Business management 2017 18 unit no 1

Business Management
COURSE CODE:- 304188
(WITH EFFECT FROM ACADEMIC YEAR 2017-18)
Prof. P. M. Dahale
BUSINESS MANAGEMENT PROF. P. M. DAHALE 1

Unit I :Basics of Business Management
Introduction, Definition of management, characteristics of management, functions of management -
Planning, Organizing, Staffing, Directing, Co-ordination, Controlling, Motivating, Communication,
Decision Making, Principles of management – F.W.Taylor, Henry Fayol, Elton Mayo,
Administration and management, Nature of management, levels of management, scientific
management, managerial roles, Forms of Organization- Line , Line –staff,committee etc, Dist
Business sectors & forms of business organizations- private sector,Cooperative sectors, public sector,
joint sector, Services sector, Various forms of business organizations – Sole Proprietorship,
Partnership firms, Joint stock companies -their features, relative merits, demerits & suitability.
Concept of globalization

Introduction of Management
• Management is one of the most imperative and
interesting disciplines of business.
• Coordinating work activities so that they are
completed efficiently and effectively with and
through other people
• Every product we use, every service we receive
and every action we take is provided or affected
by organizations. These organizations require
managers.

Definition of Management
• Management refers to all those
persons who are concerned with
management of the organization.
Such persons are given
responsibilities with authority to
execute policies of business.
• Management is art of getting
things done through and with
people in formally organized
groups.

Continue…….
It defines aims and objectives of a business
It set down plans, policies,procedures,programms,objectives of business
It brings together various factors like: men, money, machine, methods, market
It makes the best possible use of all resources and factors of production
It provides conditions in which persons who are associated with the organization derive
maximum benefit and satisfaction.

Characteristics of Management
Management Is Goal Oriented
Management Integrates Human, Physical& Financial Recourses
Management Is Continuous
Management Is Time Oriented
Management Is all Pervasive
Management Is a Group Activity
Management Is Linked With other Fields of Study

Management Is Goal Oriented
• Management is highly goal oriented activity.
• Success is measured in terms of the
achievements of predetermined goals or
objectives.
• Example: If an organization decides to provide
better quality products to their consumers, then
management directs the required manpower
and resources in the proper direction to get the
expected results.

Management Integrates Human,
Physical & Financial Resources
In any organization the different resources used are humans, machines, materials,
financial assets ,buildings etc.
Humans have to work with non human resources to perform their jobs.
Management Integrates human efforts to those non human resources. It brings
harmony among available resources.

Management Is Continuous
• Management involves continuous
handling of problems and issues.
• It is an ongoing process.
• It includes the problem identification and
finding out the solution by taking
appropriate steps.
• Management is not only concerned with a
particular department like production or
human resources, it even involves
marketing, advertisement and so on

Management Is Time Oriented
• Management has to always ensure that the production
schedules are met and the targets are achieved.
• All targets are always set in accordance with the time
and the results are also measured in terms of time.
• The management has to ensure that it manages
particular features properly and is always relates it to the
other features of management.

Management Is all Pervasive
Management is required in all types of organizations including political, social,
cultural or business as it assist and directs various efforts towards a definite goal.
Thus colleges, hospitals, business firms, clubs, government organizations require
management.
Irrespective of the size or type of organization where more than one person is
involved needs management.

