Business Enviroment and Entrepreneurship

STUDY MATERIAL
FOUNDATION PROGRAMME

BUSINESS ENVIRONMENT
AND
ENTREPRENEURSHIP
PAPER 1

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i


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ii


FOUNDATION PROGRAMME – IMPORTANT NOTE
The study material has been written in lucid and simple language and conscious efforts have been made to
explain business environment, different forms and functions of organizations, basic elements of business
and mercantile laws and concept of entrepreneurship. This study material has been divided into three main
parts–
Part-A

Business Environment,

Part-B

Business Laws, and

Part-C

Entrepreneurship

The institute has decided that the first examination for Foundation Programme under new syllabus will be held

from December 2012 session in the Optical Mark Recognition (OMR) format, whereby students are required to
answer multiple choice questions on OMR sheet by darkening the appropriate choice by HB pencil. One mark
will be awarded for each correct answer. There is NO NEGATIVE mark for incorrect answers.
The specimen OMR sheet is appended at the end of the study material. There are two self test question papers
in the study to acquaint students with the pattern of examination. These are for practice purpose only, not to be
sent to the institute.
For supplementing the information contained in the study material, students may refer to the economic and
financial dailies, commercial, legal and management journals, Economic Survey (latest), CS Foundation Course
Bulletin, Suggested Readings and References mentioned in the study material and relevant websites.
The objective of the study material is to provide students with the learning material according to the syllabus of
the subject of the Foundation Programme. In the event of any doubt, students may write to the Directorate of
Academics and Professional Development in the Institute for clarification at
Although due care has been taken in preparing and publishing this study material, yet the possibility of errors,
omissions and/or discrepancies cannot be ruled out. This publication is released with an understanding that the
Institute shall not be responsible for any errors, omissions and/or discrepancies or any action taken on the basis
of contents of the study material.
Should there be any discrepancy, error or omission noted in the study material, the Institute shall be obliged if
the same are brought to its notice for issue of corrigendum in the CS Foundation Course Bulletin.

iii


SYLLABUS
PAPER 1: BUSINESS ENVIRONMENT AND ENTREPRENEURSHIP
Level of Knowledge: Basic Knowledge
Objective: To give orientation about different forms of organizations, functions in organizations, business
strategies and environment, along with an exposure to elements of business laws and entrepreneurship.

PART A: BUSINESS ENVIRONMENT (30 MARKS)
1. Business Environment

– Introduction and Features
– Concepts of Vision & Mission Statements
– Types of Environment:
– Internal to the Enterprise
– Value System, Management Structure and Nature, Human Resource, Company Image and
Brand Value, Physical Assets, Facilities, Research & Development, Intangibles, Competitive
Advantage
– External to the Enterprise
– Micro: Suppliers, Customers, Market Intermediaries
– Macro: Demography, Natural, Legal & Political, Technological, Economy, Competition, Sociocultural and International
– Business Environment with reference to Global Integration
2. Forms of Business Organization
Concept and Features in relation to following business models:
– Sole Proprietorship
– Partnership
– Company
– Statutory Bodies and Corporations
– HUF and Family Business
– Cooperatives, Societies and Trusts
– Limited Liability Partnership
– Other Forms of Organizations
3. Scales of Business
– Micro, Small And Medium Enterprises
– Large Scale Enterprises and Public Enterprises
– MNCs

iv


4. Emerging Trends in Business

Concepts, Advantages and Limitations:
– Network Marketing
– Franchising
– Business Process Outsourcing (BPO)
– E-Commerce
– M-Commerce
5. Business Functions
– Strategic: Planning, Budgetary Control, R&D, Location of a Business, Factors affecting Location,
Decision Making and Government Policy
– Supply Chain: Objectives, Importance, Limitations, Steps, Various Production Processes
– Finance: Nature, Scope, Significance of Financial Management, Financial Planning (Management
Decisions – Sources of Funds, Investments of Funds, Distribution of Profits)
– Marketing: Concept, Difference Between Marketing and Selling, Marketing Mix, Functions of Marketing
– Human Resources: Nature, Objectives, Significance
– Services: Legal, Secretarial, Accounting, Administration, Information and Communication Technology

