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CHARUTAR VIDYA MANDALS

SEMCOM
Vallabh Vidyanagar
Faculy Na!"# Dr$ Shu%a&ri Da& 'uly () *+(,
Cla&&# TY--A
Sub."c# -u&in"&& En%ir/n!"n
Cha0"r * # N/n1Ec/n/!ic En%ir/n!"n
2/%"rn!"n And -u&in"&& In"raci/n And In"rr"lai/n
I. -u&in"&& / 2/%"rn!"n
Inr/duci/n
Business firms have a number of responsibilities to the government. Business firms must
obey the laws and regulation of central, state and local governments. Business should look
to the government for support, encouragement and guidance. Business must also play a vital
role in helping the government to develop its function capabilities.
The few responsibilities of business to the government is as under:
1) Ta !ayment " Taes paid by the business enterprises constitute a ma#or source of
revenue to the government. $irms themselves pay taes on any input, sales and
income and also deduct from the salaries and wages of employees.
%) &oluntary !rogrammes " Business firms cooperate with government agencies on
voluntary basis in connection with various programmes such as providing help to
needy at the time of flood, droughts etc. and also help for the social work and better
environment.
') !roviding Information " (ometimes political leaders either because of ineperience
make certain decisions which is not sometimes favourable for the business, so
during decision making business leaders help the government by providing re)uired
information that suits the business.
*) +overnment ,ontracts " -any private businesses by the government contracts carry
out pro#ects such as housing pro#ects, oil pipelines etc.
.) +overnment (ervices " Business offers services of its leaders to the government.
Business leaders serve on various advisory boards constituted by the government.
II. 2/%"rn!"n / -u&in"&&
Introduction
The responsibility of government to business is much greater than the responsibilities of
business to government. +overnment has the power, will and resources to decide, shape,
guide and control business activities.
The government responsibilities towards business are as under:
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1) /stablishing and /nforcement of 0aw " +overnment establishes and enforces laws
and regulations under which the business functions. The government is responsible
for providing the 12ule of the +ame3 by which the business system function
smoothly and which helps in maintaining competition. It is the responsibility of the
government to enforce the laws and to provide a system of courts for ad#udicating
differences between the business, individuals or government agencies.
%) -aintenance of 4rder " +overnment has the responsibility of maintaining order and
protecting the people and their property. It is impossible to carry on any business in
the absence of a peaceful environment.
') -oney and ,redit " The government provides a system of money and credit by
means of which transaction is affected. It is also the responsibility of the government
to regulate money and credit and protect the integrity of the rupee.
*) 4rderly +rowth " 4rderly growth implies balanced regional development,
distributive #ustice, full employment and protecting the economy against booms and
busts.
.) Infrastructure " Business needs for its effective functioning such infrastructural
facilities as transportation, power, finance, trained personnel and civic amenities. It
is the responsibility of the government to provide these facilities.
5) Information " +overnment agencies publish and provide a large amount of
information which is used etensively by business firm. The information regarding
banking, agriculture, commerce and industry, health, labour, atomic energy etc.
which is helpful to the citi6ens and business also.
7) 8ssistance to small industries " (mall si6e business establishments has a special role
in the economy. Being small in si6e there are problems regarding finance,
marketing, knowhow and infrastructural facilities. (o it is again the responsibility of
the government to provide the re)uired facilities to provide the re)uired facilities to
small scale industries to grow.
9) Inspections and 0icenses " +overnment agencies conduct inspection activities. $ood
and drugs for eample, assuring )uality products to consumers, government issues
licences to competent businesses to carry on business activities.
3HAT IS CULTURE4
In his true sense, culture is understood as that comple activity which includes by an
individual as a member of a society. 8nother imp aspect of culture is that it has two distinct
characteristics
:1) (hared values
:%) !assage of time
,ulture of a society is shared by its members. (econdly culture ethos passes from one
generation to another generation. Therefore culture is not confined to particular time.
Socio Cultural Environment and Business: ;ithin national and business cultures,
there develop organisation specific and occupation<specific cultures.
%
4rganisational culture :or its sister<term corporate culture) refers to the philosophies,
ideologies, values, assumptions, beliefs, epectations, attitudes, and norms that knit an
organisation together and are shared by its employees. 4rganisational members tend to
internali6e cultural nuances and like to internali6e newcomers into such mores. (ome of the
practices are so thoroughly internali6ed that no one )uestions them<they are taken for
granted, that is, they get institutionali6ed.
Besides institutionali6ation, deification or glorification tends to occur in organisational
cultures. =eroes emerge, especially among the founding fathers of the firm, whose
sacrifices, valorous deeds and ingenuity in the difficult initial years of the organisation or
during later crises periods are embellished into stories and sagas. The firm itself may come
to be regarded as a source of pride, and in some sense uni)ue. /mployees begin to feel a
strong bond with it that transcends material returns given by the company, and they begin to
identify with it. The organisation turns into a sort of clan and the organisational members
become ethnocentric. ,lannish organisations often pose problems to managers. -ost Indian
companies had developed the clan culture. The clan culture led to the collapse of several
#oint ventures between Indian companies and overseas firms. -ention may be made of the
breaking up the marriage between Tatas and >aimler Ben6, of +odre# with !?+ and +/, of
>,- with Toyota, of 0-0<!iaggio and of -ahindra with $ord.
IMPACT OF CULTURE ON BUSINESS
! Culture Creates Peo"le: The concept of culture is of great significance to business
because it is the culture which generally determines the ethos of the people. It trains people
along particular lines, tending to put a personality stamp upon them. Thus, we have Indians,
@apanese, 8mericans, +ermans, British and so on. It is not that all people are alike in a
particular culture. There are sub<cultures within a culture. !eople have their own
idiosyncrasies and are a blend of heredity, cultural eperience, sub<cultural eperience,
family eperience, and uni)ue personal eperience. ;hen people with different cultural
backgrounds promote, own and manage organisations, organisations themselves tend to
ac)uire distinct cultures.
4rganisational culture has functional and dysfunctional conse)uences. ,ulture performs at
least four functions.
Firstl#$ culture creates distinctions between one organisation and another.
Secondl#$ it conveys a sense of identity for orgnisational members.
T%irdl#$ it facilitates the generation of commitment to something nobler than oneAs own self
interest.
