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successful Whereas WIDIA, NGEF, SKF, Kirloskar are not. There are many factors w
hich}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {contribute e
ither to the success or failure of a company. Some of the very important factor
s that}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {contribute
to survival and success of a company are; timely and accurate decision-making,
taking}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {stock of t
he business environment, forecasting and monitoring the environment, people}\par
\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {management, redefinin
g the corporate goals in accordance with dynamic situations, business}\par\pard\
li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {mapping, product addition deletion, optimum output, government policies, these and many}\par\pard\li920\r
i0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {more are worthy of careful and cau
tious observation for a businessman to script his success}\par\pard\li920\ri0\sl
-266\slmult0 \fs20\cf1\f0\charscalex100 {story.}\par\pard\li1520\ri0\sl-266\slmu
lt0 \fs18\cf1\f0\charscalex100 {India has no dearth of such people, who have scr
ipted their success stories. With}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f
0\charscalex100 {perseverance and right decisions at right time people }\fs18\cf
1\f0\charscalex100 {like J.R.D. Tata, Lalbhai, Chidambaram,}\par\pard\li920\ri0\
sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Birla, Rahul Bajaj, Aditi Godrej, Dee
pak parekh, Krishna Murthy, late Dhirubai Ambani, Anil}\par\pard\li920\ri0\sl-26
6\slmult0 \fs18\cf1\f0\charscalex100 {and Mukesh Ambani, Narayana Murthy, Azim P
remji, Anji Reddy, Shivanader, have steered}\par\pard\li920\ri0\sl-266\slmult0 \
fs20\cf1\f0\charscalex100 {their way to the peak of cliff.}\par\pard\li1520\ri0\
sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Business may be understood as the org
anised efforts of enterprises to supply the consumers}\par\pard\li920\ri0\sl-266
\slmult0 \fs18\cf1\f0\charscalex100 {with goods and services for fulfilling the
needs and wants. They may earn profit or incur loss}\par\pard\li920\ri0\sl-266\
slmult0 \fs18\cf1\f0\charscalex100 {and they have to do this within the framewor
k of law. All businesses share the same purpose}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {that is to earn profits. The purpose of business
goes beyond earning profit. It is an important}\par\pard\li920\ri0\sl-266\slmult
0 \fs18\cf1\f0\charscalex100 {institution in society be it for the supply of goo
ds and services, creation of job opportunities,}\par\pard\li920\ri0\sl-266\slmul
t0 \fs18\cf1\f0\charscalex100 {offer of better quality of life; or contributing
to the economic growth of the country and putting}\par\pard\li920\ri0\sl-266\slm
ult0 \fs20\cf1\f0\charscalex100 {it on the global map, the role of business is c
rucial. Society needs business and vice-versa.}\par\pard\li920\ri0\sl-306\slmult
0 \fs24\cf1\f0\charscalex100 {MEANING OF BUSINESS}\par\pard\li1520\ri0\sl-266\sl
mult0 \fs18\cf1\f0\charscalex100 {Business refers to all the activities concerne
d with production, manufacturing, lending,}\par\pard\li920\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {selling, leasing and the like, for earning profit. In
the process of executing business activities}\par\pard\li920\ri0\sl-266\slmult0
\fs18\cf1\f0\charscalex100 {the businessmen/executives in the organisation have
to take various business decisions. In the}\par\pard\li920\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {process of taking various business decisions the busin
essmen should study the behaviour of}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf
1\f0\charscalex100 {economic laws or principles or theory. These economic laws o
r the principles of economics}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\ch
arscalex100 {influence the business of the organisation in the process of earnin
g/maximizing profits.}\par\pard\li920\ri0\sl-440\slmult0 \fs24\cf1\f0\charscalex
100 {ECONOMICS}\par\pard\li1520\ri0\sl-440\slmult0 \fs18\cf1\f0\charscalex100 {I
f the resources are abundant and the needs and wants are minimal, there is no ne
ed to}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {study the e