PART B: BUSINESS LAWS (40 MARKS)
6. Introduction to Law
– Meaning of Law and its Significance; Relevance of Law to Modern Civilized Society; Sources of Law;
Legal Terminology and Maxims; Understanding Citation of Cases
7. Elements of Company Law
– Meaning and Nature of Company; Promotion and Incorporation of a Company; Familiarization with the
Concept of Board of Directors, Shareholders and Company Meetings; Company Secretary;
E-Governance
8. Elements of Law relating to Partnership
– Nature of Partnership and Similar Organizations - Co-Ownership, HUF; Partnership Deed; Rights and
Liabilities of Partners: New Admitted, Retiring and Deceased Partners; Implied Authority of Partners
and its Scope; Registration of Firms; Dissolution of Firms and of the Partnership
9. Elements of Law relating to Contract
– Contract - Meaning; Essentials of a Valid Contract; Nature and Performance of Contract; Termination

and Discharge of Contract; Indemnity and Guarantee; Bailment and Pledge; Law of Agency
10. Elements of Law relating to Sale of Goods
– Essentials of a Contract of Sale; Sale Distinguished from Agreement to Sell, Bailment, Contract for
Work and Labour and Hire-Purchase; Conditions and Warranties; Transfer of Title by Non-Owners;
Doctrine of Caveat Emptor; Performance of the Contract of Sale; Rights of Unpaid Seller
11. Elements of Law relating to Negotiable Instruments
– Definition of a Negotiable Instrument; Instruments Negotiable by Law and by Custom; Types of
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Negotiable Instruments; Parties to a Negotiable Instrument - Duties, Rights, Liabilities and Discharge;
Material Alteration; Crossing of Cheques; Payment and Collection of Cheques and Demand Drafts;
Presumption of Law as to Negotiable Instruments

PART C: ENTREPRENEURSHIP (30 MARKS)
12. Entrepreneurship
– Introduction to Concept of Entrepreneurship, Traits of Entrepreneur, Entrepreneurship: Who is
an Entrepreneur, Why Entrepreneurship
– Types of Entrepreneurs: Idealist, Optimizer, Hard Worker, Sustainer, Improver, Advisor, Superstar,
Artiste, Visionary, Analyst, Fireball, Juggler, Hero, Healer.
– Distinction Between Entrepreneur and Manager
– Entrepreneurship and Intrapreneurship: Definition, Features, Examples and Difference
13. Entrepreneurship – Creativity and Innovation
– Entrepreneurial Venture Initiation: Sensing Entrepreneurial Opportunities, Environment Scanning,
Market Assessment
– Assessment of Business Opportunities: Identification of Entrepreneurial Opportunities, Selection
of an Enterprise, Steps in setting up of an Enterprise
– Entrepreneurial Motivation: Meaning and Concept, Process of Achievement Motivation, Self-efficacy,
Creativity, Risk Taking, Leadership, Communication and Influencing Ability, Mentoring and Planning
Action

– Developing Effective Business Plan
14. Growth & Challenges of Entrepreneurial Venture
– Strategic Planning for Emerging Venture: Entrepreneurial Opportunities in Contemporary Business
Environment
– Financing the Entrepreneurial Business: Resource Assessment -Financial and Non – Financial,
Fixed and Working Capital Requirement, Funds Flow, Sources and Means of Finance.
– Managing the Growing Business: Effecting Change, Modernization, Expansion, and Diversification.

vi


LIST OF RECOMMENDED BOOKS*
PAPER 1 : BUSINESS ENVIRONMENT AND ENTREPRENEURSHIP
READINGS
1. M.C. Shukla

A Manual of Mercantile Laws; Sultan Chand & Company, New Delhi.

2. N.D. Kapoor

Mercantile Law; Sultan Chand & Co., New Delhi.

3. N.D. Kapoor &
Dinkar Pagare

Business Laws and Management; Sultan Chand & Sons.

