A MINOR PROJECT REPORT

ON

A STUDY OF THE LEGAL ENVIRONMENT OF INDIAN

BUSINESS

Submitted in partial fulfillment of requirement of Bachelor of

Commerce (B.COM) (H)

B.COM (H) VITH SEMESTER (MORNING)

BATCH 2014-2017

Submitted to: Submitted by:

Mrs. Jasleen Kaur Medhavi Budhiraja
Designation Enrollment no.
03914188814

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI
 ACKNOWLEDGEMENTS
A lot of effort has gone into this training report. My thanks are due to many people with
whom I have been closely associated.

I would like all those who have contributed in completing this project. First of all, I

would like to send my sincere thanks to Mrs. Jasleen Kaur for his helpful hand in the

completion of my project.

I would like to thank my entire beloved family & friends for providing me monetary as
well as non monetary support, as and when required, without which this project would
not have completed on time. Their trust and patience is now coming out in form of this
thesis.

2
 CONTENTS

Description Page No.

Acknowledgement 2
Contents with page no. 3
List of tables -
List of figures -
List of symbols, Abbreviations or Nomenclature (optional) -
Executive Summary 4
Certificate of completion 5
Introduction to topic 6
Objectives 10
Literature review 11
Company Profile 32
Research Methodology 47
Analysis & Interpretation 50
Findings & Inferences 61
Limitations 64
Recommendations and Conclusion 65
Appendices 68
Bibliography 72

EXECUTIVE SUMMARY
3
A country that has had over 5000 years of civilisation, whose culture is synthesis of many
different cultures; a country which has a very complex social structure and has diversity
more than any other country in the world. India. From the last decade, as the cycle of
progress and prosperity reaches India again, more and more International Businesses
want to either buy from or sell in or do both, in India. It is essential for a foreign
company planning to enter India, to understand its culture, traditions and peoples
mindset. Since these foreign companies will subject themselves to the Indian jurisdiction
and Laws, it is also necessary to be familiar with the basic legal environment, before
deciding to enter the country.
This report will serve as just a basic guide on the Indian Legal Environment, for the
foreign companies. It covers some key point and risks related to the laws and policies
applicable to doing business in India.

It covers the main laws linked to the three basic categories of international business,
which are:
- Trade
- International licensing of technology and intellectual property
- Foreign direct investment
The Indian Judicial System
India is divided in to 28 States and 7 centrally administered regions, called "Union
Territories". It has a three tier judicial structure. At the lowest level are the District
Courts, heading each of the over 600 administrative districts. Second, each State has a
High Court, but some states share the same High Court. (total 21 High Courts). At the
apex is the Supreme Court of India situated at New Delhi. Besides the broad three tier
structure there are various specialized tribunals - the more prominent ones being the
Company Law Board; Monopolies and Restrictive Trade Practices Commission;
Consumer Protection Forum; Debts Recovery Tribunal; Tax Tribunal.

4
CERTIFICATE OF COMPLETION

5
 CHAPTER I-A
INTRODUCTION TO THE TOPIC

6
Liberalisation in overseas investment policy, in order to improve exports and strengthen
economic linkages with foreign countries, has intensified India's participation on the
international arena.
Overseas Investments
As per the recent RBI data, Indian companies carried out overseas investment
transactions that resulted in outward FDI. Some like SanmarGroup International
committed US$ 67.65 million to its Switzerland-based wholly-owned subsidiary (WoS)
Sanmar Group AG. The WoS is engaged in financial, insurance, real estate and business
services. Tata Steel infused US$ 54.63 million in its Singapore-based WoS, Tata Steel
Asia Holdings Pte., Crompton Greaves invested US$ 43.19 million in its WoS based in
Mauritius. GlenmarkPharmaceuticals committed US$ 55.47 million in its Switzerland-
based manufacturing WoS, Glenmark Holdings SA
Apart from these players, there are many other Indian firms who are ready to venture
abroad for growth and development. Other major overseas acquisitions in recent years by
Tata Steel, Hindalco, Bharti Airtel, etc have also been a part of their inorganic growth
strategies.
Investments Abroad - Government Initiatives
The overseas investment policy has been streamlined substantially- both in terms of
scope and size, and more so, after the introduction of Foreign Exchange Management Act
(FEMA) in June 2000. The US, the UK, Singapore, Mauritius, the Netherlands and
British Virgin Islands are the main target countries that aide outward FDI from India,
with Africa becoming an increasingly viable destination.
Further, the government is considering setting up a high-level panel that will approve
overseas asset acquisition by state owned companies without going to the cabinet.
The Indian central bank has decided to further liberalise the overseas investment policy
with a view to facilitate more operational flexibility to the corporate.
Trend of outward investments during the past one decade:

7
 A trend analysis shows that the level of outward FDI from India has increased manifold
since 1999-2000. The level of net outward FDI flows (on BoP basis), however, recorded a
sharp uptrend at US$ 74.3 billion during the second half of 2000s (2005-06 to 2009-10)
as compared to US$ 8.2 billion in the first half of 2000s (2000-01 to 2004-05). Even
though trend in India's outward FDI was moderately affected during crisis year of 2009-
10, a sharp rebound was seen in 2010-11.
Table 1: Yearwise position of actual outflows in respect of outward FDI
& guarantees issued
(in million US Dollar)
Period Equity Loan Guarantee Total Guarantee
Invoked Issued
2000-2001 602.12 70.58 4.97 677.67 112.55
2001-2002 878.83 120.82 0.42 1000.07 155.86
2002-2003 1746.28 102.10 0.00 1848.38 139.63
2003-2004 1250.01 316.57 0.00 1566.58 440.53
2004-2005 1481.97 513.19 0.00 1995.16 315.96
2005-2006 6657.82 1195.33 3.34 7856.49 546.78
2006-2007 12062.92 1246.98 0.00 13309.90 2260.96
2007-2008 15431.51 3074.97 0.00 18506.48 6553.47
2008-2009 12477.14 6101.56 0.00 18578.70 3322.45
2009-2010 9392.98 4296.91 24.18 13714.07 7603.04
2010-2011 9234.58 7556.30 52.49 16843.37 27059.02
2011-12* 4031.45 4830.01 0.00 8861.46 14993.80
Total 75247.61 29425.32 85.40 104758.30 63504.05
* April 2011 to February 22, 2012