Finall#$ it enhances the social system stability. ,ulture is the social glue that helps hold the
organisation together by providing appropriate standards for the behaviour of organisational
members.
&! Culture and 'lo(alisation: 8s business units go international, the need for
understanding and appreciating cultural differences across various countries is essential.
;ork motivation, profit motivation, business goals, negotiating styles, attitudes towards the
development of business relationships, gift<giving customs, greetings, significance of body
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gestures, meaning of colours and numbers, and the like vary from country to country. ;hen
people from different cultures converge in a workplace, management will be re)uired to
manage diversity. ;orkforce diversity has important implications for management practice.
-anagers will be re)uired to shift their philosophy from treating everyone alike to
recogni6ing differences and responding to those differences in ways that will ensure
employee retention and greater productivity while, at the same time, not discriminating.
>iversity, if positively managed, can increase creativity and innovation in organisations as
well as improve decision making by providing different perspectives on problems. ;here
not managed properly, diversity is likely to result n increased turnover, reduced
communication and heightened inter<personal conflict. 8ny move from one country to
another will create a certain amount of confusion, disorientation and emotional upheaval.
This is called culture shock. 8n eecutive transferred from India to +ermany, for eample,
would re)uire lot of ad#ustment to make. 0anguage differs, climate varies, food habits are
different andB the sociali6ation pattern will be totally new. ,ulture shock will be severeA
when the new environment is totally different from the old one. 4rganisations, particularly
-C,s, must be prepared to cope with the culture shock.
)! Culture *etermines 'oods and Services: ,ulture broadly determines the type of goods
and services a business should produce. The type of food people eat, the clothes they wear,
the beverages they drink and the building materials they use to construct dwelling houses
vary from culture to culture and from time to time within the same culture. Business should
reali6e these cultural differences and bring out products accordingly.
+! Lan,ua,e and Culture: 0anguage is the foundation of any culture. It is an abstract
system of word meanings and symbols for all aspects of culture. 0anguage includes speech,
written characters, numerals, symbols, and gestures of non<verbal communication.
The interrelationship between language and culture is very strong and often the farmer
determines the latter. ;ords provide the concepts for understanding the world. 8ll
languages :there are approimately three thousand of them) have limited sets of words.
These restricted word sets in turn constrain the ability of the users to understand or
conceptuali6e the world. (ince language structures the way we think about what we see and
behave, it determine cultural patterns.
The above hypothesis that language determines cultural patterns is not acceptable to several
eperts. -any social scientists argue that language does not determine human thought and
behaviour patterns. $or eample, humans possess the physical, ability to make millions of
colour distinctions, yet languages differ in the number of hours that are recogni6ed. The
/nglish language distinguishes between yellow and orange, but some other languages do
not. The word 1Pun#a- is popular in Indian Alanguages but there is no e)uivalent of that in
the /nglish language. 4bviously, it is not that languages determine culture. It is the culture
Dthat comes first and re)uires the development of certain concepts and Ethus certain words.
Cotwithstanding the arguments, there is close interrelationship between language and
culture.
*
.! Attitudes: 8ttitudes are positive or negative evaluations, feelings and tendencies which
make an individual behave in a particular way towards people or ob#ects. 8ttitudes include
many things including opinion about individual freedom, democracy, truth and honesty, role
of sees, #ustice, love, marriage, and se. 4f particu1ar interest to us in this contet are
oneAs attitude towards work, attitude towards business, and attitude towards time and the
future.
Attitude to/ards /or0 is im"ortant as it has significant impact on motivation, morale, #ob
satisfaction, productivity and other aspects of human resource management. !ositive
attitude towards oneAs work, also called work ethic, makes a worker a more productive and a
more satisfied employee. ,ompensation and reward system are critical elements in
determining work attitudes. 8 business firm needs to devise a system of compensation and
reward that would help promote work ethic.
1a"anese /or0er is supposed to have a strong work ethic. 4n the other hand, Indian ethos
such as detachment from work, nirvana, and renunciation are said to be inconsistent with
the positive work attitudes of workers. This observation is not true, for, it is only in India
that an average worker takes work as worship. $or him or her work is everything. Co
worker touches his or her tools, wheel, mouse or button in the morning without closing his
or her eyes for a few seconds, worshiping the almighty epressing gratitude for having
bestowed his blessing in the form of work. The Indian worker has earned appreciation from
everywhere for his or her sincerity, hard work, loyalty and honesty.
The culture of the land determines its peopleAs attitude tow business. Business systems are a
product of beliefs, mores, and custom of the society in which they eist. In fact, their very
eistence depends upon social philosophies which conduct and support various kinds of
business functions. Business people must have some basic set of philosophies to guide, their
actions. Beliefs and value systems concerning what is right and what is wrong are basic to
all business activities and serve as a #ustification for doing or not do something in a
particular value system
!eopleAs attitudes towards time depend on culture. -ost western and capitalist societies
believe that time is money. To waste time is to waste money. $or most westerns punctuality
is a must. Being late for a meeting or appointment is not only considered rude but also
offensive. /very business activity is timed in terms of hours, minutes, days, months, and
years. 0ong<term strategic plans are prepared to ensure targets are met in time. Time seems
to control every aspect of human /ndeavour. !ay and productivity are measured in terms of
the time it takes to complete a given task. But in some other societies time is viewed as
something not to be taken seriously. !unctuality is observed rarely.
2! Collectivism and Individualism: The spirit of collectivism and individualism is related to
such personnel aspects as employee morale, multiplicity of trade unions and inter and intra<
union rivalries. It is said that our culture, unlike ,hristianity, stresses individual salvation
and negation of the world. Behind a small charity or a good deed, it is pointed outB there is
.
the motive of self, rather than societyAs welfare. This is the main reason for the low morale
of our workers, multiple unions and the rivalries among them.
,ontrary to popular belief, our culture did advocate collectivism and general welfare. 8s a
proof of collectivism, we are told about guilds which played a ma#or role in the economy of
ancient India.