4. M.C. Kuchhal

Mercantile Law; Vikas Publishing House, New Delhi.

5. P. P. S. Gogna

A Textbook of Business Law; Sultan Chand & Company, New Delhi.

6. Poonam Gandhi

Business Studies; Dhanpat Rai & Company Private Limited, Delhi.

7. NCERT

Business Studies Text Book for Class 10+2

8. D. Chandra Bose

Business Laws; PHI Learning Pvt. Ltd.

REFERENCES
1. Sen & Mitra

Commercial Law; The World Press Pvt. Ltd., Calcutta.

2. Ian Wirthington &
Chris Britton

The Business Environment; Pearson Education Ltd., England.

3. Raymond W.Y. Kao

Entrepreneurship and Enterprises Development

*This study material is sufficient from the point of view of syllabus. The students may refer these books for further knowledge and study
of the subject.

vii


CONTENTS
PART A: BUSINESS ENVIRONMENT
LESSON 1
BUSINESS ENVIRONMENT
Introduction

3

Meaning of Business Environment

3

Features of Business Environment

4

Importance of Business Environment

4

Vision and Mission Statement

5

Types of business environment

6

– Internal Environment

6

– External Environment

8

– Micro Environment

8

– Macro Environment

10

Review Questions

12

Global Integration and Business Environment

12

– Liberalisation

13

– Privatisation

13

– Globalisation

14

LESSON ROUND UP

16

GLOSSARY

17

SELF-TEST QUESTIONS

18
LESSON 2
FORMS OF BUSINESS ORGANISATION

Introduction

20

Forms of Business Organisation

21

Sole Proprietorship

22

– Characteristics

22

– Advantages of Sole Proprietorship

23

– Disadvantages of Sole Proprietorship

24

Review Questions

24
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Hindu Undivided Family

25

– Meaning

25

– Characteristics

25

– Advantages of Joint Hindu Family Business

26

– Disadvantages of Joint Hindu Family Business

26

– Suitability of Joint Hindu Family Business

26

Review Questions

26

Partnership

27

– Meaning

27

– Characteristics

27

– Advantages of Partnership Firm

28

– Disadvantages of Partnership Firm

29

– Suitability of Partnership Firm

29

Review Questions

30

Company

30

– Meaning

30

– Characteristics

30

– Advantages of Company

31

– Disadvantages of Company

32

– Suitability of Company

33

Review Questions

33

Statutory Bodies and Corporations

33

– Meaning

33

– Features

34

– Advantages of a Statutory Corporation

34

– Disadvantages of a Statutory Corporation

34

– Suitability

35

Co-operatives, Societies and Trusts

35

– Meaning

35

– Characteristics

37

– Advantages of Co-operatives

37

– Disadvantages of Co-operatives

38

– Suitability of Co-operatives

39

Review Questions

40
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Page

Limited Liability Partnership

40

– Meaning

40

– Characteristics of LLP

40

– Advantages of LLP

41

– Disadvantages of LLP

42

Differences between Various Forms of Business Organisation

42

Choice of an Appropriate Form of Business

45

Other Corporation Classifications

46

LESSON ROUND UP

47

GLOSSARY

47

SELF-TEST QUESTIONS

48

LESSON 3
SCALES OF BUSINESS

Introduction

52

Micro Enterprises

52

Small Scale Enterprises

53

– Meaning and Concept of Small Scale Industry

53

– Role of Small Scale Industries in the Indian Economy

54

Large Scale Enterprises

55

Public Enterprises

55

– Meaning of Public Enterprises

56

– Characteristics of Public Enterprises

56

– Organisation of Public Enterprises

57

– Current Scenario

57

Review Questions

59

Multinational Corporations (MNCs)

59

– Why the drive for MNCs?