Management Is a Group Activity
Management is concerned with the group
activity rather than an individual’s
performance.
The efforts are measured in terms of groups
to achieve predetermined goal or
objectives.
To accomplish the objectives of an
organization every individual from the
organization needs to work in the team

Management Is Linked With Other
Fields of Study
1. Anthropology
2. Economics
3. Philosophy
4. Political Science
5. Psychology
6. Sociology

Continue…….
1. Anthropology:
- Anthropology is the study of societies. It helps to learn about humans and their activities.
- It also elucidates the differences in fundamental values, attitudes and behavior among people in
different countries as well as even within different organizations
BUSINESS MANAGEMENT PROF. P. M. DAHALE
2. Economics:
-This is a study of the allocation, distribution of scarce resources.
-It helps us to understand the changing economy and the role of competition and free markets
across the globe.
14

3. Philosophy:
-It describes the nature of things, specially values and ethics
4. Sociology:
-Sociology deals with the study of people in relation to their fellow human beings
5. Political Science:
- Political science is the study of behavior of individuals and groups within a political environment.
- It also involves structuring of conflict, allocating power in an economic system , and manipulating
power for individual self-interest

6. Psychology :
-This is thee study of human behavior. It seeks to measure, explain, and sometimes change the
behavior of humans and other animals.

Nature of Management
Whether it is an
art or science?

Levels of Management

Top Level Managers
Risto Siilasmaa
Nokia
Indra K. Nooyi
PepsiCo, Inc

Role of Top Level Managers
Sets the goals, objectives, policies etc
Approving annual budgets
Setting the salaries
Responsible for shareholders for the performance of business

Middle Level Management : The Role
Top level managers set goals & plans and according to that middle level managers make
plan
Middle level managers executive plan
They give training to the lower level managers
Middle level managers interpret and explain policies from top level to lower level
Take a care about departmental activity
They take a feedback from low level managers and present towards the top level
managers which help in decision making process
They motivate and inspires the lower level managers

Lower Level Management : The Role
Guide and instruct workers for day to day activities
They are responsible for quality and quantity of production
Take a feedback from employees and present the employees problems,
suggestions in front of middle level managers
They motivates and inspire the workers
They provides practical skills and training to workers
Making a list and arrangement of machine, tools, raw materials

Functions of Management
Planning
Organizing
Staffing
Directing or Leading
Controlling

Planning
-Planning means what has to be done to achieve a particular goal. In other words
we can say that it is set of exact steps to be taken to accomplish organization’s
goal.
-A good plan always gives good results.
Example: If company decides to boost the sale. The necessary steps could be
inventory management, advertisement or increase in sales staff etc. Once the
proper plan gets ready manager has to execute it step by step.

• Goals
• Objectives
• Strategy
• Policy
• Procedure
• Rules
• Program
• Method
• Budget

Continue…
Planning is highly goal oriented
Planning is a continuous processes
Planning is pervasive
“ Planning is the preparation of tomorrow and it an activity which allows managers to determine
what they want and how they will achieve it ”

Organizing
• It is distributing or allocating
the activities of business among
different personnel
• The manager has to divide the
work in activities and assign
tasks to various groups of people

Purpose Of Organizing
Match The Employees To The Task
Communicate Properly
Transfer Authority
Prevents Corruption

Staffing
Staffing is another important
function which manager needs to
perform.
Determining the human resource
requirement from the plan, manager
has to speed up the process of
staffing by selecting, recruiting,
training and developing the
employees.
Manager has to work with the
human resource department to
execute this function

Directing
• Directing includes the work
guiding and supervising
subordinates.
• Each and every manager is
responsible for his / her
department and he/ she should
provide necessary guidelines
to his/ her subordinates.

Importance Of Directing
It Initiates Actions
It Integrates Efforts
Efficient Utilization Of Resources
Coping With The Changes

Controlling
• Controlling means to check the
functioning of all the works.
• It is following up what is being
done.
• Controlling consist of basic steps
viz. setting standards of
performance.
• Comparing actual with these
standards and taking corrective
steps whenever deviations are there.

Steps In Controlling Functions
1. Set Standards To Measure Performance
2. Measure Real Performance
e.g. Sales growth is target of organization. The organization should have a means
of gathering and reporting sales data
3. Contrast Performance With The Standards
4. Take Corrective Actions
e.g. In a productivity or quality department workers and managers often
empowered to evaluate their own work

Summary……….
………. Planning includes the predetermined course of action
………Organizing concerned with the allocation of task responsibilities within employees
….staffing include selection of proper personnel for proper job in an organization.
Staffing includes manpower planning, recruitment, training, promotion etc.
…… Directing guidelines to subordinates to provide them suggestion and instruction
wherever needed
…….. Controlling include setting standards and comparing the actual performance with
standards performance.

