Even after opening up of Indian Economy, foreign companies found it extremely difficult to cut through the bureaucratic and red-tapism in government offices. This discourages them from investing in India. Identify the dimension of environment mentioned in this context.

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Solution

Political Environment.

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Even after opening up of our economy in 1991, foreign companies found it extremely difficult to cut through bureaucracy and red tapism. Identify the element of business environment and explain it with the help of an example.

Lately, many companies have planned for significant investments in organised retailing in India. Several factors have prompted their decision in this regard. Customers income is rising. People have developed a taste for better quality products even though they may have to pay more. The aspiration levels have increased. The government has also liberalised its economic policies in this regard and permitted even cent-percent foreign direct investment in some sectors of retailing.

(a) Identify changes in the business environment under different heads: economic, social, technology, political and legal that have facilitated the companies decisions to plan significant investments in organised retailing.

(b) What has been the impact of these changes with regard to globalisation and privatisation?

An established pharmaceutical company from the United States has done scanning of its business environment and realises the following factors of potential growth in India.

(i) Government in India is encouraging NRIs and foreign investors to invest in Indian companies.

(ii) There would be an improvement in the quality of life of people in India.

(iii) The ruling party is encouraging the foreign companies in India.

(iv) A law has been passed in the parliament relating to delicensing policy on industries.

(v) Procedure for import and export of technology has been simplified.

What are the various dimensions of the business environment? Give an example of each.

One major government initiative to attract foreign companies to invest in India is:

Statement: Should there be complete ban on Indian professionals seeking jobs elsewhere after getting their education in India?

Arguments:
I. Yes. This is the only way to sustain present rate of technological development in India.
II. No. The Indians settled abroad send huge amount of foreign exchange and this constitutes a significant part of foreign exchange reserve.
III. No. The practical knowledge gained by Indians by working in other countries help India develop its economy.

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