The guild united both the craftsmenAs cooperatives and the individual workman of a given
trade into a single corporate body. It fied rules of work and wages and standards and prices
for the commodities in which members dealt, and its regulations had the force of law and
were upheld by the king and government. 8 guild court could, like a caste council, epel a
refractory member, a penalty which would virtually preclude him from practicing his
ancestral trade and reduce him to beggary. ;e read in Buddhist literature of guild courts
settling )uarrels between members and their wives, and the rules of Buddhist order lay
down that a married woman may not be ordained a nun without the consent of her husband
and his guild. Thus, the guild had the power not only over the economic, but also over the
social life of its members. It acted as a guardian of their widows and orphans, and as their
insurance against sickness. Its powers and functions in this respect were very similar to
those of the caste councils in more recent times, and though some authorities would
disagree with us, we cannot but conclude that the guilds played an important part in the
evolution of trade castes.
,ollectivism is the hallmark of our society. ;hether it is celebrating a marriage, a social
function, inauguration of a business unit or installing a ,C, machine in a factory, we
believe in people and crowds. ;e have factories :particularly in !ublic (ector) which have
thousands of employees and we have trade unions whose membership runs into lakhs.
3! Am(itious or Com"lacent: 8n individualAs ambition to grow or remain complacent
depends on his cultural ethos. 8n ambitious individual is highly motivated, is wealth
ac)uisitive, has a strong urge to ecel, is prepared to change organisations and even take
risks. /conomy becomes vibrant if a large proportion of the population comprises ambitious
people.
-a#ority of our people are known to be complacent. 8n average citi6en will be happy to get
into a government #ob :lower the order, the better) as it assures safety ofB tenure and
demands no initiative, no skills and no hard work. =e is not prepared toB #oin the private
sector as the #ob here demands hard work and high productivity. ,omplacency of citi6ens is
attributed to be one of the reasons for the backwardness of our economy.
,ontrary to popular belief, our society has been known for its ambition, particularly in
wealth ac)uisition. 4urs is probably the only society in the world where wealth is
worshipped in the form of +oddess 0akshmi unlike in the ;est where wealth is merely
respected.
0ooking at the past, in most Indian literature, the world is viewed from the angle of well<to<
do. !overty, it is more than once said, is a living deathB to serve another for oneAs keep is a
dogAs life, and not worthy of an 8ryan. $rom the time of the 2ig &eda, which contains
many prayers for riches, worldly wealth was looked as morally desirable for the ordinary
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man, and indeed essential to lead a full and civili6ed life. The ascetic who voluntarily
abandoned his wealth performed an act of renunciation which entitled him to the utmost
respect, though by such renunciation, he assured himself of spiritual advancement, as well
as the way to salvation :-oksha). The fourth and ultimate aim of eistence, the asceticAs
life, was not that of an ordinary man, and the theoretical classification of the four stagesF of
life gave ample scope in the second stage to the householder, who was indeed encouraged to
build up the family fortunes, and to spend part of them at least on the pleasures of the
senses.
4! Education: The close interface of business and higher education is a new development.
,enturies ago, each had a somewhat hands<off attitude towards the other. 8 relatively small
section of the intellectual elite maintained their seclusion in university halls, educating a
few selected students to become intellectual and social leaders of their nation. /ducation
was not for the masses who laboured in factories, fields and stores. Gniversity education
had little interest in business and businessmen had little interest in education.
5! Famil#: Basic to all types of social organisations is the family, the institution which
concerns itself with love, seual relationship, marriage, reproduction, socialisation of the
child and the various levels of status and roles involved in kinship organisation. 0ittle
wonder that the family is referred to as a remarkable institution.
The family is recognised as the institution responsible for procreation and child<rearing. In
civili6ed societies, especially, the process of child socialisation has come to have
tremendous significance. +one are the days when the children should be seen but not heardB
on the contrary, the importance of childhood and the effects of home life on personality and
character formation have been widely recognised. In fact, as the basic primary group, the
family probably has more to do with the childAs ultimate behavioral pattern than does any
other single environment factor, and it is on this assumption, that a loose home life is so
often associated with delin)uency.
6! Aut%orit#: The eercise of authority varies according to the management styles, but
different styles are likely to be present in different cultures. 4ne research relevant to this has
produced a measure of the cultural differences<the power distance measure. This is defined,
Aas a measure of inter<personal power of influenceA, between a boss and a subordinate, as
perceived by the least powerful of the two, while the distance is seen as the etent to which
either participant can influence the behaviour of the other. It is suggested that the distance is
to a considerable etent determined by their national culture. The evidence for this
statement has been provided by research in 'H countries in which )uestions were asked on
such sub#ects as the fear subordinates have of epressing disagreement with their bosses
:answers epressed by AI am afraid very fre)uentlyA through to AI am afraid seldomA). The
answers have been assembled in a series of tables showing power distance inde values
varying H* :Avery often afraidA) for the !hilippines to 11 :Avery seldom afraidA) for 8ustria.
! T%e 7ie/ o8 Scienti8ic Met%od: It is said that, unlike ;estern society, our society is
steeped in fatalism and the theory of Iarma. The followers of our religion do not appreciate
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the logic of things logic of wealth, rainfall, demand<supply mechani6ation and related
phenomena. It is also said that they believe in preserving traditional mores and are not
adaptive to things modem.
,ontrary to popular belief, our views did not conflict with science. 8 study of the
Gpanishads will show that &edanta postulates that the universe is the result of a gradual
unfolding of the creative power inherent in the primordial substance. In fact, it may be said
that the philosophy of our religion anticipated the basic theories of biology and physics. The
very approach to things in the Gpanishads, the insistence on adherence to truth and on
tireless investigation is remarkable in the nature of an anticipation of the methods of
science.
&! Et%ics in Business: /thics refers to the code of conduct that guides an individual in
dealing with others. 8 formal definition of ethics is that it deals with personal conduct and
moral duty and concerns human relations with respect to right and wrong. /thics concerns
morals and philosophy. It deals with the behavior of individuals and the standards
governing the interrelationship between individuals. /thical rules differ from legal rules in
as much as the former are not enforced by public authority whereas the latter are. 0egal
rules become unnecessary when ethical rules are observed by businessmen. (ociety epects
businessmen to act ethically.
Business ethics :also known as corporate ethics) is a form of applied ethics or professional
ethics that eamines ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct and is relevant to the conduct of
individuals and entire organi6ations.
Business ethics reflects the philosophy of business, one of whose aims is to determine the
fundamental purposes of a company.
/thics in business are nothing but the doJs and donJts of a business user in the business. It
could be referred to as a set of principles that a business man ought to follow based on
social, cultural and business principles.
