Business Environment market reform


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Business Environment market reform

  1. 1. BUSINESS ENVIRONMENT 1. DISCUSS THE REFORM THAT HAS BEEN TAKEN PLACE IN INDIAN CAPITAL MARKET? The Indian capital market has witnessed major reforms in the decade of 1990s and thereafter. It is on the verge of the growth. Thus, the Government of India and SEBI has taken a number of measures in order to improve the working of the Indian stock exchanges and to make it more progressive and vibrant. Reforms in Capital Market of India The major reforms undertaken in capital market of India includes:-1. Establishment of SEBIThe Securities and Exchange Board of India (SEBI) was established in 1988. It got a legal statusin 1992. SEBI was primarily set up to regulate the activities of the merchant banks, to control theoperations of mutual funds, to work as a promoter of the stock exchange activities and to act as aregulatory authority of new issue activities of companies. The SEBI was set up with thefundamental objective, "to protect the interest of investors in securities market and for mattersconnected therewith or incidental thereto." The main functions of SEBI are:- i. To regulate the business of the stock market and other securities market. MILAN PADARIYA ( PHARMA MBA) Page 1
  2. 2. BUSINESS ENVIRONMENT ii. To promote and regulate the self-regulatory organizations.iii. To prohibit fraudulent and unfair trade practices in securities market.iv. To promote awareness among investors and training of intermediaries about safety of market. v. To prohibit insider trading in securities To regulate huge acquisition of shares and takeover of companies. SEBI BHAVAN, MUMBAI2. Establishment of Creditors Rating AgenciesThree creditors rating agencies viz. The Credit Rating Information Services of India Limited(CRISIL - 1988), the Investment Information and Credit Rating Agency of India Limited (ICRA -1991) and Credit Analysis and Research Limited (CARE) were set up in order to assess thefinancial health of different financial institutions and agencies related to the stock marketactivities. It is a guide for the investors also in evaluating the risk of their investments. MILAN PADARIYA ( PHARMA MBA) Page 2
  3. 3. BUSINESS ENVIRONMENT3. Increasing of Merchant Banking ActivitiesMany Indian and foreigncommercial banks have set up their merchant banking divisions in the lastfew years. These divisions provide financial services such as underwriting facilities,issue organising, consultancy services, etc. It has proved as a helping hand to factors related to thecapital market.4. Candid Performance of Indian EconomyIn the last few years, Indian economy is growing at a good speed. It has attracted a huge inflow ofForeign Institutional Investments (FII). The massive entry of FIIs in the Indian capital market hasgiven good appreciation for the Indian investors in recent times. Similarly many new companiesare emerging on the horizon of the Indian capital market to raise capital for their expansions.5. Rising Electronic TransactionsDue to technological development in the last few years. The physical transaction with more paperwork is reduced. Now paperless transactions are increasing at a rapid rate. It saves money, timeand energy of investors. Thus it has made investing safer and hassle free encouraging more peopleto join the capital market.6. Growing Mutual Fund Industry The growing of mutual funds in India has certainly helped the capital market to grow. Publicsector banks, foreign banks, financial institutions and joint mutual funds between the Indian andforeign firms have launched many new funds. A big diversification in terms of schemes, maturity,etc. has taken place in mutual funds in India. It has given a wide choice for the common investorsto enter the capital market.7. Growing Stock ExchangesThe numbers of various Stock Exchanges in India are increasing. Initially the BSE was the mainexchange, but now after the setting up of the NSE and the OTCEI, stock exchanges have spreadacross the country. Recently a new Inter-connected Stock Exchange of India has joined theexisting stock exchanges.8. Investors ProtectionUnder the purview of the SEBI the Central Government of India has set up the InvestorsEducation and Protection Fund (IEPF) in 2001. It works in educating and guiding investors. Ittries to protect the interest of the small investors from frauds and malpractices in the capitalmarket. MILAN PADARIYA ( PHARMA MBA) Page 3
  4. 4. BUSINESS ENVIRONMENT9. Growth of Derivative TransactionsSince June 2000, the NSE has introduced the derivatives trading in the equities. In November2001 it also introduced the future and options transactions. These innovative products have givenvariety for the investment leading to the expansion of the capital market.10. Insurance Sector ReformsIndian insurance sector has also witnessed massive reforms in last few years. The InsuranceRegulatory and Development Authority (IRDA) was set up in 2000. It paved the entry of theprivate insurance firms in India. As many insurance companies invest their money in the capitalmarket, it has expanded.11. Commodity TradingAlong with the trading of ordinary securities, the trading in commodities is also recentlyencouraged. The Multi Commodity Exchange (MCX) is set up. The volume of such transactions isgrowing at a splendid rate.Apart from these reforms the setting up of Clearing Corporation of India Limited (CCIL), VentureFunds, etc., have resulted into the tremendous growth of Indian capital market.SEBI vide its press release PR No.59/2010 dated March 6, 2010 has announced the decisions ofthe board meeting of SEBI held on the same day. The following is an analysis of the above saiddecisions.Reforms in Derivatives Market(1) Equity derivatives contracts with tenures upto 5 years:Earlier in January, 2008 SEBI had introduced long term options on Sensex and Nifty with tenuresof upto 3 years. Now SEBI has in principle permitted stock exchnages to introduce equityderivatives contracts with tenures upto 5 years. MILAN PADARIYA ( PHARMA MBA) Page 4
  5. 5. BUSINESS ENVIRONMENT(2) Derivative contracts on volatility indexes which have suitable track record:Earlier in January 2008, SEBI has permitted stock exchanges to adopt any of the volatility indexcomputation modelsavailable globally or develop their own model for computation of VolatilityIndex. SEBI has now in principle permitted the introduction of derivative contracts on volatilityindexes like the Volatility Index (VIX India) of NSE.(3) Physical settlement of equity derivatives:SEBI also has decided to allow physical settlement of equity derivatives.REFERENCES MILAN PADARIYA ( PHARMA MBA) Page 5
  6. 6. BUSINESS ENVIRONMENT2. WRITE SHORT NOTE ON SOCIAL AUDIT OF BUSINESSINTRODUCTIONThe term ‗social audit‘ may be interpreted in several ways. As far as common understandinggoes, it is an essential assessment of how well a company has discharged its social obligations.However experts see it as a systematic and comprehensive evaluation of an organization‘s ‗socialperformance‘ which is interpreted as organizational efforts in enriching the general welfare ofthe whole community and the whole society. The need for social audit arises because of variousreasons. In order to reach the objective of enriching economic wealth for the shareholders, thefirm do it at the cost of social and environmental disorder. And since many would not take intoaccount the social costs of such negative implications, their prices do not reflect the real cost.The organizations do it more because of competitive reasons. However if the larger interest ofsociety is to be preserved, there has to be some consideration for social good.The company is expected to behave and function as a socially responsible member of the societylike any other individual. It cannot shun moral values nor can it ignore actual compulsions. Thereis a need for some form of accountability on part of the management which is not only limited toshareholder alone. In modern times, the objective of business has to be the proper utilization ofresources for the benefit of others. A profit may still be a necessary part of the total picture but itsould not be the only purpose. The company must accept its obligation to be socially responsibleand to work for the larger benefit of the community.SCOPE AND OBJECTIVESSocial audit tries to make the traditional economic and technical values as two subsystemswithin the larger social system. Social audit primarily tries to cover thefollowing areas: 1. Ethical Issues: They offer a basis for determining what is right and what is wrong in terms of a given situation. Ethics is best understood when we cite examples relating to unethical conduct. Few such examples can be price discrimination, unfair trade practices, cheating customers, pirating employees‘ ideas, leaving the job without observing job contract. 2. Equal opportunity: A second relevant social issue which comes under social audit is the equity of treatment in employment and a fair justice system in the organization. Employment decisions in anMILAN PADARIYA ( PHARMA MBA) Page 6
  7. 7. BUSINESS ENVIRONMENT organization should be based on merit and ability and not on the basis of arbitrary quotas based on gender, race or religion. 3. Quality of Work Life: Besides demands for safe, healthy and human work environment people are seeking greater meaning in their lives. Greater responsibility, growth, freedom and flexibility, fair reward system are few things which employees have preference for. There is also a growing demand for employee assistance programmes keeping in mind the present day stressful situations they are exposed to. 4. Consumerism: Business has a special obligation towards the consumer as the business exists to serve and satisfy the needs of the consumers. It is the principal duty of business to make available to the consumer items of daily needs in the right quantity at a right time, price and of the right quality. However many Indian products are not safe at all and the consumers suffer at hands of corrupt, and dishonest corporate houses. 5. Environmental Protection: Growing water, air and environmental pollution by various industries in recent times has led to a public outcry demanding ‗environmental protection‘ at any cost. SOCIAL AUDIT CYCLEMILAN PADARIYA ( PHARMA MBA) Page 7
