Methodology of Business Education - For The University of Karala's Perspectives and Methodology of Busines Education (BCom programme)

171 Pages·2010·1.035 MB·English

by  Mathew Emmanuel

Methodology of
Business Education
For the University of Kerala
MATHEW EMMANUEL
Delhi • Chennai • Chandigarh
Copyright © 2010 Dorling Kindersley (India) Pvt. Ltd.
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ISBN: 978-81-317-3409-4
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Syllabus of the
University of Kerala
CO1141: PERSPECTIVES AND METHODOLOGY OF BUSINESS EDUCATION
Credits—3; Contact hours—69
Aim of the course
The course aims at introducing the student to the world of business studies and the general
methodology of different subjects that come under it.
Objectives of the course
1. To understand business and its role in society
2. To understand entrepreneurship and its heuristics
3. To comprehend the business environment
4. To enable the student to undertake business activities
Module I (12 hours)
Functioning of economic systems: divisions of labour, innovation, flow of goods and services
and accumulation of wealth under different economic systems—capitalism, socialism, com-
munism, mixed economies, planned economies.
Different forms of business organization: individual and organized business, family and
corporate entities, business for profit and not-for-profit.
Business entities: individuals, cooperatives, trusts, partnerships, undivided families, joint
stock companies, private public and joint ventures.
Business examples in different sectors of the economy (primary, secondary and ter-
tiary): agriculture, trading, retailing, manufacturing, hospitality, tours, travel, recreation,
adventure sports, healthcare, education and other contemporary business areas.
Module II (12 hours)
Role of business in economic development.
The Indian development experience: role of public and private sectors in the post-
colonial period, experience of liberalization and globalization.
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Different stakeholders in business firms: owners, managers, employees and others.
Emergence of “managerialism” and the role of corporate governance.
The goals of business: shareholder value maximization and its alternatives; goals of
public sector, cooperatives and non-profit enterprises.
Government regulation of business: objectives, methods and problems.
Module III (18 hours)
Establishing a business: entrepreneurship; legal, physical, financial, social and psychological
endowments for entrepreneurs; individual and group entrepreneurs; “intrapreneurs”.
Mobilization of financial resources for business: individual savings, domestic savings in
India, loans and advances.
Source of funds: markets for raising money; short-term and long-term funds; lending
institutions for business funds; banks and non-banking financial institutions; cost of capital;
documenting finding sources; areas of expenses.
Accounting and accounting practices.
Returns on investment: factors of production and rewards to factors like payment of
wages, rent, interest and profits.
Payment to government: taxes—direct and indirect, state and national levels.
Funds from the primary and secondary markets; stock exchanges and their role; stock
broking; stock exchange cues.
Module IV (12 hours)
Role of trained manpower for enhanced quality at individual, family, organizational and
national levels.
Functioning of organizations: the role of human resources; management problems in
small/medium/large organizations; quality of life; production of tangible and intangible
products; marketing and its role.
Market conditions: perfect and imperfect markets and their impact on prices and
profit.
Use of technology in organizations; electronic storage of business data; retrieval and
analysis; user-friendly software.
Module V (15 hours)
Learning business information: use of reading techniques; listening to lectures by individual
and team faculty; note taking; student seminars; individual and team presentations; field
studies; case studies; project reports.
Posing problems for investigation.
Data location; primary and secondary sources; use of cross tabulation; tabular presenta-
tions; diagrammatic representation of data; deducting inferences.
Reporting results and suggesting executive action.