Business /thics would go a long way towards helping an organi6ation in fulfilling its social
and moral needs.
In todayJs dynamic and fast changing business and economic environment the corporate
feels the need to set down a set of rules, guidelines or resolutions defining the action and
interaction as well as the reaction of the company and the individuals associated with the
company, such as its promoters, shareholders, officers, employees, suppliers and in certain
instances also the suppliers to various dynamic situation in the internal and eternal
environment of the company. This is done by using various tools likeB
&ision (tatement.
-ission (tatement.
(etting ,orporate 4b#ectives.
(etting department 4b#ectives.
Gsing ,areer tree to set individual ob#ectives.
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!olicy document for !ublic behaviour.
!olicy document for rules and regulations within the organi6ations
Thus /thical issues include the rights and duties between a company and its employees,
suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Issues
concerning relations between different companies include hostile take<overs and industrial
espionage. 2elated issues include corporate governanceB corporate social entrepreneurshipB
political contributionsB legal issues such as the ethical debate over introducing a crime of
corporate manslaughterB and the marketing of corporationsA ethics policies.
I 5/uld c/%"r 6/ll/5ing ar"a& /6 h" c/r0/ra"#
Finance: The ,ompany has a fiduciary responsibility to its promoters and shareholders
i.e. of earning a return.
Sales 9 Mar0etin,: ,arrying on with its business by providing goods and services in a
manner to the customers which is neither using nor making false claims or by way of
fraud or other such nefarious means.
:uman Resource mana,ement: The corporate has to ensure that it employs within the
framework of the law and using guidelines set under labour laws and employment
contracts. The world over use of child labour in business is a huge ethical dilemma faced
especially in developing countries wherein it is used to bring down manufacturing costs,
but is against the laws and principleJs of I04 : International 0abour 4rgani6ation)
Production: To produce using optimum )uality of material and resources without
damaging or polluting the environment is the principle goal of all organi6ations. To
maintain ethical standards re)uired and to also maintain low costs is an ethical challenge
typically faced by pharma, chemicals and /nergy generation industries.
=owever with a variety of norms now critical and essential like I(4 %KKK " HKK1, I(4
1*KKK etc as also the movement towards 0/8C -8CG$8,TG2IC+ -8C8+/-/CT as
well as use of various management techni)ues like @IT : @ust in time ) , Iai6en , (i (igma
etc for decision making, overall corporate is showing a greater sensitivity to moral and
social commitments and responsibilities.
Thus with a clear focus and a set of ob#ectives in front of them corporates are drafting
policy documents for a cleaner, greener and more ethical way of work which today is the
call of society and government.
CORPORATE SOCIAL RESPONSIBILIT;
,orporate social responsibility :,(2) refers to what business does over and above the
statutory re)uirement for the benefit of the society. This implies that companies must
behave and function as a responsible member of the society. The need is for some focus of
accountability on the part of the management which is not limited to shareholders alone.
The ,ompany must accept its obligation to work for the larger benefit of the community.
H
The shareholders, the suppliers of resources, the consumers, the local community and
society at large are affected by the way an enterprise functions.
*e8inition:
0ord =olmes and 2ichard ;att defined ,(2 in the ;orld Business ,ouncil for (ustainable
>evelopment as " <Cor"orate Social Res"onsi(ilit# is t%e continuin, commitment (#
(usiness to (e%ave et%icall# and contri(ute to economic develo"ment (# im"rovin, t%e
=ualit# o8 li8e o8 t%e /or08orce and t%eir 8amilies as /ell as o8 t%e total communit# and
societ# at lar,e!-
CORPORATE SOCIAL RESPONSIBILIT; MO*ELS
There are some models that attempt to describe the evolution and etent of social
orientation of companies. 8rchie B. ,aroll defines ,(2 as the entire range of obligations
business has to society, and has proposed a three dimensional conceptual model of
corporate performance. 8ccording to ,aroll, a firm has the following four categories of
obligations of corporate performance.
/conomic
0egal
/thical
>iscretionary
The firm being an economic entity has a primary responsibility of "c/n/!ic, i.e., efficient
in operations to satisfy economic needs of the society and generation of surplus for
rewarding the investors and for further development.
L"gal responsibilities are also fundamental in nature because a company is bound to obey
the law of the land.
Ehical responsibilities are certain norms which the society epects the business to observe
though they are not mandated by law. $or e.g, a company shall not resort to bribing or
unethical practices.
Di&cr"i/nary responsibilities refer to the voluntary contribution of the business to the
social cause, like involvement in community development or other social programmes.
1K
Fig$ ( Car/ll& M/d"l /6 R"&0/n&ibilii"& /6 -u&in"&&
RESPONSIBILITIES TO>AR*S *IFFERENT SECTIONS
Res"onsi(ilit# To/ards S%are%olders: The responsibility of a company to its
shareholders, who are the owners, is indeed a primary one. The fact that the share holders
have taken a great risk in making investment in the business should be ade)uately
recogni6ed.
To protect the interests of the shareholders and employees, the primary business of business
should be to stay in business. To safeguard the capital of the shareholders and to provide a
reasonable dividend, the company has to strengthen and consolidate its position. =ence it
should develop and improve its business and build up financial independence.
The shareholders are interested not only in the protection of their investment and the return
on it but also in the protection of the public image of the ,ompany. It shall therefore be the
endeavor of the ,ompany to ensure that its public image is such that the shareholders can
feel proud of their ,ompany.
Res"onsi(ilit# to Em"lo#ees: The success of an organi6ation depends to a very large
etent on the morale of the employees and their whole hearted cooperation. /mployee
morale depends to a large etent on the discharge of the companyJs responsibilities to them
and the employer<employee relationship. The responsibility of organi6ation to its employees
includes:
1. The payment of fair wages.
%. The provision of the best possible working conditions.
'. The establishment of fair work standards and norms
*. The provision of labour welfare facilities to the etent possible and desirable
.. 8rrangement of proper training and education to workers.
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5. 2easonable chances and proper system for accomplishment and promotion.
7. !roper recognition, appreciation and encouragement of special skills and capabilities
of the workers.