60

– Merits of Multinational Companies

62

– Advantages of the MNC’s to the Host Countries

62

– Advantages of Multinationals to Home Countries

62

– Demerits of Multinational Companies

63

LESSON ROUND UP

64
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Page

GLOSSARY

64

SELF-TEST QUESTIONS

64

LESSON 4
EMERGING TRENDS IN BUSINESS

Network Marketing

68

– Meaning

68

– Advantages of Network Marketing

68

– Disadvantages of Network Marketing

68

Franchising

69

– Meaning

69

– Features of Franchising

69

– Advantages of Franchising

70

– Disadvantages of Franchising

70

Difference between Franchising/ Distributorship/ Agency

71

Business Process Outsourcing (BPO)

71

– Meaning

71

– Need for Outsourcing of Services

72

– Advantages of BPO

72

– Disadvantages of BPO

73

E-Commerce

73

– Meaning

73

– Classification of E-Commerce

74

– Advantages of E-Commerce

74

– Disadvantages of E-Commerce

75

M-Commerce

76

– Meaning

76

– Advantages of M-Commerce

76

– Limitations of M-Commerce

77

– Future of M-Commerce

77

LESSON ROUND UP

77

GLOSSARY

78

SELF TEST QUESTION

78
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LESSON 5

BUSINESS FUNCTIONS
Business Functions

82

– Meaning of Strategy

82

– Strategy at Different Levels of a Business

82

– Planning

83

– Meaning of Planning

83

– Budgetary Control

83

– Research and Development (R&D)

85

– Location of Business

85

– Factors affecting Location of Business

85

– Decision Making

86

– Government Policy

86

Supply Chain

86

– Objectives

87

– Importance

87

– Production - Types of Production Method

87

– Different Terms of ‘POM’ under Supply Chain Management.

88

– Introduction

88

– Job Method

88

– Batch Method

88

– Flow Methods

88

Finance

89

– Meaning of Business Finance

90

Financial Management

90

Nature, Significance and Scope of Financial Management

90

– Scope of Financial Management

91

Core Financial Management Decisions

91

– Financial Planning

92

Marketing Management

93

– Difference between Marketing and Selling

93

– Marketing Mix

94

– Functions of Marketing

94
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Human Resource

95

– Nature

96

– Objectives of Human Resource Management

96

– Scope

96

Services

97

– Legal

97

– Secretarial Functions

97

– Accounting

98

– Administration

98

– Information and Communication Technology Function

98

LESSON ROUND UP

99

GLOSSARY

100

SELF-TEST QUESTIONS

101

PART B : BUSINESS LAWS
LESSON 6
INTRODUCTION TO LAW

Law – An Introduction

105

– Natural School

105

– Positivistic Definition of Law

105

– Historical Definition of Law

106

– Sociological Definition of Law

106

– Realist Definition of Law

106

Significance of Law

107

Sources of Indian Law

107

Principle Sources of Indian Law

108

– Customs or Customary Law

108

– Judicial Decision or Precedents

110

– Doctrine of Stare Decisis

112

– Ratio Decidendi

112

– Obiter Dicta

112

– Statutes or Legislation

112

– Personal Law

113

Secondary Source of Indian Law

114
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Page

– Justice, Equity and Good Conscience

114

– Sources of English Law

114

– Mercantile or Commercial Law

115

– Mercantile Law in India

116

Review Questions

117

Legal Terminology and Maxims

117

Understanding Case Citation

119

LESSON ROUND UP

121

GLOSSARY

122

SELF-TEST QUESTIONS

122
LESSON 7
ELEMENTS OF COMPANY LAW-I

Company – Meaning and Characteristics

126

Company as Distinguished from other Associations of Persons

128

Lifting the Corporate Veil

132

Kinds of Companies

133

– Private Company [Section 3(1)(iii)]

134

– Public Company [Section 3(1)(iv)]

135

– A Company Limited by Shares

136

– A Company Limited by Guarantee

136

– An Unlimited Company

136

– An Association not for Profit

136

– Government Companies (Section 617)

137

– Foreign Companies

137

– Holding and Subsidiary Companies (Section 4)

138

Review Questions

139

Promotion and Incorporation of a Company

139

– Functions of a Promoter

140

– Legal Position of a Promoter

140

Registration and Incorporation of Companies

140

Commencement of Business

144

How does a company function?