Communication
• Communication is the process of
passing information and
understanding from one person
• Communication is a the process
of meaning full interaction among
human beings
• it involves a systematic process
of telling, listening and
understanding

Decision Making
• Generally all managers take decision. They take decision
based upon some data and their analysis.
• Decision are the choice of management from of several
alternatives for that they use several technical methods.
• Example: sales manager takes decision for sale,
marketing manger for marketing.

Managerial Skills
Managers ,to effectively run an organization, must
possess certain skills that will enable them to perform
their tasks successfully
Poor managerial skills can defect the most successful
activities and in many cases can lead to the downfall of
the organization
Managerial Skills divided into 3 category:
-- Technical Skills
-- Human Skills
-- Conceptual Skills

Managerial Skills

Managerial Role
Managerial roles divided into 3 groups:
A) Interpersonal : 1. Figurehead
2. Leader
3. Liaison
B) Informational : 1. Monitor
2. Disseminator
3. Spokesperson
C) Decisional : 1. Entrepreneur
2. Disturbance
Handler
3. Resource
Allocator
4. Negotiator
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Interpersonal Role

Informational Role

Decision Role

Organization
A social unit of people that is structured and managed to meet a need or to
pursue collective goals
All organizations have a management structure that determines relationships
between the different activities and the members and subdivides and assigns
roles, responsibilities, and authority to carry out different tasks

Line Organization

Advantages of Line Organization
Structure of line organization is easy to understand is simple as well as easy to
execute
It is flexible and easy to expand and contract. Easily we can add or remove
member from this type of organization
Due to simple structure the division of authority becomes clear and simple
Even communication among superiors as well as subordinates is easy as there is
no confusion among members
This structure allows fast or speedy work as there is no conflicts
Due to perfect fixation of responsibilities the degree of discipline is very high
and thus very useful for an organization

Disadvantages of Line Organization
It is very simple and small so it does not cover the complicated relationship
between people
Line of organization is not able to focus on the work specialization. People may
have to do the job though they are not specialized in that area
Because of lack of specialization there is more wastage of materials and man
hours
In this type of organization working is monotonous that only superiors dictate
the work to the subordinates
In line organizations provisions are not frequently made to train, develop and
replace top executives as well as the subordinates
It may overload the subordinators

Applications of Line Organization
Textile Industry Paper IndustrySugar Industry

Functional Organization
Superintendent
ShopOffice
Route clerk
Instruction Clerk
Time & Cost Clerk
Disciplinarian Gang Boss
Speed Boss
Inspector
Repair Boss

Advantages of Functional Organization
In this type of organization considered the work specialization. Since a foreman
is responsible for one function, he can perform his duties in a better manner and
produces the better results
Due experts advice there is reduction in the number of accidents and wastage of
materials, men and machine hours.
Expert person like a foreman can give work related advice to the workers so the
workers so that they again perform better and thus their productivity is also better
Quality of work gets improved because of concentration in only one specialized
area of the concern person

Disadvantages of Functional
Organization
In this type of organization the exposure given to the worker is very less. There is
no opportunity to the worker to show their ingenuity, initiative or drive
Due to number of foremen, workers may get confuse about the activities and
authorities of these numbers of foremen
As there are various foremen working on the same level who handles different
activity, the coordination among these foremen becomes a difficult task

Line and Staff Organization

Advantages of Line- Staff
Organization
Required expert advice can be taken from the specialist staff executive
To concentrate on the production the line executives are made free from the load
by allocating work to the staff
Due to proper work division there is less wastage of material, men power
,machine
Due to specialization the quality of product is improved
The chance of confusion among the people are very less because duties are clear
to each and every person
Line-Staff organization have all the advantages of functional and line
organization