9. The installation of an efficient grievance handling system
H. 8n opportunity for participating in managerial decisions to the etent desirable.
Res"onsi(ilit# To/ards Consumers: 8ccording to 7""r Druc8"r) 9h"r" i& /nly
/n" %alid d"6inii/n /6 bu&in"&& 0ur0/&": / cr"a" a cu&/!"r$ >rucker observes ha
;Th" cu&/!"r i& h" 6/undai/n /6 a bu&in"&& and 8""0& i in "<i&"nc"=$
It has been widely recogni6ed that customer satisfaction shall be the key to satisfying the
organi6ational goals. Important responsibilities of business to customers are:
1. To improve the efficiency of the functioning of the business so as to
a) Increase productivity and reduce prices
b) Improve )uality
c) (moothen the distribution system so as to make goods available.
%. To do research and development, to improve )uality and introduce better and new
products.
'. LTo make appropriate steps to remove imperfections in the distribution system,
including black marketing
*. To supply goods at reasonable prices even when there is a sellerJs market
.. To provide the re)uired after<sale services.
5. To ensure that the product supplied has no adverse effect on the consumers.
7. To provide sufficient information about the product, including their adverse effects,
risks and care to be taken while using the products.
9. To avoid misleading the customers by improper advertisements or otherwise
H. To provide an opportunity for being heard and to redress genuine grievances
1K. To understand the needs of the customers and take necessary measures to satisfy
these needs.
Res"onsi(ilit# To/ards Communit## 8 business has a lot of responsibility to the
community around its location and to the society at large. These responsibilities include:
1. Taking appropriate steps to prevent environmental pollution and to preserve the
ecological balance.
%. 2ehabilitating the population displaced by the operation of the business if any.
'. 8ssisting in the overall development in the society.
*. Taking steps to conserve scarce resources and developing alternatives, wherever
possible
.. ,ontributing to research and development
1%
5. >evelopment of backward areas.
7. -aking possible contribution to furthering social causes like the promotion of
education and population control.
9. !romotion of small scale and ancillary units.
T:E TATA 'ROUP: A LE'AC; OF TRUST
The foundation of the Tata group of companies was laid by @amshet#i Cusserwan#i Tata
with the establishment of a trading firm in 1959. Tata has ventured into businesses that
were, hitherto, considered beyond the capability of any Indian company, and has built
businesses that are still considered as industry bench marks many years after their
establishment. Tata is IndiaJs largest and most diversified business conglomerate with more
than 1KK operating companies spread across 9. countries in 5 different continents,
employing '.. lakh people and generating revenue of G( M 7K.9 billion as of financial year
%KKH. The groupJs global business operation are spread over seven business sectors:
communication and information technology, engineering, materials, services, energy,
consumer products and chemicals.
Tata ,ompanies share five core values " integrity, understanding, ecellence, unity and
responsibility. 8dherence to ethics and ecellence and the commitment towards serving
communities have been at the core of TataJs unblemished growth and sustenance for over
1*K years.
The nai/nal in&iu"& /6 l"arning and r"&"arch that Tata helped establish and still
continues to support are:
Indian Institute of (cience
Tata Institute of $undamental 2esearch
Tata Institute of (ocial (ciences
Tata -emorial ,entre
Tata -edical ,entre
@2> Tata /co<Technology ,entre
The Taa 'agrii Yara is an annual eperiential train #ourney that seeks to awaken the
spirit of social and economic entrepreneurship in young adults.
C/d" /6 H/n/ur is a special edition of Tata 2eview, which features the corporate
sustainability and community initiatives undertaken by Tata and Tata Trusts.
Ar,uments For and A,ainst Social Res"onsi(ilit# o8 Business
;hile there is a lot of appreciation of the idea of social responsibility of business, there are
also people who argue that social involvement of business has certain negative aspects:
Ar,uments in Favour o8 Social Res"onsi(ilit#:
1'
1. Business which survives using the resources of the society has a responsibility to the
society.
%. Business which is an integral part of the social system has to care for the various
needs of the society.
'. Business which is resourceful has a special responsibility to the society.
*. (ocial involvement of business would foster a harmonious and healthy relationship
between the society and business and to the mutual benefit of both.
.. (ocial responsibilities like recycling of waste may have favourable environmental as
well as financial effects.
5. (ocial involvement may create a better public image for the company which may
help in attracting customers, efficient personnel and investors.
Ar,uments A,ainst Social Res"onsi(ilit# o8 Business:
1. Business should confine to its own business. There are government and social
organi6ations to carry out social activities.
%. Involvement in social activities could adversely affect the economic health of a
business enterprise. (ometimes ependitures on social welfare impose severe burden
on the ,ompany.
'. If the cost of the social involvement of business is ultimately passed on the
consumers, there is no point in ealting the social involvement of business.
*. -any ,ompanies involve themselves in social activities because of the ta
eemptions on the income spent on special social purposes.
.. If the social involvement of a business enterprise causes an increase in the price of
the product, it could affect its competitiveness both in the domestic and international
markets.
5. (ocial involvement of business could lead to an increase in the dominance or
influence of business over the society.
CONSUMER RI':TS$ CONSUMER PROTECTION$ CONSUMERISM
8n important socio<political environment confronting business is the growth of
consumerism and the legislative measures to protect the consumers. !rofessor @ohn $.
Iennedy has recogni6ed that consumers are the largest economic group in the countryJs
economy, affecting and affected by every public and private economic decision. But they
were also the only important group who were not effectively organi6ed, whose views were
not heard.
CONSUMER RI':TS
1*
To safe guard the interest of consumers is the need of the day as they are the king of the
market. (o, under (ection 5 of ,onsumer !rotection 8ct, 1H95, +ovt. provided following
rights to consumers.
:1) Righ / Sa6"y# It is the right to safety against such goods and services as are
ha6ardous to life, health and property to the consumer. ,onsumer has the right to
safety against loss caused by such product.
:%) Righ / b" In6/r!"d# ,onsumer has also the right that he should be provided all
those information on the basis of which he decides to buy a product. These
information related to )uality, purity, )uantity, standard, date of manufacture and
date of epiry of the product.
:') Righ / Ch//&"# ,onsumer has the full right to buy any product of his choice from
among the different products available in the market. In other words, no seller can
influence his choice in an unfair manner.
:*) Righ / b" H"ard: ,onsumer has the right that his complaints be heard. Gnder this
right the consumer can file complaint against all those things which are pre#udicial
to his interest. (everal large organi6ations have set<up consumer service cell with a
view to providing the right to be heard to the consumer.