145

LESSON ROUND UP

145
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Page

GLOSSARY

146

SELF-TEST QUESTIONS

146

LESSON 8
ELEMENTS OF COMPANY LAW-II
Directors

150

– Meaning of a Director [Section 2(13)]

150

– Who can be a Director?

150

– Who cannot be a Director? (Section 274)

150

– Only Individuals to be Directors

151

– Number of Directors

151

– Appointment of Directors

151

– Appointment of First Directors

152

– Appointment by Shareholders in General Meeting (Sections 255-256)

152

– Appointment by the Board

152

– Appointment by the Central Government (Section 408)

152

– Removal of Directors

152

– General Powers vested in the Board (Section 291)

153

– Powers to be exercised only at Board Meetings (Section 292)

154

– Managerial Personnel

154

– Definition of Managing Director [Section 2(26)]

154

– Disqualifications of Managing Director (Section 267)

155

– Manager [Section 2(24)]

155

– Disqualifications of Manager (Section 385)

155

– Tenure of Office of a Managing Director or Manager

155

Review Questions

156

Shareholders

156

– Voting Rights of Shareholders

159

Review Questions

159

Meetings

159

– Meaning of a Meeting

159

– Kinds of Company Meetings

159

– Statutory Meeting

160
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– Annual General Meeting

161

– Extraordinary General Meetings

163

– Who May Call Extraordinary General Meeting?

163

– Calling of Extraordinary General Meeting on Requisition

163

– Calling of Extraordinary General Meeting by CLB/NCLT

164

– Class Meetings (Section 106)

164

– Meetings of Debenture holders

164

– Meetings of Creditors

164

– Meetings of the Board of Directors

165

Review Questions

166

Secretary

166

– Definition of Secretary

166

– Qualifications of a Company Secretary

166

– Appointment of a Secretary

167

– Powers of Secretary

167

Duties of a Secretary

168

Role of Secretary in a Company

169

– Statutory Officer

170

– Co-ordinator

170

– Administrative Officer

172

E-Governance

173

– E-Governance and MCA-21

174

– Scope

174

LESSON ROUND UP

174

GLOSSARY

175

SELF-TEST QUESTIONS

176
LESSON 9
INDIAN PARTNERSHIP ACT, 1932

Nature of Partnership

180

– Definitions

180

– Essentials of a Partnership and True Test of Partnership

180

– Formation of Partnership

182
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– Partnership Deed

182

– Contents of Partnership Deed

182

Classification of Partnership

183

Co-ownership and Partnership

184

Hindu Joint Family Firm and Partnership

184

Company and Partnership

184

Change in a Firm

185

Partnership Property

185

Kinds of Partners

186

Review Questions

188

Minor Admitted to the Benefits of Partnership

188

– Rights of Minor

188

– Liabilities of Minor

188

– Relation of Partners to one another

189

Rights of Partners

189

Duties of Partners

190

Relation of Partners to Third Parties

190

Partners as Agents

190

Authority of a Partner

191

– Implied Authority of a Partner

191

– No Implied Authority

191

Extent of Partners’ Liability

192

– Liability of the Firm for Torts

192

– Liability of an Incoming Partner

192

– Liability of an Outgoing or Retiring Partner

192

Death or Insolvency

192

Review Questions

193

Dissolution

193

– Dissolution of Partnership

193

– Dissolution of the Firm

193

– Dissolution of the Firm through Court

194

– Effect of Dissolution

194

– Right to Return of Premium

195
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– Settlement of Accounts on Dissolution