Disadvantages of Line –Staff
Organization
Due to increase in staff members and due their high salaries and other official
expenses the cost of the product gets increased
If functions are not properly cleared by line and staff, organization may get
confused
If line executives are fully dependant on the staff member or staff executive then
they may lose their initiative, drive and ingenuity
If jealousies are developed between line and staff executive it may cause harm to
the enterprise

Business Organization
Business organization refers to all those steps that need to be undertaken for
establishing relationship between men, material and machine to carry on business
efficiently with the intension of earning profits.
In short, it is what all is required to get a business rolling with the underlying
intension of making profits.

Characteristics of Business Organization
 Ownership: Refers to the
right of an individuals or a
group of individuals to acquire
legal title to assets or
properties for the purpose of
running the business
A business firms firm may be
owned by one individual or a
group of individuals jointly

Lawful Business
• The business activity that is
undertaken by the business
enterprise must be lawful.
• This implies that illegal
activities should not be
undertaken and the enterprise
should comply with the law of
the land

Separate Entity and Management
• Every enterprise is an
independent entity and has its
own assets and liabilities and a
separate way of functioning
•Separate entity is that the
profit or losses of one entity
cannot be passed to another
entity

Continuity
• The business
operations undertaken
by the entity should be
on a continuous basis
and cannot have one
single operation or
transaction

Risk
• Business is directly
associated with risk and
uncertainty
• The greater the risk the
greater has to be the profit

Scope of Management
1. Subject-matter of management
2. Functional area of management
- Financial
- Personal
- Purchasing
- Production
- Maintenance
- Transport
- Distribution
- Office
- Development
60BUSINESS MANAGEMENT PROF. P. M. DAHALE

3. Management is an inter-disciplinary approach
4.The principles of management are of universal application
5. Modern management is an agent of change

Frederick Winslow Taylor
American mechanical engineer
Sought to improve industrial efficiency.
Father of scientific management
(Taylorism)
First management consultants

Scientific Management
Frederic Winslow Taylor National efficiency was a more significant issue than conserving
natural resources.
Principle of Scientific Management Efficiency
Significant waste in human effort Soldering: Workers at a deliberately slow pace
1. Social incentives avoiding abuse from co-workers for raising bar on performance.
2. Economic incentives paid same day wage regardless of how much is produced
Primary objective of management maximum prosperity
1. development of business to highest stat of excellence
2. development of each worker to state of maximum Efficiency

Scientific Management….
Greater assumption of responsibilities by Management: Observe workers to identify
preferred method of performing tasks.
Principles of scientific management
1. Establish clear rules on how work was to be performed:-
2. Select, train, and develop workers
3. co-operate with workers and insure work is consistent with rules identified.
4. Equal division of work and responsibility between management and workers.

Fundamental principles
Replacing rule of thumb with science.
Working for maximum output, rather than restricted output.
Developing all workers as maximum as possible for their own and their
company’s highest prosperity.
Obtaining harmony in group action, rather than discord.
Achieving cooperation of human being, rather than chaotic individualism.

Limitations of Scientific Management
Focuses problems from engineering point of view.
Fails at operational level and not at management level.
Economic and physical needs are emphasized.
Social needs are overlooked.
Totally ignored the human desire for job satisfaction, working conditions, job
contents.

Henry Fayol’s Administrative Theory (1841-1925)
Henri Fayol (Istanbul, 29 July 1841–Paris, 19
November 1925) was a French mining engineer and
director of mines who developed a general theory of
business
Business Operations of an Organization:
Technical
Commercial
Financial
Security
Accounting
Managerial

Fayol’s fourteen principles of management
Division of work based on
specialization.
Authority and responsibility.
Discipline.
Unity of command.
Unity of direction.
Subordination of individual
interest to general interest.
Remuneration.
Centralization.
Scalar chain.
Order.
Equity.
Stability of tenure.
Initiative.
Union is strength.