:.) Righ / S""8 R"dr"&&al# This right provides compensation to consumer against
unfair trade practice of the seller. (everal redressal are available to the consumer by
way of compensation, free repair of the product for certain fied time period.
2eplacement of the product, taking back of the product by the seller.
:5) Righ / C/n&u!"r Educai/n# ,onsumers must be aware of the rights they en#oy
against the loss they suffer on account of any product purchased by them.
+overnment has taken several measures to educate the consumers. $or instance
+overnment publishes a )uarterly maga6ine under the title 1G!B=4IT8
@8+28C3.
CONSUMER 7ROTECTION#
M"aning#
To protect the consumer against the unfair practices of the producers and sellers is called
consumer protection.
$or effective consumer protection a practical response on the part of ' party is essential.
:1) 7r/duc"r# The businessmen comprising the producers and all the elements at the
distribution channel has to pay due regard to consumer rights. The producer has an
inescapable responsibility to ensure efficiency in production and the )uality of output. =e
should also resist the temptation to charge eorbitant prices in a sellerJs market. -any a
times hoarding and black marketing are practiced which affect the consumers. =ence a
socially responsible producer should see to it that whatever is produced should reach the
ultimate consumer in time and at reasonable price. ,onsumerism is in fact regarded as an
opportunity for many consumer oriented businessmen.
1.
:%) 2/%"rn!"n# The +overnment has to come to rescue of the helpless consumers to
prevent him from being misled, cheated and eploited. The +overnment role in consumer
protection is vital and final epression through policy making, legislation and development
of institutional capacity for its enforcement. $or e.g., +overnment needs to establish assist
in the creation of ade)uate storage and distribution and retail facilities for essential goods
and services. +overnment should adopt and encourage appropriate safety regulations,
national or internal, to ensure that they are safe for the intended use.
$urther, +overnment should establish and maintain legal and administrative measures to
enable consumers or organi6ations to obtain redressal through formal or informal
procedures that are fair, inepensive and accessible. In this connection ,entral and (tate
+overnment passed many acts from time to time.
:1) >rugs ? cosmetic 8ct :1H*K)
:%) !revention of food adulteration 8ct :1H.*)
:') /ssential commodities 8ct :1H..)
:*) -onopolies and restrictive trade practices 8ct :1H5H)
:.) (tandard of weights ? measures 8ct :1H75)
:5) ,onsumer protection 8ct :1H95)
:') C/n&u!"r&# ,onsumers should accept consumerism as a means of asserting and
en#oying their rights. ,onsumerism should succeed in making business and the +overnment
more responsible to the rights of consumers.
CONSUMERISM#
+andhi#i had rightly said 18 customer is the most important visitor on our premises. =e is
not dependent on us. ;e are dependent on him. =e is not interruption in our work " he is
the purpose of it. ;e are not doing him a favour by serving him. =e is doing us a favour by
giving us the opportunity to serve him.3
M"aning# ,onsumerism is interpreted as a collective endeavor or efforts of consumer to
protect their interests, is a manifestation of the failure of the business, including that of the
public sector and the +overnment to guarantee and ensure legitimate right of the consumers.
*e8initions:
:1) !hilip Iotler: <Consumerism is a social movement see0in, to au,ment t%e ri,%ts and
"o/ers o8 t%e (u#ers in relation to sellers!-
:%) Boyd ? 8llen: <Consumerism ma# (e (est de8ined as t%e dedication o8 t%ose activities
o8 (ot% "u(lic and "rivate or,ani?ation /%ic% are desi,ned to "rotect individual 8rom
"ractices t%at im"in,e u"on t%eir ri,%ts as consumers!-
Uiliy /6 C/n&u!"ri&!# ;ell<organi6ed and dynamic consumerism may be epected to
produce the following result.
:i) ;hen consumers are strong enough to protect their right the businessman
will be compelled to stop unfair practices.
15
:ii) ,onsumerism provides feed<back to the business and enables the producers
to understand consumerJs grievances :complaint), needs and wants.
:iii) ,onsumerism will make the +overnment more responsive to consumer
interestB prompt it to take necessary and statutory measures to safe guard consumer
rights.
I!0/ran r/l"& / 0lay by c/n&u!"r /rgani>ai/n&#
?a@ C/n&u!"r Educai/n# ,onsumers are given information about various consumer
goods and services. This relates to price what consumer can epect, standard trade
practices etc. ,onsumers are made aware of their rights and responsibilities and also
the ways of getting the grievances redressed.
?b@ 7r/duc Raing# In order to guide the consumer in his choice of products, some of
the agencies like ,onsumer /ducation and 2esearch ,entre :,/2,), 8hmedabad
carry out tests, and prepare reports on these tests.
?c@ Liai&/n 5ih 2/%"rn!"n and 7r/duc"r&# ,onsumer organi6ation has to maintain
co<operative relationship with producer as well as +overnment. 8s +overnment has
key role in protecting consumers rights, the consumer organi6ation play an
important role to see that +overnment plays its role.
CONSUMER 7ROTECTION ACT) (ABC# The ob#ective of this act is to provide better
protection of the interest of consumers and for that purpose to make provisions for the
establishment of consumer councils and authorities for the settlement of consumer dispute
and for matters connected there with.
?a@ C/n&u!"r 7r/"ci/n C/uncil# The act provides for the establishment of the
,entral ,onsumer !rotection ,ouncil by the ,entral +overnment and a (tate
,onsumer !rotection ,ouncil in each state by the respective (tate +overnment.
T%e Central Council (hall consist of the -inister in charge of consumer affairs
in the ,entral +overnment, who shall be its chairman and some other official
and non<official members also. The ,ouncil shall meet as and when necessary
but at least one meeting of the ,ouncil shall be held every year.
T%e State Council shall consist of such members as may be specified by the
(tate +overnment by notification from time to time.
?b@ C/n&u!"r di&0u"& r"dr"&&al ag"nci"&# The consumer protection act provides for a
' tier consumer disputes redressal system.
?i@ A di&ric l"%"l D Di&ric F/ru!# >istrict forum hears disputes involving a
sum of less than 2s.. 0akh. It consist of
17
:8) 8 person, who is )ualified to be >istrict @udge nominated by the (tate
+overnment shall be its !resident.
:B) 8 person is speciali6ed and has eminence in the field of n trade or
commerce.