  8. 8. BUSINESS ENVIRONMENTTYPES OF SOCIAL AUDITThe various types of social audit may be listed as below:Social Process AuditIt tries to measure the effectiveness of those activities of the organization which are largely takenup to meet certain social objectives. Corporate executives in this case try to examine what theyare doing and how they are doing. The method involves four steps:i) Find circumstances leading to the starting of the social audit programmeii) List out goals of the social programmeiii) State how the organization is going to meet such goalsiv) Qualitatively evaluate what is actually done as against what has been plannedFinancial Statements Format Social AuditIn this type, financial statements show conventional financial information plus informationregarding social activities. About associates a management consultancy firm proposed that thebalance sheet should show a list of social assets on one side and social commitments, liabilitiesand equity on other side. The income statement should reveal social benefits , social costs andthe net social income provided by the company operations to the staff community, generalpublic and clients. This approach has been criticized as many feel that it may create confusion ofcomplicating issues further and defying easy understanding.Macro-Micro Social Indicator AuditThis type of audit requires evaluation of a company‘s performance in terms of social measures (micro indicators) against macro social measures. The macro social factors include the socialgoals expected by society in terms of health, safety, education, housing, accidents, pollutioncontrol measures, etc. The micro social indicators are measures of the performance of thecompany in those areas measured by macro social indicators.One of the important problems with this approach is the non-availability of reliable macro socialindicators. Does an increase in family planning clinics indicate better medical facilities? Furtherit is not easy to specify whether the individual actions initiated by a company have actuallyimproved the quality of life of a community, such individual actions may ultimately be labeled asirrelevant , insignificant and sometimes , even unnecessary. In any case this approach helps allcompanies to evaluate their contributions in improving social life on a rational basis.MILAN PADARIYA ( PHARMA MBA) Page 8
  9. 9. BUSINESS ENVIRONMENTSocial Performance AuditIn developed countries, several interests groups including church groups, universities, mutualfunds, consumer activists regularly measure, evaluate and rank socially responsive companies onthe basis of their social performance. Regular opinion polls are carried out to find companiesthat initiate social efforts in a proactive manner and earn the goodwill of the general public.Partial Social AuditIn this case, the company undertakes to measure a specific aspect of its social performance ( e.g.environment, energy, human resources) because it considers that aspect to be very important orbecause its social efforts for the time being are confined to the area:Environmental AuditIn developed countries people protest violently if the companies try to pollute the environmentand the companies not only comply with regulations but also proactively explore opportunitiesto recycle wastes into useful products. An internal group constituted by the unit concernedprepares a report about the way the environmental issues of importance are being taken care of.This report is generally re-examined by an outside auditor to see whether air/ water pollutionmeasures, release of toxic wastes, safety regulations have been complied with or not.Energy AuditTo conserve energy sources, energy audits are undertaken to investigate how energy is obtained,consumed and preserved.Human Resource Accounting (HRA)The basic philosophy of HRA is that human resources are assets and that the investment inacquiring, training, and developing these resources should be accounted for as an asset.Conventional accounting methods write off investments in human capabilities and values asoperating expenses and thereby understate the profit. The current value of a company‘s humanassets is not considered while computing expenses/revenues and, as a result, the balance sheetdoes not portray the true and fair picture of the company‘s state of affairs.Comprehensive AuditIt tries to measure, verify and evaluate the total performance of the organization including itssocial responsibility activities. It focuses mainly on management systems rather than on theactions or events which are not so important. It aims at evaluating the quality of processes andthe information on which organizational decisions are taken.MILAN PADARIYA ( PHARMA MBA) Page 9
  10. 10. BUSINESS ENVIRONMENT RELATIONSHIP BETWEEN AUDIT LENS AND STAKEHOLDER GROUPDIFFICULTIES IN SOCIAL AUDITSocial audit presents numerous problems; its scope cannot be determined precisely. If we go forlisting all activities undertaken by an organization, say in an accounting year it may be difficultto find out which activities are to be treated as ‗ social‘ and which not. After all most of theactivities of a company may have some sort of social relevance somewhere or the other. Toavoid this if we take only those activities that have tangible social advantage, the ‗scope of socialaudit‘ is severely constrained. The requirements of various groups such as employees,customers, shareholders, general public, government, etc. may not be accurately and readilyconvertible into ‗social rhetoric‘ always. Another serious problem as explained previously iswith regard to the ‗determination of yardsticks‘ for measuring the cost and accomplishment ofactivities shown in the social audit.REFERENCES PADARIYA ( PHARMA MBA) Page 10
  11. 11. BUSINESS ENVIRONMENT3. WHAT IS CONSUMERISM? DISCUSS THE DEVELOPMENT OF CONSUMERISMIN INDIA WITH ITS BENEFITS.DEFINITIONConsumerism is a social and economic order that encourages the purchase of goods and servicesin ever-greater amounts. The term is often associated with criticisms of consumption startingwith Thorstein Veblen. Veblens subject of examination, the newly emergent middle class arisingat the turn of the twentieth century, comes to full fruition by the end of the twentieth centurythrough the process of globalization.CONSUMERISM IN INDIAIndias large youth population is driving the consumerism trend in the country. For the youthshopping is just not a necessity but a leisure activity. Also more disposable income and morenumber of persons working in families have also contributed to this trend. The good news is thatIndian consumerism is yet to attain maturity. But the catch here is society has a whole believes insaving rather than spending. A liberalized economy has open doors to MNCs, and all the companies have successfullyadapted their products or their marketing communication or in some cases both to the localconditions and preferences. Like Mac-Donalds, Pizza- Hut, Maggi - the noodles tastes differentin every country. I had the pleasure to have Maggi noodles of different regions; I must tell you itdoes taste different. Organized retail formats have also contributed to the spending spree in the country. One myth isthat Indian consumers are price sensitive. It is partly true, yet it is fast changing. FMCGs orfashion brands have all above average pricing, but in spite of this, these companies have gainedprofit from operations in the sub-continent. We need value for money and this is misinterpretedquite a few times. But certain conditions such as high inflation which is prevalent here rightnow, hinders the new found consumerism confidence.Well thinking global and acting locally works very well here. The Bharatiya or the Indianness iscrucial to the people and this is precisely what companies are cashing in on. One needs to seehow this strategy would work in the future as the socio- economic scenario is fast changing herein India.MILAN PADARIYA ( PHARMA MBA) Page 11
  12. 12. BUSINESS ENVIRONMENTChanging Lifestyles – Consumerism in IndiaTwenty years ago, urban India‘s lifestyles and buying trends were a far cry from what we seetoday. With limited choices, consumers purchased commodities from the few brands available.In 1991 India threw her doors open to international trade, and the situation changed dramaticallyand so did consumerism in India. Today, consumers are spoilt for choice and fully acknowledgethat they rule the market. Manufacturers cater to their whims and give the consumer completecontrol of market trends.Despite India having a low per capita income, it still remains a lucrative market, even for costlyproducts. One reason is India‘s large population. A sizable section of the country‘s citizens formsthe working population. As foreign trade grew, it opened up numerous jobs opportunities andgave the bulk of the working population significant spending power. This group generallybelieve in working hard and spending luxuriously, and are responsible for the current boom inconsumerism.In general, Indian consumers have a high degree of value orientation and thus brands need tostrategically price their products to gain a foothold in India. Also the Indian consumer tends toassociate himself with products that communicate the message of family values, traditions, careand affection. These nuances set India apart from other developing nations. Companies areforced to considerably tailor their products to suit the local market and meet the requirements ofconsumerism in India.MILAN PADARIYA ( PHARMA MBA) Page 12
  13. 13. BUSINESS ENVIRONMENTDEVELOPMENT OF CONSUMERISM IN INDIAFirst, consumer luxuries have got democratised during this decade. Products that wereconsidered for a few started to reach larger and larger masses of consumers — from colas toshampoos to readywear to mobile to airlines. Categories that started in the 90s began to expandtheir footprint and became a part of mass life. Consumption and consumerism reached morepeople than it did in the 90s. Social inequity continues to be part of India‘s economic, but thecapitalistic principle that ―open up from the top to a few, and the benefits will flow down tomany‖ has come true. Consumerism is truly mass!Along with this, has come a culture of upgrade and step movement rather than lifetimeownership and gradual movement. I think technology, mobile handsets in particular, madeconsumers get used to constant change — buying a new product even when the old one was―functional‖, thus breaking the barrier of the ―replace when it‘s broke‖ mindset. And then thisextended to other categories in life — from clothes to televisions to homes. Every Indian marketpresents an opportunity to marketers to get consumers to move up. As technology improves andconsumers‘ disposable income increases, the willingness and propensity of consumers to makeleaps from unbranded to branded and pay significant premia is also increasing. There is nolonger “lifetime ownership”, but “lifetime consumer value’!MILAN PADARIYA ( PHARMA MBA) Page 13