Elton Mayo
George Elton Mayo (26 December 1880 - 7 September
1949) was an Australian psychologist, sociologist and
organization theorist.
Founder of the Human Relations Movement
The Human Problems of an Industry.
People's work performance is dependent on both social
issues and job content.
A tension between workers' 'logic of sentiment' and
managers' 'logic of cost and efficiency' which could lead
to conflict within organizations.

Individual workers cannot be treated in isolation, but must be seen as
members of a group.
Monetary incentives and good working conditions are less important to the
individual than the need to belong to a group.
Informal or unofficial groups formed at work have a strong influence on
the behaviour of those workers in a group.
Managers must be aware of these 'social needs' and cater for them to
ensure that employees collaborate with the official organization rather than
work against it.

Mayo's simple instructions to industrial interviewers:-
1. Give your full attention to the person interviewed, and make it evident that you are doing
so.
2. Listen - don't talk.
3. Never argue; never give advice.
4. Listen to: what he wants to say; what he does not want to say; what he can not say without
help.
5. As you listen, plot out tentatively and for subsequent correction the pattern that is being set
before you. To test, summarize what has been said and present for comment. Always do this
with caution - that is, clarify but don't add or twist.

Formsof ownerships
Introduction:
Every business activity is initiated by a person called an
‘Entrepreneur’ or a ‘Promotor’.
Business activities are undertaken by Government and private
individuals, sometime they jointly promote or undertake some
business activity.
Primary consideration for undertaking any business activity by private
individual is to earn
“Profit”.

Formsof ownerships….
Forms of
Organization
Private Ownership
Individual
ownership/sole
proprietary firm
Collective
Ownership
State or
Government
ownership
1. Department under control of ministry
2. Corporation created
3. Government Company

1. Sole proprietorship
These are business units owned by one individual or person.
It also includes self-Employed individuals.

Sole proprietorship……
Advantages:
Formation is easy, least expensive and least time consuming.
Ideal for small volume of business.
No sharing of profits with others.
Personal supervision of the proprietor helps reducing wastages and undesirable
expenditure.
Quick decision making to suit the changing environment.
Flexibility and freedom in operations.
Secrecy in respect of important matters can be maintained.

Sole proprietorship……
Dis-Advantage:
Limited sources of capital restrict investment and hence no economies of large
scale operations.
Absence of statutory requirements regarding maintenance of records and account
may lead to indiscipline in business.
Limitation for having good counsel or advice from professionals.
Unlimited liability may ruin the proprietors personal property and assets.

Partnership firms
Partnership means, an arrangement between two or more persons to carry on
some business on joint ownership basis.
In India, partnership firms are governed by the Indian partnership Act 1932.
Partnership firm springs from an agreement. The Agreement may be express (oral
or written ) or implied.
Registration of firm is not compulsory but in view of the dis-advantage or limitation
in respect of unregistered firms.
Registration when so desired is not possible unless contract is written.
The document or Contract between the partners is known as ‘partnership deed’.

Contents of partnership deed :
The nature and the principal place of business.
The name of the firm.
The names and addresses of the partners.
Capital of each partner.
Profit sharing ratio.
Rights and duties of each individual partner.
Name of the managing partner or partners.
Mode or method of calculating goodwill on dissolution.
Duration of the agreement.
Procedure for appointment of an arbitrator in the event of any disputes
among the partner's.
Maintenance of books of accounts and financial year.

Partnership firms…..
Advantages:
1. Pooling of physical resources (including capital) and expertise or
competence of two or more persons is possible.
2. Formation is easy, less expensive and less time consuming.
3. Business may not suffer in the absence of one or few partners.
4. Personal contacts of each partner help quick development of business
and establishment of goodwill/reputation.
5. Division of work among partners can improve quality of supervision or
management.
6. Economies of large scale.