:,) 8 lady social worker.
?ii@ Sa" F/ru!# (tate $orum hears dispute from 2s.. 0akh to 2s.%K 0akh. It
consists of
:8) 8 person, who is or has been a #udge of a =igh ,ourt appointed by the
(tate +overnment, shall be its !resident.
:B) Two other members who shall be persons of ability, integrity and have
ade)uate knowledgeNeperience in dealing with problems related to
economics, law, commerce, accountancy one of whom shall be a woman.
?iii@ Nai/nal F/ru!# This commission hears disputes involving a sum eceeding
2s. %K 0akh. It shall consists of
:8) 8 person who is or has been a #udge (upreme ,ourt appointed by
,entral +overnment.
:B) Two other persons who have ade)uate knowledge and eperience in the
field of trade and commerce.
?c@ R"!"dial Aci/n&# If any redressal agency is satisfied that the complaint is genuine then
it shall issue an order to the opposite party directing him to take one or more of the
following actions:
:i) To remove the defect pointed out.
:ii) To replace the goods with new goods of similar description this shall be free
from all defects.
:iii) To pay such amount as may be declared as compensation to the consumer for
any loss suffered by the consumer.
:iv) To discontinue the unfair trade practices.
:v) Cot to offer the ha6ardous goods for sale.
:vi) To withdraw the ha6ardous goods from market.
?d@ 7"nali"&# If a trader or producer against whom a complaint is lodged is found guilty, he
shall be punished with imprisonment for any term not eceeding ' years. In case of punitive
damages, the penalty may be e)uivalent to the loss of revenue in service or the value of the
product which ever is higher as well as the interest and fine not eceeding 2s. 1K,KKK.
C/nclu&i/n# The ,onsumer !rotection 8ct 1H95 which was modified by the 8mendment
8ct of 1HH' is a very important means to protect the consumer rights. 4ne redeeming
feature of this act is that it applies not only to private sector but also to the public sector and
19
+overnment agencies. In fact, the 8ct envisages a simple, inepensive and speedy redressal
of consumer grievances related to defective good, deficient services and unfair and
restrictive trade practices. But taking recourse to the law is sometimes affected by the lack
of consumer awareness and education.
3HAT IS 3OMEN EM7O3ERMENT4
(elf<decision regarding education, participation, mobility, economic independency, public speaking,
awareness and eercise of rights, political participation and many more factors ensure women
empowerment. In short women empowerment is the breaking of personal limitation for the ;omen
at an individual, cultural, social and political level across the world so as to ensure over all well
being of society.
SI2NIFICANCE# ;omen bear almost all responsibility for meeting basic needs of the family, yet
are systematically denied the resources, information and freedom of action they need to fulfill this
responsibility.
The vast ma#ority of the worldAs poor are women. Two<thirds of the worldAs illiterates are female. 4f
the millions of school age children not in school, the ma#ority are girls. 8nd today, =I&N8I>( is
rapidly becoming a womanAs disease. In several southern 8frican countries, more than three<)uarters
of all young people living with =I& are women.
The current world food price crisis is having a severe impact on women. 8round the world, millions
of people eat two or three times a day, but a significant percentage of women eat only once. 8nd,
now, many women are denying themselves even that one meal to ensure that their children are fed.
These women are already suffering the effects of even more severe malnutrition, which inevitably
will be their childrenAs fate as well. The impact of this crisis will be with us for many years.
The hr"" 6unda!"nal 6ac/r& r"c/gni>"d by UNO 6/r h" "!0/5"r!"n /6 5/!"n world wide
areB
RI2HT TO EDUCATION# In India 0iteracy rates among women are comparable to the poorest
in the world. It has been proven in various societies that education helps all including women to
broaden their scopes and hori6ons. It enables and e)uips them to support their families and to guide
them better in todayJs fast changing environment.
In India $ree !rimary education for all and free (econdary education for girls has been in practice
for decades. =owever due to social and economic compulsions it has been observed that more often
than not preference is given to the male child over the female child in terms of getting education .
1H
Gnder Con<$ormal /ducation programme :C$/), about *KO of the centers in states and 1KO of the
centers in GTs are eclusively reserved for females.Ecitation neededP 8s of %KKK, about K.' million
C$/ centers were catering to about 7.*% million children, out of which about K.1% million were
eclusively for girls.Ecitation neededP In urban India, girls are nearly at par with the boys in terms of
education. =owever, in rural India girls continue to be less educated than the boys.
8ccording to a 1HH9 report by G.(. >epartment of ,ommerce, the chief barrier to female education
in India are inade)uate school facilities :such as sanitary facilities), shortage of female teachers and
gender bias in curriculum :ma#ority of the female characters being depicted as weak and helpless).
E'7P
The government by making the 2I+=T to />G,8TI4C a fundamental right has taken a step in the
positive direction towards ensuring basic education for all, especially the women.
3OREFORCE 7ARTICI7ATION# GC4 has suggested better and stronger participation of
women in the workforce.
Thi& h"l0& /:
< /mpower women.
< -akes the work place more balanced and dynamic.
< Improves status of women in society conse)uently benefiting society.
,ontrary to the common perception, a large percent of women in India work. The Cational data
collection agencies accept the fact that there is a serious under<estimation of womenAs contribution
as workers. =owever, there are far fewer women in the paid workforce than there are men. In urban
India ;omen have impressive number in the workforce. 8s an eample at software industry 'KO of
the workforce is female. They are at par with their male counter parts in terms of wages, position at
the work place.
In rural India, agriculture and allied industrial sectors employ as much as 9H..O of the total female
labour in overall farm productionB womenAs average contribution is estimated at ..O to 55O of the
total labour. 8ccording to a 1HH1 ;orld Bank report, women accounted for H*O of total
employment in dairy production in India. ;omen constitute .1O of the total employed in forest<
based small<scale enterprises.
4ne of the most famous female business success stories is the (hri -ahila +riha Gdyog 0i##at
!apad. In %KK5, Iiran -a6umdar<(haw, who started Biocon < one of IndiaAs first biotech companies,
was rated IndiaAs richest woman. 0alita +upte and Ialpana -orparia :both were the only
%K
businesswomen in India who made the list of the $orbes ;orldAs -ost !owerful ;omen), run
IndiaAs second<largest bank, I,I,I Bank.