  14. 14. BUSINESS ENVIRONMENT DEVELOPMENT OF CONSUMERISMThird, there has been a shift from product to services and experiences. And this is takingplace across categories. Coffee has become Cafes, beauty products are transiting into Parloursand this is going into small towns too with local ―aunties‖ sensing business opportunitiesopening parlours and beauty counselling centres at home — and home videos have becomemultiplexes. And in every case, it provides marketers an opportunity to extract more value.Pros:It is convenient, people can get what they need without any hassleIt boosts non- service based economies greatlyIt creates jobs It promotes innovationConsumerism makes aware to the society regarding rights and responsibilities of consumersConsumers protection acts and can regulate consumption in a proper way, can control economyfor the consumers welfare.MILAN PADARIYA ( PHARMA MBA) Page 14
  15. 15. BUSINESS ENVIRONMENTCons:People become overly dependent on itThe manufacturing of consumer goods is a strain on the environmentREFERENCES PADARIYA ( PHARMA MBA) Page 15
  16. 16. BUSINESS ENVIRONMENT4. WHAT IS SUSTAINABLE DEVELOPMENT?DISCUSS THE ROLE OF INDIAN GOVERNMENT TO IMPACT SUSTAINABLEDEVELOPMENT ARE BE A PAR SOME OTHER COUNTRIES GOVERNMENTROLES REGARDING SUSTAINABLE DEVELOPMENT.SUSTAINABLE DEVELOPMENT (SD)It is a pattern of growth in which resource use aims to meet human needs while preservingthe environment so that these needs can be met not only in the present, but also for generations tocome (sometimes taught as ELF-Environment, Local people, Future). The term sustainabledevelopment was used by the Brundtland Commission which coined what has become the mostoften-quoted definition of sustainable development as development that "meets the needs of thepresent without compromising the ability of future generations to meet their own needs."[1][2]Sustainable development ties together concern for the carrying capacity of natural systems withthe social challenges facing humanity. As early as the 1970s "sustainability" was employed todescribe an economy "in equilibrium with basic ecological support systems."[3] Ecologists havepointed to The Limits to Growth,[4] and presented the alternative of a "steady state economy"[5] inorder to address environmental concerns.The field of sustainable development can be conceptually broken into three constituentparts: environmental sustainability, economic sustainability and sociopolitical sustainability.MILAN PADARIYA ( PHARMA MBA) Page 16
  17. 17. BUSINESS ENVIRONMENTDEFINITIONIn 1987, the United Nations released the Brundtland Report, which included what is now one ofthe most widely recognised definitions:"Sustainable development is development that meets the needs of the present withoutcompromising the ability of future generations to meet their own needs."It contains within it two key concepts: the concept of needs, in particular the essential needs of the worlds poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environments ability to meet present and future needs."‗Sustainability‘ is a semantic modification, extension and transfer of the term ‗sustained yield‘.This had been the doctrine and, indeed, the ‗holy grail‘ of foresters all over the world for more orless two centuries. The essence of ‗sustained yield forestry‘ was described for example byWilliam A. Duerr, a leading American expert on forestry: ―To fulfill our obligations to ourdescendents and to stabilize our communities, each generation should sustain its resources at ahigh level and hand them along undiminished. The sustained yield of timber is an aspect ofman‘s most fundamental need: to sustain life itself.‖Environmental SustainabilityEnvironmental sustainability is the process of making sure current processes of interaction withthe environment are pursued with the idea of keeping the environment as pristine as naturallypossible based on ideal-seeking behavior.An "unsustainable situation" occurs when natural capital (the sum total of natures resources) isused up faster than it can be replenished. Sustainabilityrequires that human activity only usesnatures resources at a rate at which they can be replenished naturally. Inherently the concept ofsustainable development is intertwined with the concept of carrying capacity. Theoretically, thelong-term result of environmental degradation is the inability to sustain human life. Suchdegradation on a global scale could imply extinction for humanity.MILAN PADARIYA ( PHARMA MBA) Page 17
  18. 18. BUSINESS ENVIRONMENTConsumption of renewable resources State of environment SustainabilityMore than natures ability to replenish Environmental degradation Not sustainableEqual to natures ability to replenish Environmental equilibrium Steady state economyLess than natures ability to replenish Environmental renewal Environmentally sustainableSustainable Development in India - How and Why?After independence several development efforts in India created a lot of mess with misguidedpolicies. The immediate task in front of us is it to clean up this mess. We have 50 crores ofpeople living in rural areas excluding rich-to do households. These people live in mainly rain-fedareas. The resources are limited for these people. From a population of 100 crores 70% of arepoor. Majority of the lands owned by them are categorized as wastelands where yields are about0.5 to 1 ton of grain per hectare Forests and pastures have been highly degraded, and the top soilhas been eroded or deprived of nutrients. Usually one crop per year (with poor yield) iscultivated in these areas due to inadequate irrigation facilities. On the whole, the present naturalresource endowment in this region appears quite bleak. Even though we talk about privatization,there is no real investment in agriculture, especially in these rain-fed areas that are outside themuch hyped "Green Revolution" areas. That is why the theme of this talk is "turning the presentcrisis to an opportunity." In fact, by the combination of a scientific and participatory approach toland improvement and micro-watershed management a sufficiently large bio-mass surplus can beachieved in these areas. In fact it is possible to generate bio-mass surplus in the form of woodand process-able material of 2 T/Household/Year.The basis of industrialization is energy. We need to identify the energy needs based on "end-use." This is the departure from Western calculations of energy needs. The main departure is wemust look at energy in the following areas:  Materials: Steel, metals etc.  Synthetic Polymers: PVC, polyethylene, adhesives etc.  Liquid fuels  CementIn developed countries, energy needs are looked as the availability of "gas and/or gasoline" andelectricity.There can be a major leap in rural infrastructure (villages & small towns), economy andlivelihoods if 5T of coal-equivalent energy supply is available per family per year. We currentlyMILAN PADARIYA ( PHARMA MBA) Page 18
  19. 19. BUSINESS ENVIRONMENTmake available only 0.5-1 ton. However, there is capacity to provide this level of energy with50% from solar and other 50% from materials such as bamboo, small timber chemicalintermediates from plants (such as non-edible oils, phenols, starch, ethanol) etc. So far we havebeen neglecting solar energy. Currently, from the point of end-use, 40% of energy from coal is inthe form of steam (or heat). Steam can also be produced at low-cost by solar-thermal systems.An overhead of a low-cost, high-performance solar thermal equipment, fabricated at Bhusawal(Maharashtra) was shown.The 10 square-meter concentrator has a modular design with regular-size flat glass mirrors,supported by a steel truss to give the overall shape of a paraboloid concentrator. The receiver,located at the focus of the concentrator, is an aluminum cage (about the size of a trashcan) withtubes running around it (for transferring heat to the working medium----oil or steam). The entirestructure has been designed to withstand very high gusts of winds. The present cost of the system(including the tracking drive) is Rs. 7500 per square meter. The amount of heat delivered by theunit over a period of 8 hours is roughly 1 kg coal-equivalent (about 3500 kcal in the case of high-ash content coal) per square-meter of the concentrator. If the size of the concentrator isincreased, engineered wood-bamboo composites can replace the steel frame with a drasticreduction in the cost.We now have the capability to train an engineering diploma holder to fabricate these units in asmall garage with no expensive equipment.Note: To increase the capacity of process-able materials for energy to 2.5 tons per household,we need to shift the use of glass in Indian situations from conspicuous use to regenerate-ableform of energy. Maybe we need to have a policy of taxing the consumptive/conspicuous users.Bamboo as a material for infrastructureIn Andhra Pradesh a large arched-roof community-hall type structure using engineered bambooelements was built three years ago taking the local conditions as part of the design (overheadshown with the structure). In fact this structure, while built as a cyclone resistant structure,turned out to be the optimal design after exhaustive CAD studies.Another example is in the case of village/small-town roads, where bamboo-grid reinforcement ofthe road base, (along with natural or synthetic fabric under layer for preventing water entry frombelow & sides) has enabled the construction of very durable roads (overhead shown).A side note: There are instances in China, where bamboo used for some applications havesurvived 2000 years. The point is that preservation treatment of bamboo is not a major issue,particularly so with modern techniques. We glorify traditional knowledge only because timetested lessons are the only ones remain for us to glorify from traditions and they deserve to bestudied as sources of knowledge.Using modern knowledge of structural engineering, and the inherently superior properties ofbamboo, engineered wood-bamboo composite structural members with innovative joiningMILAN PADARIYA ( PHARMA MBA) Page 19