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Contents
Preface viii
About the Author ix
1. Economic Systems and Tertiary Sector 35
Business Organization 1 Exercises 46
Economic Systems 1 References 50
Central Problems of Every
2. The Role of Business in
Economic System 2
Economic Development 53
Division of Labour 2
Introduction 53
Innovation 3
Concept of Economic Development 53
The Different Economic Systems 4
Contribution of Business to the
Capitalism 4
Development of a Society 54
Socialism 6
The Indian Development Experience
Mixed Economy 11
in the Post-Colonial Period 55
Forms of Business Organization 12
The Early Phase of
For-Profit Business Organizations 13
Development Strategy 55
Sole Proprietorship 13
Development Strategy and
Hindu Undivided Family Business 14
Experience in the 1960s 56
Cooperative Organizations 15
Development Strategy and
Trusts 18 Experience in the 1970s and 1980s 56
Partnership Firm 19 Development Strategy and
Joint Stock Companies: Experience During Liberalization
A Corporate Entity 22 and Globalization 57
Private Enterprises 25 The Role of the Public Sector
Public Enterprises 26 in India 59
Joint Ventures 27 Changing Role of the Public
Nonprofit Organizations 28 Sector in India 60
Problems Faced by NPOs 29 The Role of the Private
Sector in India 60
Business Examples in Different
Sectors of the Economy 29 The Different Stakeholders
of Business Firms 62
Primary Sector: Agriculture 29
Owners 62
Secondary Sector: Manufacturing 33
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Managers 62 Loans and Advances 86
Employees 62 Sources of Funds 87
Marketing Intermediaries Market for Raising Money:
and Suppliers 63 Short-term and Long-term Funds 88
Customers 63 Lending Institutions for Business:
Financial Institutions 63 Banks and Non-Bank Financial
Institutions 88
The Public 63
Banks 88
Emergence of Managerialism and
the Management Boom 63 Non-Banking Finance Companies 89
Role of Corporate Governance 64 International Source of
Business Funds 89
Best Practices in
Cost of Capital 90
Corporate Governance 65
Documenting Funding Sources 90
Alternative Goals of Business 65
Areas of Expenses 91
Shareholder Value
Maximization Model 67 Accounting and Accounting Practices 91
Value Creation and Dividend 67 The Accounting Process 92
Limitations of the Value Accounting Standards 93
Maximization Model 68 Returns on Investment 94
Goals for the Public Sector 68 Factors of Production
Goals for the Cooperative Sector 69 and Their Rewards 95
Goals for Nonprofit Enterprises 69 Land 95
Government Regulation of Business 70 Rent: The Reward for Land 95
Objectives 70 Labour 96
Methods of Regulation 70 Wages: The Reward for Labour 96
Exercises 72 Capital 96
References 74 Interest: The Reward for Capital 97
Profit: The Reward for
3. Establishing a Business and
Entrepreneurship 97
Entrepreneur Heuristics 75
Payment of Taxes at the
Establishing a Business Venture 75 National and State Levels 98
Factors to Be Considered for Funds from Primary and
Starting a Business 75 Secondary Markets 100
Entrepreneurship 76 Primary Market or New
Meaning and Origin of Issue Market 100
Entrepreneurship 77 Methods of Issue of New Securities 100
Factors Affecting Entrepreneurial Stock Exchanges (Secondary
Supply 79 Markets in India) 101
Intrapreneurs—An Emerging Class 82 History of Stock Exchanges 101
Mobilization of Financial Resources Characteristics of the
for Business 83 Stock Exchange 102
Domestic Savings in India 83 Organization of a
Individual/Household Savings 84 Stock Exchange 103
The Private Corporate Sector 84 Role and Functions of
The Public Sector 85 Stock Exchanges 103
Factors Affecting Savings 85 Stockbroking 104
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Stock Exchange Cues 104 Database Management System 129
Exercises 105 Data Warehousing and
References 108 Data Mining 130
User-Friendly Software 130
4. Functioning of Organizations Exercises 132
and Role of Technology 111
References 135
The Role of Trained Manpower 111
Trained Manpower at the 5. Learning Business Information 137
Individual and Family Level 112
Business Information 137
Trained Manpower at the
Reading Techniques 137
Organizational and
Strategies for Active Reading 138
National Level 112
Individual and Team Presentations 139
Functioning of Organizations 113
Listening to Lectures and
The Role of Human Resources 114
Presentations 140
Management Problems in Small,
Active Listening Techniques 141
Medium, and Large
Organizations 116 Field Studies 141
Quality of Life 117 Case Studies 142
Quality of Work Life 118 Student Seminars and
Production of Tangible and Conferences 143
Intangible Products 118 Project Report 143
Tangible Products 118 Structure of the Project Report 144