LAND F 7RO7ERTY RI2HTS# In most Indian families, women do not own any property in their
own names, and do not get a share of parental property. >ue to weak enforcement of laws protecting
them, women continue to have little access to land and property. In fact, some of the laws
discriminate against women, when it comes to land and property rights.
The =indu personal laws of mid<1H.5s :applied to =indus, Buddhists, (ikhs and @ains) gave women
rights to inheritance. =owever, the sons had an independent share in the ancestral property, while
the daughtersA shares were based on the share received by their father. =ence, a father could
effectively disinherit a daughter by renouncing his share of the ancestral property, but the son will
continue to have a share in his own right. 8dditionally, married daughters, even those facing marital
harassment, had no residential rights in the ancestral home. 8fter amendment of =indu laws in
%KK., now women in have been provided the same status as that of men.
In 1H95, the (upreme ,ourt of India ruled that (hah Bano, an old divorced -uslim woman was
eligible for maintenance money. =owever, the decision was vociferously opposed by fundamentalist
-uslim leaders, who alleged that the court was interfering in their personal law. The Gnion
+overnment subse)uently passed the -uslim ;omenAs :!rotection of 2ights Gpon >ivorce) 8ct.
(imilarly, the ,hristian women have struggled over years for e)ual rights of divorce and succession.
In 1HH*, all the churches, #ointly with womenAs organisations, drew up a draft law called the
,hristian -arriage and -atrimonial ,auses Bill. =owever, the government has still not amended
the relevant laws.
2ight to !roperty and land is very critical for the woman to establish her credentials as an e)ual
partner in society. It would give her financial and /motional (ecurity creating a more healthy and
able body and mind to nurture society.
3OMEN EM7O3ERMENT AND FEMINISM IN THE INDIAN CONTEGT
India has a rich and very ancient heritage and culture. >uring the time of the &edas, it is firmly
believed that society was gender neutral and educated women stood shoulder to shoulder with the
men in running the household and administration.
They administered the house and took over all domestic responsibilities whereas the men using their
knowledge and skill would take over all eternal duties. This had nothing to do with gender bias or
%1
discrimination but it was purely an attempt at a practical way of dividing the work which went into
smooth functioning of family and society as a whole.
Then came the invasions of the -ughals, followed by barbaric invasions of our northern and
western regions by the !athans and the -ongols.
8t that time women e)uality took a backseat and the seeds for a male dominated or male<controlled
system were sown. ,ompletely revolting social customs like ,hild marriage, (ati and the >evdasi
culture took their root round about the 1'
th
and 1*
th
century. 8 large contribution to this was also
because of the birth of the ,aste system in India where the Brahmins were at the top and given a
free hand to interpret and run our society to suit individual preferences and massage their own egos.
Traditionally it came to be accepted that women were now the weaker se and they needed to be
protected. In the name of protection their were restrictions on movement , freedom to education and
so on till the woman became a mere follower of first the $ather N Brother , then the =usband and
finally the (on .
8ll this lead to a deeply repressive society leading to digression of the overall social fabric.
=owever even at this time we have valiant /amples of ;omen likeB
< 2a6ia (ultan " 4nly women /mperor of >elhi
< @i#abai " (hiva#iJs mother who was also his guardian and guide.
< >urgavati ruler of +ond.
< 2ani 0amibai
< Cur @ehan , wife of /mperor @ahangir and the woman behind his power
8nd many such eceptions.
Then came the ;omenJsJ /mancipation movement lead by @yotiba !hule, 2am -ohan 2oy and
such others. Gnder this womenJs /ducation, abolishing of ,hild marriage and a thrust to ;idow re
marriage was given to uplift the status of the ;omen in (ociety.
The freedom struggle gave birth to a list of visionary women freedom $ighters like 8nnie Besant,
(aro#ini >evi Caidu, &i#aylakhsmi !andit and so on.
Today we have a lady as the !resident of India. ;e have had well educated and courageous ladies
occupying each post within the 8dministration right from the ,ollector level to the top bureaucracy
to the !rime minister and now even the !resident.
But will this background can we say that ;omen in India today are free and empowered.
4ver the past few months we have seen a lot of Ihap !anchayats ruling against inter caste
marriages and encouraging The =onour killings .
%%
;e still have the one of the highest $emale -ortality 2ates in the world .2eason as mentioned
below is self eplanatory B
The eceptions include ,hina and India, the most populous countries with a solid record of
tampering with the se ratio at birth. In both countries, not only are fewer females being born " by
decree of the one<child policy in ,hina and by male preference choice in India " but surviving
female babies are often abandoned or left to die, especially if food is scarce and families cannot feed
all their children. /ven anecdotal evidence bears this out. $or eample, visitors to -other TeresaJs
orphanages in ,alcutta note the presence of more females than males.
/ven today as we speak lakhs of girls are being denied education as the preference is given to the
male child . This despite the fact that we have defined 2ight To /ducation as a fundamental right .
/ven today in the %1
st
,entury there is a tendency among ma#ority to look down upon the abilities of
the women .
Today when we have corporate leaders like Indra Cooyi , ,handa Iocchar , Iiron -a6umdar (haw
, to name #ust a few , ;e also have a @essica ,we also have numerous young girls across the length
and breadth of India falling victims to =onour Iillings Q.
In India there is clearly a social and ,ultural >ivide . The problem lies not in the Individual but in
the ,ollective mindset of (ociety which finds it ,onvenient to 2estrain the creativity and ability of
the Indian female . 4ne obvious reason is that the -ale ego gets threatened both at the conscious
and subconscious level .
$or generations we have become attuned to the fact that women have to lead a deprived life and
have to toe the male line .
This may not be true for an elite few , but when we talk of the +reat Indian -iddle class which
comprises of the masses then glaring mortality figures , dowry deaths and honour killings belie the
fact that we are an /)ual society .
True womanJs empowerment would come only then when an Individual girl is born healthy and
happy and then on in life she has the freedom to make her ,=4I,/( .
The choice to educate herself , the choice to work, the freedom to choose her life partner and so
many other countless choices which the males in society takes so much for granted.
*ISCLAIMER:
This study material is prepared by Dr. Shuvasri Das. The basic objective of this material is
to supplement teaching and discussion in the classroom in the subject. Students are
required to go for extra reading in the subject through Library wor.
%'
%*

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