conomics. The subject economics came into being because there are limitless need
s}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {and wants and s
carce resources it calls for choice to manage the wants and needs with the}\par\
pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {scarce resources. The
problem of allocation of scarce resources gave birth to a subject called}\par\pa
rd\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {economics. It is a scien
ce of choice and it is a 150-year-old discipline. Noted economists described}\pa
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For example the business organisation has to think in advance, what would be the
sales in the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {nex
t month? What is the extent of stock of the goods that should be possesed? Does
the}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {manufacture o
f the product is further required? What would be the sales promotion strategy in
}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {the near future
to increase sales etc is thought in advance for the successful business.}\par\pa
rd\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-360\slmult0 \fs24\cf
1\f0\charscalex100 {DEFINITIONS}\par\pard\li1520\ri0\sl-453\slmult0 \fs18\cf1\f0
\charscalex100 {There are various definitions on business economics, among them
the following are worth}\par\pard\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {to understand.}\par\pard\li1520\ri0\sl-306\slmult0 \fs18\cf1\f0\charscale
x100 {According to}{ }\fs18\cf1\f0\charscalex100 {McNair and Meriam}\fs18\cf1\f0
\charscalex100 { Managerial economics consists of the use of economic}\par\pard\
li906\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {modes of thought to analyse
business situations.}{\super \fs14\up3\cf1\f0\charscalex100 {4}}\par\pard\li152
0\ri0\sl-293\slmult0 \fs18\cf1\f0\charscalex100 {Spencer and siegelman}\fs18\cf1
\f0\charscalex100 { have defined business economics as the integration of econom
ic}\par\pard\li920\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {theory with bu
siness practice for the purpose of facilitating decision-making and forward plan
ning}\par\pard\li920\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {by managemen
t.}{\super \fs14\up3\cf1\f0\charscalex100 {5}}\par\pard\li1520\ri0\sl-280\slmult
0 \*\tx2746\fs18\cf1\f0\charscalex100 {According to}\tab \fs18\cf1\f0\charscalex
100 {Prof. Joel Dean}\fs18\cf1\f0\charscalex100 {- the purpose of managerial eco
nomics is to show how}\par\pard\li920\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex
100 {economics analysis can be used in formulating business policies.}{\super \f
s14\up3\cf1\f0\charscalex100 {6}}\par\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f
0\charscalex100 {Prof. Norman F. Dufty}\fs18\cf1\f0\charscalex100 { has defined
Business Economics as a body of theory which can}\par\pard\li920\ri0\sl-266\slmu
lt0 \fs20\cf1\f0\charscalex100 {be of considerable assistance to the businessman
in his decision making.}\par\pard\li1520\ri0\sl-293\slmult0 \fs18\cf1\f0\charsc
alex100 {Brigham and Pappas}\fs18\cf1\f0\charscalex100 { believe that managerial
economics is the application of economic}\par\pard\li920\ri0\sl-266\slmult0 \fs
20\cf1\f0\charscalex100 {theory and methodology to business administration pract
ice.}\par\pard\li1520\ri0\sl-293\slmult0 \fs20\cf1\f0\charscalex100 {From the ab
ove definitions we can draw the following conclusions}\par\pard\li1586\ri0\sl-29
3\slmult0 \fs20\cf1\f0\charscalex100 {1. Business economics is a branch of econo
mics.}\par\pard\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {2. The ter
m business economics can be used in place of managerial economics/Industrial}\pa
r\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {economies.}\par\par
d\li1586\ri0\sl-280\slmult0 \fs20\cf1\f0\charscalex100 {3. The principles or the
ory of economics is applied to solve the problems of business}\par\pard\li1813\r
i0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {organisation through decision maki
ng and forward planning.}\par\pard\li920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\l
i920\ri0\sl-213\slmult0 \fs18\cf0\par\pard\li920\ri0\sl-280\slmult0 \fs10\cf1\f0
\charscalex100 {4}\fs16\cf1\f0\charscalex100 { Malcolm P. McNair and Richard S.