  20. 20. BUSINESS ENVIRONMENTtechniques have been designed which are as strong and durable as reinforced cement columnsand beams (overhead shown). Of course, these do need skilled labor. But, then local artisans canbe trained in rural areas, leading to rapid increase in livelihood opportunities and the capacity tobuild excellent rural infrastructure at very low cost.The main point is that we need to look at the approaches of using traditional resources to meetour energy needs. Fortunately, there is a small but important segment of people who do want tolook at eco-friendly resources for alternate energy needs. The question to ask is "if we can notprovide something do we have the right to use it?" The science has given us the ability to makeotherwise worthless material into valuable products. (e.g. silicon for computer chips, opticalcables in stead of copper as medium). After all, all mining activity basically involves convertingmud or rocks into materials to which we attach greater value. If we can use modern knowledgeproperly, half of the energy needs of deprived rural areas and small towns can come from solar-thermal energy, while the other half can come from in the form of high-value materials andchemical intermediates from biomass. But to achieve this we need a different world-view. Weneed to look at the concept of producers & users (or consumers). These are all part of the sameglobal system. Ultimately, economics is all about value-addition, whether the value-addition is inthe form of primary production (agriculture, fishery, forestry), manufacturing, services or thearts. However,"ADDING VALUE WITHOUT A VALUE SYSTEM IS NOT SOCIALLY ORECOLOGICALLY DESIRABLE"How do you plan to reform current education system in India with alternate energyemphasis?We need to have programs such as "education at work place" and options such as OpenUniversity. In fact if we have a life-time partnership between producers and students with realworld experience, we can hope to train students better equipped to handle these activities.Are there structural studies done for bamboo?Yes. In fact there are many studies including computations of Youngs Modulus, specific gravityetc. done and classification and categorization work is also being done. It is indeed possible andbeing done in terms of modeling and analyzing bamboo as a building material. We are rapidlymoving towards development of quality standards for engineered bamboo at levels required forISO certification.Consider the following scenario being looked at currently:Suppose we have 20 students per teacher, with 10 teachers helping out 20 days per year. Theyare given 1000 Rs.. Then there will be a post graduate student working in one village first yearand expand to three villages next year. In one district we want to select two areas of 5000hectares each and create a network of the above mentioned set up and encourage the concept ofopen learning. A possible scenario is a practicing ITI student with real world experience canMILAN PADARIYA ( PHARMA MBA) Page 20
  21. 21. BUSINESS ENVIRONMENTchallenge an academic IITian equipped with no practical knowledge. That will be the ultimateachievement of bringing users and producers together in the education system.Activity 1. Forest Village: Produce primary products i.e. bio-mass, wind and hydro energy, avoid unproductive water losses and erosion. 2. Forest fringe settlement: Processing of bio-mass & local mineral to produce intermediate products. 3. Village Producers: Grain pulses etc. for food security. 4. Small Town & Rural neighbors: Fabricate equipment & produce material required for infrastructure and energy sector to serve entire population. 5. Urban fringe settlement: With Internet connectivity & market opportunity, we can convert intermediate products according to consumer demand. 6. Metropolitan cities & large energy intensive industry: These can become major demand centers.The consequences of this activity are: 1. Reducing distance between produce and consumers, thereby reducing prices, creating more livelihood opportunities in rural areas, and enabling better governance & conflict resolution through convergent community action. 2. Income generation in dispersed town so that common people benefit from reduced cost of land and infrastructure. 3. Overall reduction in transmission and transport cost as well as associated losses. 4. Reduction in transactional cost (removing middlemen from the picture).System Management and PolicySystem management can be improved by setting up service enterprises for energy generation anddistribution. A joint sector leasing and financing company with participation of the staterenewable energy development agencies, private enterprises, professionals, user groups andcooperatives of artisans is an attractive prospect. This will help to separate the ownership andservice functions. A pre-requisite of success is social acceptability of a two part tariff systemwhere basic service will be provided at affordable price by availing of existing generation ofdistribution facilities and concession for development of renewable energy sources.Changes are necessary in the land and water use and allocation policy. A bio-mass strategy mustbe implemented to raise the bio-mass production by use of funds currently available forwasteland development with a condition to create and sustain bio-mass pools. Entitlement of thebio-mass to the poor from the local and regional bio-mass pools would make it possible torecover the cost of energy services in the form of bio-mass.High value bio-mass products, inputs for liquid fuel and chemical intermediate production: 1. Starch from various tubers including tapioca (or cassava), sweet potatoMILAN PADARIYA ( PHARMA MBA) Page 21
  22. 22. BUSINESS ENVIRONMENT 2. Sugary juices from sweet sorghum, sugarcane and palms 3. Various non-edible oils essentially as energy or chemical intermediates from Jatropha 4. Valuable non-edible oils with preservative and pesticides value such as neem, Karanj 5. Latex including Jatropha 6. Acrylic resins from latex yielding dryland species 7. Phenols (for making phenolic resins used as adhesives in various industries) including cashew nut shell and Bhilava nut (Bibba). 8. Tannin from bark of Harda etc.The above list does not include items which have very specific uses and therefore difficult tomarket such as medicinal herbs, and consumer products such as perfumes, essential oils, flowerswith hazard of market saturation.Note: A hand out distributed includes tables for Ethanol yields of various crops based on averageyields in Brazil, Types of raw materials potentially useful for microbial conversion to fuels,Energy analysis of ethanol production from various crop substrates.Sustainable development in India encompasses a variety of development schemes in social,cleantech (clean energy, clean water and sustainable agriculture) and human resources segments,having caught the attention of both Central and State governments and also public and privatesectors.In fact, India is expected to begin the greening of its national income accounting, makingdepletion in natural resources wealth a key component in its measurement of gross domesticproduct (GDP).Indias sustained efforts towards reducing greenhouse gases (GHG) will ensure that the countrysper capita emission of GHG will continue to be low until 2030-31, and it is estimated that the percapita emission in 2031 will be lower than per capita global emission of GHG in 2005, accordingto a new study. Even in 2031, Indias per capita GHG emissions would stay under four tonnes ofCO2, which is lower than the global per capita emission of 4.22 tonnes of CO2 in 2005.Major Achievements 1. The number of carbon credits issued for emission reduction projects in India is set to triple to 246 million by December 2012 from 72 million in November 2009, according to a CRISIL Research study. 2. This will cement Indias second position in the global carbon credits market (technically called Certified Emission Reduction units or CERs). The growth in CER issuance will be driven by capacity additions in the renewable energy sector and by the eligibility of more renewable energy projects to issue CERs. Consequently, the share of renewable energy projects in Indian CERs will increase to 31 per cent. 3. CRISIL Research expects Indias renewable energy capacity to increase to 20,000 megawatt (MW) by December 2012, from the current 15,542 MW.MILAN PADARIYA ( PHARMA MBA) Page 22
  23. 23. BUSINESS ENVIRONMENT 4. The contribution of renewable energy to the power business in India has now reached 70 per cent, compared to 10 per cent in 2000, in terms of project numbers and dollar value, according to Anita George, Regional Industry Director, Asia Infrastructure and Natural Resources, International Finance Corporation (IFC). 5. Growth in use of green technologies has put India on the green-building leader board with countries such as the US. "About 2-3 per cent of all construction in India is green, as good as (in) the US. In the next two or three years, we want to bring it up to 10 per cent, which will put us on top," as per the Indian Green Building Council (IGBC). 6. The US$ 1.79 billion Indian lighting market is estimated to be growing at 18 per cent annually and switching rapidly to energy-efficient systems. In value terms, about US$ 425.58 million of the current market size belongs to the compact fluorescent lamp (CFL), according to Electrical Lamp and Component Manufacturers Association of India (ELCOMA) statistics. 7. On the back of the incentive package for electric vehicles announced by the Ministry of New and Renewable Energy, average monthly sales of electric two-wheelers has risen 20 per cent, according to Sohinder Gill, Director, Society of Manufacturers of Electric Vehicles. 8. Backing the ‗polluter must pay‘ principle to deal with the issue of residual pollution, Prime Minister Dr Manmohan Singh has endorsed proper enforcement of regulatory standards to prevent green damage. He also inaugurated the Delhi Sustainable Development Summit (DSDS), organised by The Energy and Resource Institute (TERI), on February 3, 2011. 9. National Aluminium Company Limited (NALCO), the Navratna PSU, under the Union Ministry of Mines, Govt. of India, has become the first PSU in the country by implementing a pilot-cum-demonstration project on Carbon Sequestration in its captive power plant at Angul. The project is expected to go a long way towards addressing the issue of bringing down GHG, a NALCO spokesperson said. 10. Currently, India has 18,655 MW of installed renewable energy, accounting for a total of 11 per cent of the total capacity of 168,954 MW. The target includes adding 20,000 MW of solar energy by 2022, which would take the share of renewable energy in the total electricity generation capacity of the country to 15 per cent, said Dr Arun Tripathi, a director and a scientist at the ministry. He added that the Indian governments goal is that renewable energy should account for 30 per cent share of the total electricity capacity by 2032.Investments - India expects investments to the tune of US$ 55 billion by 2015 in the renewable energy sector which is expected to produce 35 giga watt (GW) of power, according to MrMILAN PADARIYA ( PHARMA MBA) Page 23
