONG SUPPORT FROM EMPLOYEES
2. EASY MOBILIZATION OF FUNDS
3. STRONG SUPPORT FROM EMPLOYEES
4. STRONG SUPPORT FROM EMPLOYEES
5. STRONG SUPPORT FROM EMPLOYEES
6. STRONG SUPPORT FROM EMPLOYEES
7. STRONG SUPPORT FROM EMPLOYEES
8. STRONG SUPPORT FROM EMPLOYEES

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Arguments in favour
• Provides tools to decide whether a particular activity should be performed or not
• Helps in ethical decision making – determine good / bad; right and wrong; justice
and injustice etc.
• Creates framework (standards) for doing right actions
• Concerned with value system – value of others, value of society , value of
organisation
• Sets code of conduct – refines actions and performance of business
• Implant moral values – functional areas of business
• Facilitate good governance in organisation
• Ensure Equity in business – avoid discrimination
Arguments against
• Ethics and moral values have no role in business activities – Business activities are
regulated by law
• Moral obligations are fulfilled through compliance with legal formalities
• Moral values and principles are meant for personal life and not applicable in business
• Ethics and business are conflicting areas – cannot be mixed with one another
Social responsibility
Social responsibility means the obligation of business to perform their activities in a
manner that meets the ethical, legal and commercial expectations of the society
Elements of social responsibility
• Economic Responsibility
• Legal Responsibility
• Ethical Responsibility
• Social Welfare
Social responsibility towards stakeholders
• SHAREHOLDERS • EMPLOYEES • CONSUMERS
• CREDITORS • SUPPLIERS • GOVERNMENT
• SOCIETY

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Arguments in favour
• Minimize government regulations and interferences
• Organizations employ huge money and people to achieve objectives. They have
obligation to use them also to achieve social needs
• Organizations use scarce resources of the society – obligation to reimburse services
and benefits
• Essential for long term survival of business
• Necessary for attain unique image for firm in the industry
• Increase sales – improving customer base
• Resolve various problems – increased rate of industrialization, new economic
policies, unfair business practices etc.
Arguments against
• Moral and social issues are irrelevant in business
• Organizations focusing on social responsibility cannot face market competitions and
attain financial progress
• Business organizations are incapable and are not equipped to address social needs
• Society is only one f the stakeholder
• Social welfare is the duty of the government
Corporate governance
Corporate Governance means setting right goals, selecting right paths, making right
decisions and doing right action so as to ensure honesty and fairness in business operations
Importance
• Keeps stakeholders satisfied
• Reduces Legal disputes
• Good Governance
• Customer Satisfaction
• Good relation with employees
• Easy mobilization of capital
• Inculcates moral values in business
• Good business relations

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 MODULE V
Business Research
• According to Clifford Woody
“ Research comprises of defining and redefining problems, formulating hypothesis,
colleting, organizing and evaluating data, making deductions and research conclusions and
at last carefully testing conclusions to determine whether they fit the formulating of
hypothesis”
Objectives of research
1. To extend the knowledge base of human beings
2. To discover the truth
3. To find solutions to problems
4. To verify and test existing theories and facts
5. To develop new concepts and theories
6. To seek new application for existing knowledge
7. To predict future events
8. To assist planning and decision making
Importance of Research
1. Broadens the knowledge base of human beings
2. Discovers the truth
3. Research updates previous researches and its development
4. Develops new application of existing technology
5. Find solution to problems
6. Promotes planning and decision making
7. Promotes Professionalism
Approaches to Research
1. Quantitative Approach: Quantitative research is an organized process in which
numerical data are employed to gather information about a phenomenon. The objective of
quantitative approach is to ascertain the accuracy of generalizations suggested by the theory.
In quantitative approach, researcher remains unbiased, objective and deductive while
collecting, analyzing and interpreting data.

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2. Qualitative Approach: Qualitative research is gathering and studying data by
observing what people do and say. Collection of data from a relatively small group.
Personal judgement of researcher highly influences the process.
Qualitative approach is a naturalistic approach. It helps to understand the behavior in a
natural setting.
Inductive Reasoning
• Inductive reasoning makes broad generalizations from specific observations.
• Basically, there is data, then conclusions are drawn from the data. This is called
inductive reasoning. Qualitative type of research is inductive in nature
• Bottom – Up approach
Deductive Reasoning
Deductive reasoning, or deduction, starts out with a general statement, or hypothesis, and
examines the possibilities to reach a specific, logical conclusion. The scientific method uses
deduction to test hypotheses and theories. Deductive reasoning evolves from the more
general to the more specific. Top- down approach
Types of research
• Pure Research • Applied Research • Exploratory Research
• Descriptive Research • Empirical Research • Analytical Research
Significance of business research
• Solution for business problems • Gain new business knowledge
• Good decision making • Best quality products and services
• Suitable market and customers • Good competition strategies
• Selection of best employees • Efficient management of funds
• Expansion of markets • Customer satisfaction
Research process
1. Identify the problem 2. Review the Literature
3. Clarification of the problem 4. Define terms and concepts
5. Formulation of Objectives 6. Construction of Hypothesis
7. Preparation of Research Design 8. Determining Sample Design
9. Collection of Data 10. Analysis of Data
11. Report the Findings

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Research report
• Purpose of research report is the communication of findings
• Effective report presents and analyses facts and evidence that are relevant to the
specific problem in structured way
• Good report facilitates an effective communication of a good research to the public
Contents of research report
1. Front matter
a. TITLE PAGE b. PREFACE
c. AUTHORISATION CERTIFICATE d. CONTENTS PAGE
e. LIST OF TABLES AND FIGURES f. ABBREVIATIONS
2. Subject matter
a. INTRODUCTION b. Review of Literature
c. Research Design d. Data Analysis and Interpretation
e. Summary & Conclusion f. Recommendations
g. Suggestions for further research
3. END matter
a. Appendices b. Glossary c. Bibliography
Research methodology
Research methodology can be referred as a science studying the methods, techniques,
process and programmes of research
Management research
• Management Research is a systematic and in-depth study or
• Identification of opportunities, alternative course of action and problems
•In order to choose the best opportunity or course of action or to find solution to problems
by way of collecting, analyzing and interpreting relevant data and information
Objectives
• Helps managers to analyze crucial managerial issues
• Helps organizations to solve business problems
• Facilitate business organizations to take prompt decisions

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• Effectively discharge managerial functions – planning, organizing, staffing, directing
and controlling
• Identify various opportunities and choose best course of action
• Development of new managerial concepts and practices
• Develop innovative products, technologies and method of production
• Modification of existing products
• Suitable mechanism for managing funds
• Devise constructive HR polices

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