Meriam, Problems in Business Economics McGraw-Hill Book Co.,}\par\pard\li920\ri0
\sl-240\slmult0 \fs18\cf1\f0\charscalex100 {Inc., New York and London, 1941. P.v
) preface)}\par\pard\li920\ri0\sl-266\slmult0 \fs10\cf1\f0\charscalex100 {5}\fs1
6\cf1\f0\charscalex100 { Milton H. Spencer and Louis Siegelman, Managerial Econo
mics, Richard D. Irwin, Inc., Homewood,}\par\pard\li920\ri0\sl-240\slmult0 \fs18
\cf1\f0\charscalex100 {Illinois, 1959, p.1.}\par\pard\li920\ri0\sl-253\slmult0 \
fs12\cf1\f0\charscalex100 {6}\fs18\cf1\f0\charscalex100 { Dean, Joel, Managerial
Economics, PrenticeHall of India, New Delhi, eg. 1977.}\par\pard\sect\sectd\sbk
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0\charscalex100 {organisation. Now a days the success of the company depends upo
n how the business}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex10
0 {executives present the information of the company to the customers at various
}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {exhibitions, se
minars, workshops, discussion tables etc.}\par\pard\li1586\ri0\sl-266\slmult0 \f
s18\cf1\f0\charscalex100 {7. To participate in public debates, work shops, semin
ars etc. to update the}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscal
ex100 {knowledge.}\fs20\cf1\f0\charscalex100 { The business economist must parti
cipate in public debates, workshops}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf
1\f0\charscalex100 {and seminars and interact with the competent persons and upd
ate his knowledge.}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex10
0 {This in turn helps the management to take right decisions with the updated kn
owledge.}\par\pard\li1586\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {8. To e
nhance his own status in the organisation.}\fs18\cf1\f0\charscalex100 { The busi
ness economist must}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex1
00 {identify himself in the organisation through his knowledge, involvement in t
he}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {successful ru
nning of the company.}\par\pard\sect\sectd\sbknone\pgwsxn11893\pghsxn16840\margl
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rscalex100 {What is the total capital / funds required for the project?}\par\par
d\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What is the extent of lo
ng term capital / funds, its sources and composition?}\par\pard\li1520\ri0\sl-32
0\slmult0 \fs20\cf1\f0\charscalex100 {What is the extent of short-term capital /
funds, its sources and composition?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\c
f1\f0\charscalex100 {How to raise the funds / capital?}\par\pard\li1520\ri0\sl-3
20\slmult0 \fs20\cf1\f0\charscalex100 {What is break even point?}\par\pard\li152
0\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {What are the risks involved in
raising funds? Whether they are high risk or low risk?}\par\pard\li1520\ri0\sl-3
20\slmult0 \fs20\cf1\f0\charscalex100 {Make or buy decisions?}\par\pard\li1520\r
i0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {Rate of return - capital employed?
}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {(}\fs20\cf1\f0\
charscalex100 {d}\fs20\cf1\f0\charscalex100 {)}\fs20\cf1\f0\charscalex100 { Gene
ral Decisions}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0\charscalex100 {Wh
ere to incorporate the company?}\par\pard\li1520\ri0\sl-320\slmult0 \fs20\cf1\f0
\charscalex100 {What are the incentives / encouragements offered by various stat
e governments?}\par\pard\li1520\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {W
hat is the policy of the state government towards encouraging the projects?}\par
\pard\li1520\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {What are the resourc
es or factors of production available in the state in which you decided}\par\par
d\li920\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {to start your project?}\p
ar\pard\li1520\ri0\sl-266\slmult0 \fs18\cf1\f0\charscalex100 {Think about the st
ability of state government and central government and their policies.}\par\pard
\li1586\ri0\sl-306\slmult0 \fs20\cf1\f0\charscalex100 {3. With Rs. 500 you will
go to a books shop to purchase the goods required for your}\par\pard\li1813\ri0\
sl-266\slmult0 \fs20\cf1\f0\charscalex100 {semester. You will find books written
by various authors in each subject. But you will}\par\pard\li1813\ri0\sl-266\sl
mult0 \fs20\cf1\f0\charscalex100 {select one book on each subject of the semeste
r. This process of selection is called}\par\pard\li1813\ri0\sl-266\slmult0 \fs20
\cf1\f0\charscalex100 {what?}\par\pard\li1586\ri0\sl-266\slmult0 \fs20\cf1\f0\ch
arscalex100 {4. Assume you are an entrepreneur and give one example of your forw
ard planning in}\par\pard\li1813\ri0\sl-266\slmult0 \fs20\cf1\f0\charscalex100 {
the process of Competition and diversification of products.}\par}