  24. 24. BUSINESS ENVIRONMENT Debashish Majumdar, Chairman and Managing Director, Indian Renewable Energy Development Agency Ltd (IREDA). - According to a recent study on India attractiveness survey by Ernst & Young, Foreign Direct Investment (FDI) in Renewable Energy in India witnessed a 105 per cent rise. Wind energy is the fastest growing renewable energy sector and the FDI inflow in the sector has been increasing over the years. - Private equity investment in renewable energy sector picked up pace in the country from 2004. According to a report by 3i Network – IDFC, from a private equity investment of US$ 851 million in 2005, inflows into the renewable sector in India soared to US$ 2,136 million in 2008. Separately, a study by the Word Resources Institute recently estimated a renewable energy market of over US$ 2 billion a year in India. - Independent Power Producers (IPPs) in this sector appear to provide attractive investment opportunity for private equity funds as a result of policy and regulatory developments such as generation-based tariffs, renewable energy tariffs and the national solar mission. Companies such as Auro Mira Energy, Greenko, Orient Green Power and Green Infra have been cited in the report as some of the IPPs which received funding from investors such as IDFC PE, Axis PE, Baring PE and Global Environment Fund. - With the proposed commissioning of a 50 MW tidal power project off the coast of Gujarat in 2013, India is ready to place its first ―seamark‖ that will be a first for Asia as well. London-based marine energy developer Atlantis Resources Corporation, along with Gujarat Power Corporation Ltd, has signed a memorandum of understanding (MoU) with the Gujarat government to start this project.Corporate Investments  State-owned Gujarat Alkalies and Chemicals Limited (GACL) has entered into an agreement with a Germany-based specialty chemicals maker, Evonik Industries for setting up a multi-million Hydrogen Peroxide and Propylene Oxide (HPPO) project at Dahej in Gujarat. This project would be based on an innovative, environment friendly HPPO technology.  Overseas Private Investment Corporation (OPIC), an agency of the US Government, has signed an agreement with Azure Power to fund its 15 MW solar photovoltaic (PV) project in Gujarat. The investment in the US$ 40 million project will be led by OPIC.  Toshiba JSW Turbine & Generator Pvt Ltd said its manufacturing facility for super- critical steam turbines and generators would go on stream in the second half of 2011.Corporate Initiatives  The world‘s first facility to manufacture carbon foam batteries will be set up at Bavla near Ahmedabad. Firefly Energy India is planning to build a plant to produce carbon foam batteries at an investment of US$ 28 million, the company‘s chairman Mukesh Bhandari said.MILAN PADARIYA ( PHARMA MBA) Page 24
  25. 25. BUSINESS ENVIRONMENT  State Bank of India (SBI), the country‘s largest lender, has become a signatory investor in the Carbon Disclosure Project (CDP), a collaboration of over 550 global institutional investors with assets under management of US$ 71 trillion.CDP is an independent not-for-profit organisation, holding the largest database of primarycorporate climate change information in the world. Over 3,000 organsations across the world‘slargest economies measure and disclose their greenhouse gas emissions and climate changestrategies through CDP. These disclosures aid them in setting reduction targets and makeperformance improvements.  Switzerland-based Satarem AG has signed an agreement for joint venture with SA India, erstwhile promoters of Crocodile brand in India, to enter the waste management and renewable energy business along with consultancy services for cement manufacturers in the country.  State-run power company NTPC has set up a joint venture with the Asian Development Bank and Japan‘s Kyuden International Corporation to develop renewable energy projects with a capacity of 500 MW over the next three years.  Hyderabad based Premier Solar has signed a contract for import of 200,000 thin film modules — which can provide for generation of 20 MW — from German manufacturer Schott Solar. Of these, Premier would receive 10 MW worth modules in August 2011, with the rest to be taken in 2012.  Wind turbine manufacturer KENERSYS, a part of the Kalyani Group, has set up a new facility at Baramati near Pune with an investment of US$ 11.18 million. The new plant will manufacture large multi-megawatt turbines, with 2 MW rated power. The company will manufacture 250 turbines every year, with a total power generation capacity of 500 MW.  IFC has announced corporate equity financing up to US$15 million to Andhra Pradesh- based Shalivahana Green Energy Limited (SGEL), a privately owned entity producing power based on biomass, to fund the latters pipeline projects.National Solar MissionThe Ministry of New and Renewable Energy (MNRE) has informed that the progress inimplementing the Jawaharlal Nehru National Solar Mission is satisfactory and according toschedule. The Ministry has sanctioned 802 MW capacities of grid-connected solar projects and36 MW of off-grid solar projects. In addition, six major research projects include setting up ofNational Centre for Photovoltaic Research and Education at IIT-Bombay were also approved.Clean Energy and Technology  Recently, Cerebra Integrated Technologies has announced the launch of Indias largest e- waste recycling facility in Bangalore. With this, Cerebra has begun the first phase of its e-waste management initiative that is separation of metals, non-metals, and processing (crushing) of PCB in the Mobile Shredder. Cerebra plans to send the crushed PCBs to Singapore for further processing and raw material extraction.MILAN PADARIYA ( PHARMA MBA) Page 25
  26. 26. BUSINESS ENVIRONMENT  The Bureau of Energy Efficiency (BEE) is looking to create a demand for energy efficient, products, goods and services awareness. The Bureau has set up an energy efficiency financing platform (EEFP), which aims at ensuring availability of finance at reasonable rates for energy efficiency project implementation and its expansion.  Finnish clean technology companies, which have joined forces within a common CleanTech Finland brand, see significant opportunities for Indian companies to help the country achieve its target of producing 38 per cent of energy through renewable sources by 2020.Government InitiativesThe Union Budget of 2011-12 announcements clearly indicate Indian government‘s decisiveplans to promote and develop clean energy and technologies, which will advance India‘s CleanRevolution. Key points from the Finance Minister‘s speech included:  Planned launch of National Mission in hybrid and electric vehicles  Allocations of US$ 89.41 million from National Clean Energy fund for speeding up The National Mission for a Green India.  The budget of the Environment Ministry increased by around US$ 67.1 million.  Extension of Tax holiday for the power sector by one year  A budgetary provision (2011-12) of US$ 56.6 million has been made for research and development in new and renewable energy for the first four years of the 11th Five Year Plan of the MNRE.  The government would dole out US$ 335 million over the next two years to banks and finance companies to lend money to solar energy projects at a generous 5 per cent interest rate, top government official said. The money would be lent to small solar projects adding up to 200 MW by companies like Sidbi, Nabard and National Housing Bank. These lenders would be provided interest-free loans by IREDA.  IFC will provide up to US$ 15 million in corporate equity financing to Simran Wind Project Private Limited (Simran), a privately-owned entity which is into wind-based power production. The company will use the money to finance its pipeline projects worth US$ 40 million in Tamil Nadu.  Punjab government has initiated an ambitious clean energy project to generate 1,500 MW power from the ‗run of the canal turbines‘. The Punjab Energy Development Agency (Peda) has already developed an indigenous prototype of the turbines.  To facilitate fast track exploration of shale gas, the Ministry for Petroleum and Natural Gas expects the process of carving out suitable blocks to be completed by April 2011, which would allow floating of the first round of auctions of shale gas blocks in August 2011.  Solairedirect Energy India is in talks with the Gujarat government to set up a 20 MW plant at the Solar Energy Park in Kutch at an estimated cost of US$ 67.1 million.MILAN PADARIYA ( PHARMA MBA) Page 26
  27. 27. BUSINESS ENVIRONMENTROLE OF CHINA GOVERNMENT:After a decade of efforts, China has achieved remarkable progress in sustainable development.- Economic development. China has maintained sustained, rapid and healthy growth of itseconomy. As a result, the countrys overall national strength has built up considerably, with itsGDP topping 1 trillion Yuan(RMB). China today is the largest recipient of direct foreigninvestment in the developing world and the sixth largest trading power in the world. Peopleslivelihood and quality of life have witnessed significant improvement. Furthermore, economicgrowth is increasingly based on more sustainable ways, relying on enhanced efficiency ratherthan heavy input of resources. The economic structure is being gradually optimized.- Social development. The trend of excessive population growth has been checked; science,technology and education have made positive headway; and remarkable progress has also beenmade in social security, poverty eradication, disaster relief and prevention, medical care, andnarrowing the regional gap in development.- Ecological conservation, environmental protection and rational exploitation of resources. Thecentral government has greatly increased spending in ecological conservation and environmentalprotection; the pattern of energy consumption is being gradually optimized; measures forcontrolling water pollution have been stepped up for key water systems; breakthrough progresshas been made in curbing air pollution; comprehensive use of resources has significantlyimproved; and the ecological environment has improved to some extend thanks to retiring fragilefarmlands and switching them to conservation purposes, such as planting trees and grass, andexpanding floodwater storage.- Capacity-building for sustainable development. The strategy of sustainable development hasbeen incorporated into various programs and plans by central government ministries and localgovernments. Public awareness of sustainable development has markedly increased, and relevantlaws and regulations have been enacted and enforced.However, China still faces quite a few challenges in implementing sustainable development.- The greatest challenges are: a conflict between rapid economic growth and voluminousconsumption of resources and ecological deterioration; social development lagging behindeconomic development; widening disparities between different regions in social and economicdevelopment; constraints posed by a large population and scarce resources; and inconsistenciesMILAN PADARIYA ( PHARMA MBA) Page 27