195

– Remaining Deficiencies of Capital

195

– Goodwill

195

Registration of the Firm

196

Effects of Non-Registration

196

Specific Performance of Partnership Agreement

197

Suit for Libel or Slander

197

LESSON ROUND UP

198

GLOSSARY

199

SELF-TEST QUESTIONS

199
LESSON 10
INDIAN CONTRACT ACT, 1872

Meaning and Nature of Contract

202

Essential Elements of a Valid Contract

203

– Offer or Proposal and Acceptance

204

– Intention to Create Legal Relations

208

– Consideration

208

Privity of Contract

209

Flaws in Contract

212

– Void Agreement

212

– Voidable Contract

213

– llegal Agreement

213

– Flaw in Capacity

213

– Mistake

217

– Misrepresentation

219

– Wilful Misrepresentation or Fraud

220

– Coercion

221

– Undue Influence

221

– Legality of Object

222

Wagering Agreements

226

Contingent Contract

227

Nature of Quasi-Contracts

228
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Quantum Meruit

229

Discharge or Termination of Contracts

230

Performance of Contracts

230

Discharge by Mutual Agreement or Consent

232

Discharge by Lapes of Time

233

Discharge by Operation of the Law

233

Discharge by Impossibility or Frustration

233

Discharge by Breach

234

Anticipatory Breach of Contract

235

Remedies for Breach

235

Contract of Indemnity and Guarantee

238

– Meaning of Indemnity

238

– Rights of Indemnity Holder when Sued

239

– Meaning of Contract of Guarantee

239

– Extent of Surety’s Liability

240

– Kinds of Guarantees

240

– Revocation of Continuing Guarantee

240

– Rights of Surety

241

– Discharge of Surety

241

Contract of Bailment and Pledge

242

Bailment

242

– Gratuitous Bailment

242

– Bailment for Reward

243

– Duties of Bailee

243

– Bailees Particular Lien

243

– Particular and General Lien

244

– Duties of Bailor

244

– Termination of Bailment

244

– Finder of Lost Goods

245

– Carrier as Bailee

245

Pledge

245

– Rights of the Pawnee

246

– Rights of Pawnor

246
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Page

– Pledge by Non-owners

246

Law of Agency

247

– Definition of Agent

247

– Creation of Agency

247

– Classes of Agents

248

– Sub-Agent

248

– Mercantile Agents

248

– Duties of the Agent

249

– Rights of Agents

250

– Responsibilities of Principal to Third-parties

250

– Principal Liable for Agent’s Torts

251

– Personal Liability of Agent to Third-party

251

– Meaning of Authority Coupled with Interest

251

– Termination of Agency

252

– When Agency is Irrevocable

252

– When Termination Takes Effect

252

LESSON ROUND UP

253

GLOSSARY

255

SELF-TEST QUESTIONS

258
LESSON 11
SALE OF GOODS ACT, 1930

Introduction

262

Contract of Sale of Goods

262

Subject matter of Contract of Sale of Goods

263

Conditions and Warranties

265

Doctrine of Caveat Emptor

269

Passing of Property or Transfer of Ownership

269

Passing of Property in Specific Goods

270

Ownership in Unascertained Goods

270

Passing of Risk

271

Transfer of Title by Person not the Owner

271

Exception to the General Rule

272
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Performance of the Contract of Sale

272

Review Questions

275

Unpaid Seller

275

Auction Sales

277

Trading Contracts Involving Rail or Sea Transit

277

LESSON ROUND UP

278

GLOSSARY

280

SELF-TEST QUESTIONS

281
LESSON 12
NEGOTIABLE INSTRUMENTS ACT, 1881

Definition of a Negotiable Instrument

284

Classification of Negotiable Instruments

285

Review Questions

286

Kinds of Negotiable Instruments

286

– Promissory Note

286

– Bills of Exchange

287

– Cheque

291

Banker

293

Customer

293

Liability of a Banker

293

Payment in Due Course

295

Collecting Banker

295

Liability of Endorser

296

Crossing of Cheques

296

Modes of Crossing

297

Holder

299

Holder in Due Course

299

Capacity of Parties

300

Liability of Parties

300

Review Question

302

Negotiation

302

Importance of Delivery

303
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Negotiation by Endorsement and Delivery

303

Endorsement

304

Classes of Endorsement

304

Forged Endorsement

305

Discharge

309

– Discharge of the Instrument

309

– Discharge of a Party or Parties

309

Retirement of a Bill under Rebate

311

Hundis

311

Presumptions of Law

312

Payment of Interest in case of Dishonour

312

Penalties in case of Dishonour of Cheques

312

LESSON ROUND UP

315

GLOSSARY

316

SELF-TEST QUESTIONS

317
PART C: ENTREPRENEURSHIP
LESSON 13
ENTREPRENEURSHIP

Introduction

321

– Four Key Elements of Entrepreneurship

321

Traits of an Entreprenuer

322

– Who is an Entrepreneur?