Partnership firms…..
Dis-Advantages:
1.Divergent views of different partners delay decisions.
2.In the absence of clear division of work, two or more working partners give
different instruction to the employees and follow different systems. This leads to
chaos and confusion in organization.
3.Death or retirement of one partner results in dissolution of firm.
4.Firm has no separate legal entity. It can not invest in its own name, can not be sued
in its own name.
5.When the business grows and profitability improves, partners often fight for
acquiring substantial control and the whole business gets ruined.

joint stock company
Its very popular form of business organization
JSC in india are governed by the companies Act, 1956.
There are different kinds of companies such as companies limited
by share capital, companies limited by guarantee without share
capital, companies not for profit etc.
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Companies
limited by shares
Private Limited
Companies
Public Limited
Companies

joint stock company…
Formation of joint stock company:-
The procedure for formation of a company is expensive and time consuming.
Steps:
1.Obtaining approval for the proposed name of the company.
2.Drafting memorandum of association and articles of Association the company.
3.Stamping and signing of memorandum of Association and Articles Association by the promoters in
the prescribed manner.
4.Consents of the individuals named as directors, particulars of their directorships in other companies,
address of the registered office are required to be furnished.
5.Payment of registration fees.
6.Declaration that all legal requirements of the companies Act 1956 in formation of the company are
complied with all the above document with fees must be submitted to the registrar of the companies
of the state in which the registered office will be situated.

Advantages:
1. It is possible to raise large amount of capital from number of small investors.
2. Volume of business justifies appointment of qualified and experienced personnel.
This helps reducing cost of supervision.
3. Because of broad capital base, borrowing capacity is increased.
4. Experts can be invited as directors of the company without any financial
commitment on their part.
5. Because of perpetual entity or existence large organizations prefer dealings with
bodies incorporate like companies.
6. In case of losses in business, directors and shareholders are not held personally liable
unless such losses have resulted from willful negligence or fraud committed by them.
Their personal assets are secured.

Dis-Advantages:
1.Formation is expensive and time consuming.
2.Proper record keeping etc. increases cost of administration.
3.Large number of shareholders spread over large geographical area increases
administrative costs.
4.Directors who may not have substantial stake in the company virtually enjoy
absolute control over the affairs of the company.
5.As directors may not have stake in the company, they may not take proper care
while investing the funds of the company in any business.

Co-Operative
Development of co-operative societies is phenomenal in Maharashtra.
Most of sugar factories in Maharashtra are co-operative societies formed
by collective efforts of sugarcane growers/cultivators and social leaders.
Co-operative societies do not primarily aim at profit.
The main objective or primary consideration in forming co-operative s is
prosperity and progress through co-operation.

Co-Operative….
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Types of
Co-Operative Societies
Co-operative
societies of
producers
Co-operative
societies of
Consumers
Co-operative
societies for
lending purpose.

Co-Operative….
Advantages:
1.They help weaker sections of the society in fulfilling their primary needs.
2.Substantial assistance in the form of loans is available from the government.
3.There is fair and equitable distribution of wealth.
4.Economies of scale are possible.
5.Being voluntary organizations, members render voluntary services. There is
saving of administrative and management costs.

Co-Operative….
Dis-Advantages:
1.Co-operative are more commonly found in rural areas where people are
less educated. The societies are used for personal gain at the cost of poor
people.
2.Democratic style of functioning is not suitable in all type of situations.
3.It is generally found that persons in-charge of affairs do not possess the
requisite administrative/managerial competence.
4.Because of limited financial resources appointment of qualified and
experienced personnel may not be possible.