  28. 28. BUSINESS ENVIRONMENTbetween some existing laws, regulations and policies and actual needs for sustainabledevelopment.- Major problems urgently needed to be resolved include: the comprehensive quality of thepopulation needs improvement; aging of the population is accelerating; the social security systemis inadequate; the pressure on employment is heavy; the economic structure is less than rational;the operation system of the market economy needs to be improved; clean energy has a low sharein the total energy consumption; infrastructure is underdeveloped; the information infrastructurefor the national economy is of a low level; a serious waste exists in the exploitation of naturalresources; environmental pollution is serious; ecological deterioration is still not curbed;legislation on resources management and environmental protection needs improvement.With increasing globalization of the world economy, the international community is enhancingits understanding of and stepping up its efforts for sustainable development and commondevelopment. China should, after its accession to the WTO, give full play to the advantage of itssystem of socialist market economy. In particular, China should give full play to the role ofgovernment in organizing and coordinating the implementation of the sustainable developmentstrategy and properly handle the relationship of economic globalization and sustainabledevelopment. China should also, based on the achievements of the Johannesburg world summiton sustainable development, actively participate in international cooperation, and safeguard thecountrys fundamental interests, including its economic and ecological security.ROLE OF AFRICAN GOVERNMENT:Background InformationSince the United Nations Conference on Environment and Development in Rio (1992),sustainable development has remained elusive for many African countries. Poverty is still amajor challenge, as 41% of the Sub-Sahara African population (or roughly 300 million people)were living on one dollar a day or less in 2004. Most countries on the continent have notmanaged to reap fully the benefits of globalization. Besides, multiple armed conflicts,insufficient access to education and widespread pandemics, such as HIV and malaria, haveundermined Africas efforts to achieve sustainable development. The region is also challengedby serious environmental threats, including desertification, deforestation and climate change.The New Partnership for Africas DevelopmentOver the last years, African countries have been strongly committed to mounting an effectiveresponse to these threats and challenges. The New Partnership for Africas Development(NEPAD), which was launched by African heads of state in 2001, provides a framework forMILAN PADARIYA ( PHARMA MBA) Page 28
  29. 29. BUSINESS ENVIRONMENTsustainable development to be shared by all Africas people. It emphasizes the role ofpartnerships among African countries themselves and between them and the internationalcommunity, and proposes a shared and common vision to eradicate poverty through sustainedeconomic growth and sustainable development.African GovernmentsAfrican governments have also reinforced the pace of regional integration through therationalization of existing regional economic communities. They have increased the power oftheAfrican Union, especially in the field of security and peace management.Support by the International CommunityThese efforts have been supported by the international community, with financial and technicalcontributions to regional communities and specific initiatives to foster African development.Thus, the Heavily Indebted and Poor Countries (HIPC) program was initiated bythe International Monetary Fund and the World Bank in 1996, providing debt relief and low-interest loans to reduce external debt repayments to sustainable levels. Nominal debt servicerelief under HIPC to the 29 countries that have reached their decision points has been estimatedto amount to about US$62 billion, a significant share of which benefited Sub-Saharan Africancountries. In 2001, the World Trade Organization member states launched the DevelopmentRound of negotiations which, if concluded with decisive measures to liberalize agriculturaltrade, could provide significant benefits to some African countries. The 2008 Qatar meeting toreview progress with the 2002 Monterrey Consensus on Financing for Development will providean opportunity for the international community to refocus on the financing needs of Africancountries if they are to make significant progress towards meeting the Millennium DevelopmentGoals.Africa: A Priority Area for United Nations’ ActivitiesAfrica is a priority area for United Nations‘ activities, as illustrated by the establishment ofthe Office of the Special Adviser on Africa (OSAA) by the Secretary-General on 1 May 2003and the reference to Africa‘s sustainable development as a cross-cutting issue in theJohannesburg Plan of Implementation (see chapter VIII) which emerged from the World Summiton Sustainable Development in 2002. The special needs of the African continent have beensystematically identified there.The strategic importance of international and regional cooperation has been stressed, especiallyin integrating markets for goods and services, building cross-border infrastructure, developingnew crop varieties and other agricultural technologies for African growing conditions, managingshared water and other natural resources, tackling trans boundary pollution, and addressingclimate change, including through adaptation.MILAN PADARIYA ( PHARMA MBA) Page 29
  30. 30. BUSINESS ENVIRONMENTROLE OF UAE GOVERNMENT:For a country like the United Arab Emirates (UAE), urban development is a major concern ofpolicymakers, planners, public officials, and environmental advocates. The UAE has beenprogressing steadily on the path of growth and development over the last three decades,propelled by an oil-rich economy. Although not affluent in other natural resources, the countryscores high on development indices in recent years due to unprecedented economic growth, highper capita income, and robust social development. Among all the nations in the Arabian Gulfregion, the UAE has emerged as a hub of commerce, stability, security, and peace. According tothe 2005 Human Development Index Report compiled by the United Nations DevelopmentProgram (UNDP), the UAE has risen in rank to occupy the 41st position among the developednations of the world. Because of its economic growth and relatively open immigration policies,the UAE has attracted large numbers of people from all over the world, particularly from Asiaand Europe. The UAE has urbanized rapidly over a comparatively brief time frame. Prominentcities like Dubai have expanded several times their size in comparison with what they used to be,even as recently as the 1970s and 1980s. Today, Dubai features prominently on the global mapof emerging places, and is now considered by some experts to be among the ―world cities‖.The population of the UAE has been increasing by more than 5 percent annually for the past 15years. The immigrant population in the UAE has grown by more than 6 percent annually duringthis same time period. One consequence is the UAE‘s large-scale boom in construction due tothe huge expansion of urban areas, facilities, and infrastructure. In the Middle East and NorthAfrica (MENA) Region, more than US$300 billion is being invested in building urbanresidential, commercial, tourism, leisure, and entertainment projects. Of this, the UAE accountsfor US$36 billion, according to estimates of the Arab Real Estate and Construction Association.In the next five years this amount is expected to double, making the UAE ―the pearl of the east‖.While construction and real estate is a major contributor to Dubai‘s Gross Domestic Product(GDP), it is also among the prime resource-intensive sectors. Thus, growing cities such as Dubaineed to plan along sustainable lines in order to reduce their negative environmental impacts andnatural resource depletion. There is ample scope for establishing direct links betweenenvironmental and developmental issues in urban growth. By promoting sustainable lifestyles,cleaner production, renewable energy, water resources management, reduction of solid waste andsewage treatment, reuse and recycling of materials, ecological urban design and construction,public health, cultural expression and social responsibility of residents, cities can strive to bemagnets for long-term environmental sustainability.Taking up the cause of sustainable development, the Emirates Environmental Group (EEG), aleading non-government organization (NGO) based in Dubai, has emerged as one of the mostactive civil society NGOs in the United Arab Emirates. EEG, as it is popularly known, has beena pioneering force behind the mainstreaming of such potent issues as education for sustainabledevelopment, waste management, and separation of recyclable materials at source, the three R‘s(reduce, reuse, recycle), water and energy conservation, renewable energy production,sustainable transportation, public transit, combating desertification by expanding urban greenspaces, promoting recourse efficient green buildings, and encouraging corporate socialresponsibility. EEG‘s operations are targeted at building effective outreach among keyMILAN PADARIYA ( PHARMA MBA) Page 30
  31. 31. BUSINESS ENVIRONMENTstakeholders including governments, businesses, communities, and civil society groups. EEG‘svision is to facilitate a green and sustainable UAE.EEG has spearheaded community waste recycling through successful collection campaigns foraluminum cans, paper, cartridges, plastic, and glass. By facilitating sorted collection, EEG aimsto promote sound cyclical use of materials, reduction of emissions and pollution, mitigatingglobal climate change and reducing the ecological footprint of the UAE. A few years ago, EEGmounted an awareness campaign to popularize the concept of green buildings in an environmentthat was still unfamiliar with the imperative for sustainability. Raising awareness amongpolicymakers, communications media, professionals, and community leaders, EEG is now theconscience behind the movement to form a green building council for the UAE, to establishminimum environmental quality standards and objective and transparent rating systems, and tobuild environmentally sustainable structures. EEG has supported various national and localinitiatives to improve and expand public transportation systems, by promoting public educationon the economic and environmental benefits of urban transit. EEG has enlisted the activesupport of the corporate sector to steer growth and development in the direction of sustainability. In 2004, EEG launched the multi-stakeholder Corporate Social Responsibility (CSR) Networkin the UAE, bringing together the heads and hands of urban economic development in a single,structured, composite body.Keeping in perspective that 80 percent of the world‘s green house gases causing global warmingnow come from urban regions, EEG has increased the urgency of its campaign to create a cleanerurban environment, one that is based on the participatory efforts of all concerned. EEG‘s workhas received recognition at the international level, and it has been officially accredited by theGoverning Council of the United Nations Environment Program (UNEP), and by the UnitedNations Convention to Combat Desertification. EEG is the first environmental NGO in theworld to earn the prestigious ISO 14001 accreditation for its environmental managementsystems.ROLE OF GERMAN GOVERNMENT:Current and Future ActivitiesBased on its work programme for the period 2010-1013, the council will continue investing inthe societal dialogue on themes and processes of SD and giving input to the national SD-strategy.Furthermore, the Council will address the policy questions on the institutionalisation ofsustainability within society, politics and economy.The UN conference on Sustainable Development in 2012 (UNCSD 2012) is a major referencepoint for the upcoming work of the RNE. "Green Economy" is a central theme here, as is thedemand for appropriate institutional structures for integrating the national trade with theinternational dimension.MILAN PADARIYA ( PHARMA MBA) Page 31