323

Characteristics of an Entrepreneur

324

Why Entrepreneurship

324

Types of Entrepreneur

325

Entrepreneur vs. Manager

327

Review Question

328

Intrapreneurship

328

– Meaning

328

– Features of Intrapreneurship

329

– Key Characteristics of Intrapreneurship

329

Difference between an Entrepreneur and an Intrapreneur
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Page

LESSON ROUND UP

331

GLOSSARY

332

SELF-TEST QUESTIONS

333
LESSON 14

ENTREPRENEURSHIP – CREATIVITY AND INNOVATION
Introduction

336

Creativity

336

– Principle of Creativity

336

Innovation

336

– Principle of Innovation

337

Creativity AND Innovation IN AN Entrepreneurial Organization

338

Environment Scanning

338

– SWOT Analysis

339

– PESTLE Analysis

341

– Porter’s Approach to Industry Analysis

343

Environmental Scanning Process

344

Types of Environmental Scanning

345

Market Assessment

345

Review Questions

347

Assessment of Business Opportunities

347

Developing Effective Business Plans

349

– Identify and Evaluate the Opportunity

349

– Developing a Business Plan

350

– Determine the Resources Required

351

– Manage the Enterprise

352

Entrepreneurial Motivation

352

– Meaning and Concept

352

– Need of Entrepreneurial Motivation

352

Conclusion

354

LESSON ROUND UP

355

GLOSSARY

356

SELF-TEST QUESTIONS

357
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LESSON 15
GROWTH & CHALLENGES OF ENTREPRENEURIAL VENTURE
Nature of Planning in Emerging Firms

360

Entrepreneurial Opportunities

361

– Future of Entrepreneurship

361

– Supply of Entrepreneurship and Economic Development

362

– Basic Types of Entrepreneurship

363

– Creating Indian Entrepreneurs

363

– Challenges before Entrepreneur

365

Financing Entrepreneurial Business

367

Growth and Challenges of Entrepreneurship

367

– Effecting Change

369

– Modernisation

369

– Expansion

369

– Diversification

369

LESSON ROUND UP

370

GLOSSARY

371

SELF-TEST QUESTIONS

371
TEST PAPERS 2012

Test Paper 1/2012

373

Test Paper 2/2012

389

xxiv


PART A
BUSINESS ENVIRONMENT
LESSONS
The term business is understood and explained in
different ways by different people. For some, business is an activity, for some it is a method of transacting, for others; it is a method of making money.

People also argue that business is an organized
activity to achieve certain pre-determined goals or
objectives. The concept of business has undergone
a vast change. From a producer driven activity, it
has become consumer centered phenomenon.
While, earlier concept was ‘to sell what is being produced’, the modern concept has become ‘to produce what is being desired’.

1. Business Environment

2. Forms of Business Organisation

3. Scales of Business

The term business environment refers to the aggregate of all forces, factors and institutions which
are internally affecting the business through management structure and policies as well as which
are external to and beyond the control of individual business enterprises; but which influence
their functioning. Business involves activities,
which links an organization with outside world.
Within an organization, a business is governed
by the behaviour of its employees, management
or decision makers. In other words, business
environment may be defined as all those conditions and forces external to a business under
which it operates.

4. Emerging Trends in Business

5. Business Functions

It is in this backdrop, it becomes essential to acquaint
students with nature, complexity and interrelation

among business environmental forces that may act
upon a variety of types of business organizations
and hence, influence business performances.

1