Industrial or Business Products 119 Posing Problems for
Intangible Products 119 Investigation and Research 145
Role of Marketing in Business 120 Primary and Secondary
Role of Marketing in Economic Sources of Data 145
Development 120 Primary Data 145
Trends in Marketing 121 Secondary Data 147
Market Conditions: Perfect and Tabulation 149
Imperfect Markets 122
Cross Tabulation 150
Business in a Competitive Market: Diagrammatic Representation
Impact on Prices and Profit 122 of Data 152
Business in an Imperfect Market: One-dimensional Bar Diagrams 152
Impact on Price and Profit 123
Simple Bar Diagram 153
Use of Technology in Organizations 125
Multiple Bar Diagram 153
Impact of Technology on
Sub-divided Bar Diagram 154
Organizations 125
Two-dimensional Diagrams 154
Business Models in the Era of
Pie Diagram 155
Information Technology 126
Pictograms and Cartograms 156
Electronic Storage and Retrieval
Deducting Inferences 156
of Business Data 127
Reporting Results and
Primary Memory 127
Suggesting Executive Action 157
Secondary Memory 127
Exercises 158
Structured and Unstructured Data 128
References 160
Data Organization 128
Contents • vii
Preface
My goal while writing this textbook for undergraduate-level courses in commerce was to
make the basics of business management understandable and relevant. This book makes an
attempt to anatomize the multifaceted and holistic areas of business education. The pres-
ent work is meant to serve primarily as a standard and complete textbook for the B.Com.
programme of the University of Kerala (first semester), as well as other Indian universities. It
has been prepared according to the new syllabus framed under the choice-based credit and
semester system (CCSS). The book is also useful for other management courses of Indian
and foreign universities.
I have referred to many standard reference books and journals including the recom-
mended books of a number of authors. I gratefully acknowledge my intellectual debt to all of
them. The content for this work is carefully selected and coordinated to reflect an integrated
overview and learning approach to business education. I kept in mind a dictum from the
great novelist Robertson Davies: “one of the most important things about writing is to boil
it down and not bore the hell out of everybody”. My first and foremost goal, therefore, was
brevity.
Shanty, my wife, continues to be the first motivator by providing encouragement to me
throughout the writing of the book. I extend sincere thanks to Joseph Tryble and other
members of Pearson Education for their encouragement at different stages of writing this
work. I also extend thanks to the officials of the Kerala State Higher Education Council for
their cooperation in this painstaking endeavour of creating a book on the methodology of
business education. I sincerely thank my colleagues for their cooperation and inspiration
while writing this book.
Finally, I would like to thank my two children, Tony and Teena, for all their support.
Mathew Emmanuel
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About the Author
Mathew Emmanuel received his MA (economics) and M. Phil. (economics) from the Univer-
sity of Kerala. He was awarded the first division in his M.Com. degree and has a specializa-
tion diploma in marketing management from IGNOU, New Delhi. He went on to receive a
Ph.D. from Cochin University of Science and Technology. He has also successfully completed
the Faculty Development Programme in Entrepreneurship conducted by the Entrepreneur-
ship Development Institute of India, Ahmedabad.
Currently, Dr Emmanuel is Reader and Head of the Department of Economics at
St. Xavier’s College, Vaikom, which is affiliated to the Mahatma Gandhi University at
Kottayam. He is the author of Marketing Management and the co-author of Kerala Economy,
Inclusive Growth in India, Development and Environmental Economics and Technical Education
in Kerala: Emerging Trends. He has contributed to academic journals and has participated
in the preparation of examination papers at different universities. He was also selected as
the Principal Course Designer in the Course Designing Project by the Kerala State Higher
Education Council. In addition, he has attended and presented papers in many seminars
and conferences, both at the national and international levels.
Dr Emmanuel’s areas of interest include economics, commerce, management, and
journalism. He has served as visiting faculty to the MBE programme at CUSAT, Kochi
and DIC, Kottayam for training entrepreneurs. He is also a faculty member of the Masters
programme in Commerce at IGNOU and a member of the Board of Studies for economics
at the Mahatma Gandhi University, Kottayam.
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