  32. 32. BUSINESS ENVIRONMENTPresent Priority Fields  Vision 2050. Future Dialogue. Building on the Peer Review of Germanys sustainability policies (2009). The project aims to elaborate visions for Germany for the period leading to 2050 in the context of global warming, demography, ongoing globalisation and a changing global context. The results of the dialogue project will be mirrored in the annual conference 2011 and contribute to the progress report of the national strategy on SD  Germany, country of raw materials? Continuing work on a sustainable use of resources, urban mining  Green Economy, Consumption and Lifestyles. The RNE will address the central topic of Green Economy together with the formerly discussed topics sustainable consumption and lifestyles. More specifically, the RNE will develop the following subtopics:  Proposals for SD-measuring in the economic development of the population  Development of a ―German Sustainability Codex‖  Recognition of business performances for SD  Sustainable City. Dialogue with mayors on sustainable communal policies.  Sustainable fiscal strategies.  Demographic development, Health, Public Services.  Energy, Climate, Water, Mobility.  Sustainable Land Use.  Education for SD, integration, cultural diversity.  Involvement of Citizens.  Parliament and SD.  Statements on policy processes towards a SDS.  Annual Conferences and further communication elaboration. The topic of this year‘s annual conference: "Resetting the clocks: 2050" (read more)  “WerkstattN”. The project aims to pass 100 sustainability labels to projects or project idea on the basis of a set of sustainability criteria in 2011 to enhance visibility of role models in society and social business as well as to give appreciationThe full work programme (German) can be downloaded herePast Priority Fields  Corporate Social Responsibility;  Sustainable Shopping Basket;  Peer Review of Germanys sustainability policies;  Citizens action programme in the scope of demographic change (See initiative below);  (Communal) Sustainability Management;  Social Entrepreneur Award in the frame of the German Sustainability Award;  Workshop with local SD representativesReent reports, recommendations/statements:MILAN PADARIYA ( PHARMA MBA) Page 32
  33. 33. BUSINESS ENVIRONMENT  Review of the Federal Governments sustainability policies - The Peer Review features a broad perspective covering both the Federal Governments sustainability policies with the National Sustainability Strategy at its heart, and the initiatives and working schemes in the private sector as well as key areas of actions being taken in civil society. (November 2009)  Recommendation on the sustainable shopping basket (February 2010);  Recommendation on education policy (autumn 2009);  Statement on sustainability and fiscal system (September 2009);  Statement on the 2009 review of the EU-SDS (September 2009) ROLE OF AUSTRALIAN GOVERNMENT: Australia made a constructive contribution to the negotiations, achieving positive outcomes in our particular interest areas of oceans, trade, governance and energy. Aiming for practical solutions rather than just words, our delegation worked closely with both developed countries and developing countries through the Group of 77 and China, to address these issues in a way that would achieve real results. The national statements of heads of state and government and ministers focussed on poverty, food, water, sanitation, affordable energy, climate change, HIV/AIDS, and the importance of trade liberalization, especially subsidy reform, as a means of generating the resource flows needed for sustainable development. Australia was very pleased with the success of our neighbours, the Pacific Island Countries (PICs), in focussing world attention on issues of concern to them, particularly the issue of sustainable oceans management. The inclusion of a chapter in the Plan of Implementation on small island developing states was a significant outcome for the PICs and was strongly endorsed by Australia. Significant outcomes for Australia included: Inclusion in the plan of implementation of a section that recognises oceans as an essential component of the Earths ecosystem and sets an ambitious forward agenda for conserving marine biodiversity, protecting vulnerable areas such as coral reefs and wetlands, reducing marine pollution and eliminating illegal fishing; A hard-fought section on energy that achieves a balance between issues of access to energy for the poor and encouragement for greater use of renewables; and Reinforcement of outcomes from the international meetings on trade and finance at Doha and Monterrey, and strong support for the contribution of trade liberalization to sustainable development and poverty alleviation (with agricultural and environmentally damaging subsidies gaining their share of attention in that context). MILAN PADARIYA ( PHARMA MBA) Page 33
  34. 34. BUSINESS ENVIRONMENTOn globalization, Australia fought hard and largely successfully to gain recognition that greateropenness and integration of trade and investment is fundamental to generating the resourcesnecessary to achieve poverty reduction and the internationally agreed development goals. Goodnational level governance is also endorsed in the plan as an essential underpinning forsustainable development.REFERENCES PADARIYA ( PHARMA MBA) Page 34
  35. 35. BUSINESS ENVIRONMENT5. EXPLAINS FOLLOWING:1. CULTURAL CONFIRMITYConformity is the act of matching attitudes, beliefs, and behaviours to group norms.Norms areimplicit rules shared by a group of individuals, that guide their interactions with others andamong society or social group. This tendency to conform occurs in small groups and/or societyas a whole, and may result from subtle unconscious influences, or direct and overt socialpressure. Conformity can occur in the presence of others, or when an individual is alone. Forexample, people tend to follow social norms when eating or watching television, even whenalone.People often conform from a desire for security within a group—typically a group of a similarage, culture, religion, or educational status. This is often referred to as group think: a particularway of thinking individuals engage in that succeeds realistic appraisal of other courses of action.Unwillingness to conform carries the risk of social rejection. Conformity is often associated withadolescence and youth culture, but strongly affects humans of all ages.Although peer pressure may manifest negatively, conformity can have good or bad effectsdepending on the situation. Driving on the correct side of the road could be seen as beneficialconformity. Conformity influences formation and maintenance of social norms, and helpssocieties function smoothly and predictably via the self-elimination of behaviors seen as contraryto unwritten rules. In this sense it can be perceived as (though not proven to be) a positive forcethat prevents acts that are perceptually disruptive or dangerous.As conformity is a group phenomenon, factors such as group size, unanimity, cohesion, status,prior commitment, and public opinion help determine the level of conformity an individualdisplays.CultureBerry studied two different populations: the Temne (collectivists) and the Inuits (individualists)and found that the Temne conformed more than the Inuits when exposed to a conformity task.Bond and Smith compared, (1996) 134 studies in a meta-analysis and found that Japan andBrazil were two nations that conformed a lot whereas Europe and the United States of Americadid not as much.GenderSocietal norms often establish gender differences. There are differences in the way men andwomen conform to social influence. Social psychologists, Alice Eagly and Linda CarliMILAN PADARIYA ( PHARMA MBA) Page 35
  36. 36. BUSINESS ENVIRONMENTperformed a meta-analysis of 148 studies of influenceability. They found that women are morepersuadable and more conforming than men in group pressure situations that involvesurveillance. In situations not involving surveillance, women are less likely to conform. Eaglyhas proposed that this sex difference may be due to different sex roles in society. Women aregenerally taught to be more agreeable whereas men are taught to be more independent.The composition of the group plays a role in conformity as well. In a study by Reitan and Shaw,it was found that men and women conformed more when there were participants of both sexesinvolved versus participants of the same sex. Subjects in the groups with both sexes were moreapprehensive when there was a discrepancy amongst group members, and thus the subjectsreported that they doubted their own judgments. Sistrunk and McDavid made the hypothesisthat women conformed more because of a methodological bias. They argued that becausestereotypes used in studies are generally male ones (sports, cars..) more than female ones(cooking, fashion..), women are feeling uncertain and conformed more, which was confirmed bytheir results.Size of the groupMilgram and his colleagues found that if one individual stops and stares at the sky, only 4% ofthe people would stop as well and 40% would look at the sky, whereas if fifteen confederates doit, those numbers become respectively 40% and 90%.CULTURAL CONFIRMITYWhile conformity is a fundamental human practice, perceptions and levels of conformity differbetween cultures. In thewestern world, particularly in the United States, welionize the importance of independence andindividualism. Our country began as a rebellion, and theAmerican frontier kept the dream alive. It was said tocreate freedom by "breaking the bonds of custom,offering new experiences, and calling out newinstitutions and activities." (Turner) Now weadore Lady Gaga and her peers for their nonconformistattitudes. But are we truly more nonconformists than other cultures? On one hand, we are theculture that produces large amounts of popular music and movies consumed by other countries,but on the other hand, these songs and movies tend to all seem to follow the same formula. Ourculture is full of these contradictions. We must look to research for the truth.MILAN PADARIYA ( PHARMA MBA) Page 36
