Tuesday, April 5, 2011

Technological Environment

Technology refers to the application of knowledge , skill, ideas to the production or improvement of goods and services.

Indicators of Technological development
1.Trends in the Science & Technology expenditure
2.Total number of technical foreign collaborations
3.Assistance by financial institutions for technological development & up-gradation
4.Total value of foreign outward remittances towards foreign technology like royalties, technical fees etc.
5.Investment in R&D infrastructure

India’s R&D expenditure – 0.8 % of GDP - $ 3.2 Bn
80 % India’s R&D expenditure is made by Government


Science & Technology Policy – 2003

1.Advancing scientific temper in the society and integrating it with all national activity
2.Strengthening mechanisms relating to technology development , its evaluation & upgrading
3.Ensuring food , agricultural , nutritional , water and energy security
4.Providing autonomy to all academic and R&D institutions
5.Promoting empowerment of women to all science & technology activities
6.Accomplishing national strategy & security strategies using technological advancement.

India’s Tech. Environment
1.Poor infrastructure for R&D
2.Low govt. Expenditure
3.Inadequate incentives
4.Low remuneration
5.Weak IP protection
6.Competition from MNC

India’s R&D Institutions & programs
Indian Council for Scientific Research ( ICSR )
Department of Science & Technology ( DST )
Indian Council for Medical Research ( ICMR )
Indian space program
Indian power program
R&D by Industry

Research Labs:
BITS, Pilani – Material science , IT, Robotics, Biotech
IISc – Bangalore – Organic,Inorganic,Physical chemistry
IIT, Kanpur – CAD/CAM , Semi-conductor

Technology Transfer
It is the sale, licensing of all forms of industrial property except trade mark
Channel of Technology Flow:
Foreign Direct Investment in Green field investment
Purely Technical Collaborations
Technical –Cum – Financial collaborations
Agencies facilitating Technology flow are:
1. Foreign Investment promotion Board ( FIPB )
2. Foreign Investment promotion Council ( FIPC )
3. Investment promotion & Infrastructure Development Cell ( IP&ID)
4. Secretariat for Industrial Assistance ( SIA )
5. RBI

Based on the type of collaboration approval will be given by:
1.RBI’s Automatic Route
2.SIA / FIPB Route

Technology Transfer

Methods of Technology Transfer:
Training or employment of technical experts
Supply of components , machinery etc.
Licensing agreement
Design transfer
Turn-key project - Build , transfer as per MOU

Social Environment

Social environment refers to the nature of social organisation and development of social institutions like Caste, Religion, customs , and socio-economic factors like Class structure, Social mobility , women employment etc.

Impact of Social environment on Business:

Caste – Competitive trading , Weaving , Metal , finance communities
Religion – Prohibition on Pork & Meat , Islamic finance
Customs – Women employment, restriction on overseas employment
Class Structure - Upper , Middle , Manual class
Social mobility – Middle to upper , Manual to Middle etc.
Poverty – Low purchasing power
Education – Availability of Skill & its cost.
Health – Long life – more allocation to senior citizens availability of knowledge.

Social Indicators :
1. Longevity & Health
2. Education
3. Standard of Living

Social responsibility of Business:

Business is affected by society and vice-versa. Society includes Internal & External segments.
Internal segment - owners & employees.
External segment – competitors , customers, suppliers , Government , Local community. No business can be in conflict with any of these segments. Hence the business has to take care of societal interets.

Responsibility to Owners :
Protect capital , provide fair return to owners , ensure longevity of business , Transparency in the operation of business

Responsibility to Employees :
Employees are key recourses of business. Hence fair compensation , welfare,trining, development have to be provided

Responsibility to Consumers :
Consumers are the foundation of business. A dissatisfied customer is a warning signal to business. The business has to ensure the following rights of customers :
1. Right to safety – Provide safe products
2. Right to product knowledge & Education – Provide through advertisements
3. Right to product choice – Avoid monopoly
4. Right to full value – Ensure product utility & performance as advertised
5. Right to justice – Through Consumer Protection Act

Responsibility to Suppliers :
A good relation with suppliers is essential for quality & continuous supply of raw materials & other inputs for continuous production. Responsible business avoid the following :
1. Unfair Practices – Break contract, Delay payment, take advantage of loopholes

Responsibility to Competitors :
To engage in healthy competition , the good business strategies & practices of competitors should be learned & should not engage in the following:
1. Competitors brand assassination
2. Restrictive trade practices – Price discrimination , tie-up sale, exclusive dealership
3. Unfair trade practices- misleading advertisement, tricky prices , unreasonable product guarantee.

Responsibility to Government :

Responsible companies are good corporate citizens. They contribute to the development of industry and economy. These responsibilities include:
1. Pay taxes
2. Provide data
3. Implement government schemes
4. Give preference to government companies
These companies find easier to obtain license, credit from public and supply order from government.

Responsibility to Local community :
Local support is important . The local population suffers due to companies such as water, land,polution. Hence companies should compensate indirectly by providing infrastructure, education, forestation etc.

Environmental Cost Audit
It is the method to understand & evaluate
1. How the environment is affected by companies operation
2. What are the losses both in terms of money and resources that is getting affected by the companies operation
3. How company can contribute to mitigate the loss to society and
4. To assess the performance of organisations with respect to its social responsibility.
This is done through reporting of various responsibilities undertaken by organisations. The reporting is done on various factors viz.
1. Social factors
2. Ecological factors
3. Geographical factors
4. Natural calamities

Social factors:
a. Consumer care
Labeling Quality , quantity, price etc.
b. Environmental care
Upkeep waste, disposal , noise, etc
C. Society care
Contribution to education , health etc
d. Community care
Providing water , road , power , job etc

Ecological factors:
a. Natural resources
Forestation , etc.
b. Soil & Land
Soil conservation, recycle products etc.
C. Plant & Animal
Forestation , relocating animals etc
d. Forest
Forestation , alternate Raw material , Carbon credit etc.

Geographical factors:
a. Resource Endowment
Use resources judiciously & Increase export
b. Weather & Climate factors
Minimize water contamination , air pollution , Global warming

Natural Hazards:
The companies should support government & people in the event of Earthquakes and Cyclones etc.