State or government ownership
organizations
In India, government has assumed the role of welfare state.
Government is therefore looking after manufacture, distribution and
supplies of various goods and services like post and telegram, insurance,
banking, broadcasting, energy, transport, communication, etc.
Primarily aim at development of physical infrastructure for overall
economic development.
These Govt. activities are undertaken through the medium of three
forms of organisations.

State or government
ownership organizations…
1. Department form:
These are controlled by the concerned ministry and have no separate entity
different from the government.
Departmental chief is appointed by the minister concerned and works directly
under the superior vision of the minister concerned.
Employs working in these departments are public government servants.
Department do not have own capital but they get their finance from annual
budgets of the Govt.
Examples: Post, telegram department & Indian railways.

State or government
ownership organizations…..
2. Autonomous Corporations:
These are constituted by separate act or legislation of parliament.
They enjoy separate entity and have their own boards of directors. Directors are
appointed by Govt.
Employees of the corporation are not public servants.
These corporations are financed by grant-in-aid of Govt.
They also get revenue by selling their products(i.e goods & Services)
Examples: Industrial Finance corporation of India, Industries Development Bank
of India, Indian Airlines corporation, LIC of India etc.

State or government
ownership organizations….
3. Government Company:
A Govt. company means any company in which not less than 51% of the paid up
share capital is held by the Central Govt. and / or by any State Govt.
These companies are governed by the companies Act, 1956.
These constitute a special class of companies and certain provisions of the
companies Act do not apply to government companies.
Employees of these companies are not public servants or agents of the
government.
These companies are managed by boards of directors.
Capital of such companies is subscribed entirely by government or partly by govt.
and partially by private individuals.
Examples: Indian oil corporation ltd., Bharat petroleum corporation ltd., Bharat
heavy Electrical ltd. Hindustan Machine Tools ltd.

State or government
Advantages:
1.Govt. can retain control over the manufacture and supply of essential goods or critical
items.
2.As such enterprises are not guided by profit motive, essential goods, become available to
economically weaker sections of the society at substantially low prices.
3.Because of monopoly position marketing costs are minimum.
4.There are no financial constraints.
5.Economies of scale because of very large volume of business.

State or government
Dis-Advantages:
1.Those who manage these enterprises draw their remuneration regardless of quality of
performance.
2.In reality management of state enterprises becomes politically motivated.
3.Changes in government or ministry are generally followed by changes in senior managers
of such organizations.
4.As compared to the remuneration paid by private organizations, remuneration paid to the
employees in such organization being less getting competent people becomes difficult.
5.Because of political pressures some individuals do not like to join these organizations.

Globalization

Concept of Globalization
Definition of Globalisation
Globalization is a social change, an increase in connections among
societies and their elements. The term is applied to many social,
commercial and economic activities.
Development of a global financial system .
History of Globalization
Europeans discover the Americas
Industrial Revolution
Inventions
◦ Transportation
◦ Telephone
◦ Telegraph

What is Globalization:
Globalization is the flow across national boundaries of goods and
services, capital, people, technology, ideas, and culture. Flow of
People, Goods, Ideas Flow of Insects, Disease Vectors, Viruses,
Economic, Political, Cultural, Social & Health Impacts

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Globalization
Culture Economy Technology

“Globalization in its current phase has been
described as an extraordinary compression of time
and space reflected in the tremendous intensification
of social, political, economic, and cultural
interconnections and interdependencies on a global
scale.”

100
What is Globalization Process?
• Domestic company export to foreign countries directly on its own
• Domestic company export to foreign countries through the dealers
• Domestic company becomes an international company by establishing
production and marketing operations in foreign countries
• Company becomes a true foreign company by serving the needs of
foreign customers

Advantages of globalization
• Technological advances
• Expansion of international commerce (exports and imports)
• Rising importance of private capital flows (stock markets and
multinational corporations)
• Increasing travel and migration (international tourism and
domestic diversity)
• Increased communication and interaction between peoples
(through all sorts of media)

Business management 2017 18 unit no 1

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Business management 2017 18 unit no 1