  37. 37. BUSINESS ENVIRONMENTResistance to Cultural ConformityThe United States has been dubbed the ―melting pot‖ because it has been associated with theassimilation of many cultures to that of a homogenized, American culture. Groups that initiallyregarded themselves as independent entities have found it increasingly difficult to practice theirbeliefs, especially when cross-cultural interactions precipitate conflict. However, despitepressures to conform, the Ojibwe and Hmong cultures have been remarkably resilient. Theirrefusal to conform to the melting pot metaphor can be attributed to conflicts with the state and itsinability to incorporate their cultural belief systems. Therefore, for the Hmong and Ojibwe, aspresented in Larry Nesper‘s The Walleye War and Anne Fadiman‘s The Spirit Catches You andYou Fall Down, conflict becomes a culturally constructive expression.Violating was an integral aspect of Ojibwe culture, and has also played a very important role inthe Ojibwe‘s refusal to conform to the melting pot metaphor. Violating was regarded as anintegral element to Ojibwe identity, and its practice was a significant transition to manhood forIndian boys. Therefore, threats of forcing conformity onto the Ojibwe people were opposed andthis opposition actually facilitated stronger cultural distinctness. Nesper related how Ojibwe menexhibited defiance towards the wardens by hiding on the seat floors of non-Indian friends so thatthey could continue to hunt during the offseason, or how they led wardens astray so Ojibwefishermen could escape with a bounty of fish.1Furthermore, expressions of conflict wereemployed to coincide with Ojibwe cultural belief systems. Whereas monotheistic cultures viewnature as a domain that reproduces in spite of human appropriation, the Ojibwe beliefemphasizes the reciprocal exchange with the spirit world.Why does indian culture encourage so much conformity?Because parents and stuff were born in the days where poverty is nearly everywhere, they wanttheir children to succeed. Doctors and engineers in those days are considered to be GOOD jobs,prestige, wealth etc, even now it still is. But now in the 21st century India is a booming country,more and more people are joining the middle class rank and are now afford to even haveluxuries, but to the older generations they will stick to their ancient way of thinking. It will be thesame for most of us as well, our way of thinking will be completely different to our futurechildren.REFERENCES PADARIYA ( PHARMA MBA) Page 37
  38. 38. BUSINESS ENVIRONMENT2. CULTURAL SHOCKCulture shock is the personal disorientation a person may feel when experiencing an unfamiliarway of life due to immigration or a visit to a new country, or to a move between socialenvironmentsOne of the most common causes of culture shock involves individuals in a foreign country.Culture shock can be described as consisting of at least one of four distinct phases: Honeymoon,Negotiation, Adjustment, and Mastery. There is no true way to entirely prevent culture shock, asindividuals in any society are personally affected by cultural contrasts differently.MILAN PADARIYA ( PHARMA MBA) Page 38
  39. 39. BUSINESS ENVIRONMENTFOUR PHASEHoneymoon phaseDuring this period, the differences between the old and new culture are seen in a romantic light.For example, in moving to a new country, an individual might love the new food, the pace oflife, and the locals habits. During the first few weeks, most people are fascinated by the newculture. They associate with nationals who speak their language, and who are polite to theforeigners. This period is full of observations and new discoveries. Like most honeymoonperiods, this stage eventually ends.Negotiation phaseAfter some time (usually around three months, depending on the individual), differences betweenthe old and new culture become apparent and may create anxiety. Excitement may eventuallygive way to unpleasant feelings of frustration and anger as one continues to experienceunfavorable events that may be perceived as strange and offensive to ones cultural attitude.Language barriers, stark differences in public hygiene, traffic safety, food accessibility andquality may heighten the sense of disconnection from the surroundings.While being transferred into a different environment puts special pressure on communicationskills, there are practical difficulties to overcome, such as circadian rhythm disruption that oftenleads toinsomnia and daylight drowsiness; adaptation of gut flora to different bacteria levels andconcentrations in food and water; difficulty in seeking treatment for illness, as medicines mayMILAN PADARIYA ( PHARMA MBA) Page 39
  40. 40. BUSINESS ENVIRONMENThave different names from the native countrys and the same active ingredients might be hard torecognize.Still, the most important change in the period is communication: People adjusting to a newculture often feel lonely and homesick because they are not yet used to the new environment andmeet people with whom they are not familiar every day. The language barrier may become amajor obstacle in creating new relationships: special attention must be paid to ones and othersculture-specificbody language signs, linguistic faux pas, conversation tone, linguistic nuancesand customs, and false friends.In the case of students studying abroad, some develop additional symptoms of loneliness thatultimately affect their lifestyles as a whole. Due to the strain of living in a different countrywithout parental support, international students often feel anxious and feel more pressure whileadjusting to new cultures—even more so when the cultural distances are wide, as patternsof logic and speech are different and a special emphasis is put on rhetoric.Adjustment phaseAgain, after some time (usually 6 to 12 months), one grows accustomed to the new culture anddevelops routines. One knows what to expect in most situations and the host country no longerfeels all that new. One becomes concerned with basic living again, and things become more"normal". One starts to develop problem-solving skills for dealing with the culture and begins toaccept the cultures ways with a positive attitude. The culture begins to make sense, and negativereactions and responses to the culture are reduced.Mastery phaseIn the mastery stage assignees are able to participate fully and comfortably in the host culture.Mastery does not mean total conversion; people often keep many traits from their earlier culture,such as accents and languages. It is often referred to as the biculturalism stage.Reverse Culture ShockReverse Culture Shock (―Re-entry Shock‖ or ―own culture shock‖ may take place — returningto ones home culture after growing accustomed to a new one can produce the same effects asdescribed above. This results from the psychosomatic and psychological consequences of thereadjustment process to the primary culture.The affected person often finds this more surprisingand difficult to deal with than the original culture shock. This phenomenon, the reactions thatmembers of the re-entered culture exhibit toward the re-entrant, and the inevitability of the twoare encapsulated in the saying "you cant go home again‖MILAN PADARIYA ( PHARMA MBA) Page 40
  41. 41. BUSINESS ENVIRONMENTBASIC THREE OUTCOMESThere are three basic outcomes of the Adjustment Phase: Some people find it impossible to accept the foreign culture and integrate. They isolate themselves from the host countrys environment, which they come to perceive as hostile, withdraw into a "ghetto" and see return to their own culture as the only way out. These "Rejectors" also have the greatest problems re-integrating back home after return. Some people integrate fully and take on all parts of the host culture while losing their original identity. They normally remain in the host country forever. This group is sometimes known as "Adopters". Some people manage to adapt to the aspects of the host culture they see as positive, while keeping some of their own and creating their unique blend. They have no major problems returning home or relocating elsewhere. This group can be thought to be somewhat cosmopolitan.Culture shock has many different effects, time spans, and degrees of severity. Many people arehandicapped by its presence and do not recognize what is bothering them.TRANSITION SHOCKCulture shock is a subcategory of a more universal construct called transition shock. Transitionshock is a state of loss and disorientation predicated by a change in ones familiar environmentwhich requires adjustment. There are many symptoms of transition shock, some which include: Excessive concern over cleanliness and health Feelings of helplessness and withdrawal Irritability Anger Glazed stare Desire for home and old friends Physiological stress reactions Homesickness Boredom WithdrawalMILAN PADARIYA ( PHARMA MBA) Page 41
  42. 42. BUSINESS ENVIRONMENT Getting "stuck" on one thing Suicidal or fatalistic thoughts Excessive sleep Compulsive eating/drinking/weight gain Stereotyping host nationals Hostility towards host nationalsREFERENCES 1. Macionis, John, and Linda Gerber. "Chapter 3 - Culture." Sociology. 7th edition ed. Toronto, ON: Pearson Canada Inc., 2010. 54. Print. 2. ^ Pedersen, Paul. The Five Stages of Culture Shock: Critical Incidents Around the Worldd. Contributions in psychology, no. 25. Westport, Conn: Greenwood Press, 1995. 3. ^ Barna, LaRay M. "HOW CULTURE SHOCK AFFECTS COMMUNICATION." Communication 5.1 (n.d.): 1-18. SocINDEX with Full Text. EBSCO.29 Sept.2009.web. 4. ^ Oberg, Dr. Lalervo. "Culture Shock and the problem of Adjustment to the new cultural environments". World Wide Classroom Consortium for International Education & Multicultural studies. 29 Sept 2009. 5. ^ Mavrides, Gregory PhD ―Culture Shock and Clinical Depression.‖ Foreign Teachers Guide to Living and Working in China. Middle Kingdom Life, 2009. Web. 29 Sept. 2009. 6. ^ Martin Woesler, A new model of intercultural communication – critically reviewing, combining and further developing the basic models of Permutter, Yoshikawa, Hall, Hofstede, Thomas, Hallpike, and the social-constructivism, Bochum/Berlin 2009, book series Comparative Cultural Sciences vol. 1MILAN PADARIYA ( PHARMA MBA) Page 42