Source: rbi.org.in

Proposals:

In recent years, outward FDI continued to be mainly financed through equity and loans.
Although guarantees issued have been rising, their invocation has been negligible during
2009-10 and 2010-11. It has been observed that the number of outward FDI proposals
under the Automatic Route during 2000s has also been on the rise indicating the growing

8
appetite of the Indian corporates to establish their foot prints abroad and the liberal
regulatory regime.
Table 2: Number of proposals under Approval and Automatic Route
Period Approval Route Automatic Route Total
2008-09 6 974 980
2009-10 4 690 694
2010-11 19 1187 1206
2011-12* 10 1123 1133
* April 2011 to February 22, 2012

Source: rbi.org.in
Road Ahead
International business has been playing pivotal roles for centuries. It has become an
integral part of the present day world. It has to depend upon the other countries to import
goods which are not produced domestically or the goods which are produced
inadequately for domestic consumption. Similary, some times, a country tries to export
all those items that are produced over and above local requirement. There is a growing
realisation that the future growth of Indian companies will be substantially driven by the
share they have in the global market. Indian companies are acquiring overseas assets to
establish their presence in foreign markets and to upgrade their competitive strength.

9
 OBJECTIVE

To study the overall legal framework of Indian business.

To study the different limitation that consider as doing business in India.
To study the different business law which impact the business decision.
To study how TATA group venture in abroad.

10
 CHAPTER I-B
LITRATURE REVIEW

11
The economic rationale for doing business in or with India may be sound;

however entering into a new emerging market is fraught with challenges. There

are many legal and regulatory issues that should be taken into account at an early

stage. This article will explore the top-level issues that a foreign investor must

consider before taking the business decision to do business with India.

Foreign Investment Framework

Indias Foreign Direct Investment Policy (FDI Policy) provides two routes for

foreign investment:

1, The automatic route (no prior Government approval is needed); or

2, The approval route (prior Government approval is needed), which inter-alia

depends on the sector in which foreign investment is sought to be brought in.

The FDI Policy also outlines the sectorial limits, which cap the amount of foreign

investment in certain sectors such as telecommunications and insurance. Entry

into such sectors follows the approval route. Several sectors in India however are

free for 100% foreign investment. This removes the need to have a local partner

for purely regulatory reasons, but economic and logistical reasons may still

remain for such an alliance. In addition, there are exchange control regulations,

which regulate the price at which shares in an Indian company can be acquired by

a foreign investor.

Business Entity Formation

A number of structures can be adopted for carrying out business in India. These

include setting up a:

12
1, Liaison / representative office;

2, Branch office;

3, Limited Liability Partnership; or a

4, Subsidiary company, being either a public limited company or a private limited

company.

The type of office that is appropriate will depend on the nature of the activities

being carried out. In most circumstances, prior approval for the office is required

from the Reserve Bank of India (RBI). An office has the advantage of being easier

to close down, however branch offices are subject to strict exchange control

guidelines and have unlimited liability.

Companies provide greater flexibility of operations and also benefit from limited

liability. The decision as to the type of company to choose will be based on the

on-going compliance requirements (which are slightly more onerous for a public

limited company) and the end objectives of the entity. By way of illustration, a

private limited company is not permitted to raise additional monetary resources

from members of the public. In the event that a foreign investor establishes an

entity in India only for the purpose of making downstream investments in the

country, any foreign investment in such holding company would require prior

approval of the Government.

Local Partners

Often, strong local domain expertise will be needed for a foreign investor to

penetrate several market segments, and accordingly a joint venture is often a

recommended route for market entry. Although several joint ventures have ended

in tears, others have stood the test of time and have become case studies for

13
cultural integration. By way of an example, the Maruti-Suzuki joint venture

brought the first rush of Japanese technology for the Indian automobile segment

and continues to spearhead the automotive segment in India.

Due Diligence and Entity Selection

Before embarking on a joint venture arrangement, a thorough due diligence

exercise on legal, tax and accounting fronts is essential. This allows the parties to

identify and understand the issues and risks associated with a joint venture and to

be better prepared to exploit the opportunities. Existing Indian companies can

bring their own baggage of liabilities and most investors prefer to incorporate a

new limited liability company to serve as the joint venture vehicle. The business

vehicle used for the joint venture will depend on the benefits and drawbacks of

each type of entity, the local laws, and the tax and commercial environment in

which they operate.A business operates its over all activities in environment

where legal framework provides a protection to the business for its right and

similarly business is also accountable for its duties towards various stakeholders.

In dynamic environment and more particularly after liberalization in the country

and over all globalisation, a business requires being more vigilant in framing

strategies at corporate and business level. The concept of competition now is seen

as sine qua non for three reasons; (1) being mandate by the State and Statute, one

can't escape from its legal responsibility (2) being used as a weapon to improve

quality and thereby winning confidence of customers, building brand image,

increasing market share (3) improving quality using optimum resources is seen as

corporate social responsibility.

14
The paper discusses on the first aspect, analysing Constitutional provisions and

other relevant Statutes and interpretation by Supreme Court and various High

Courts in the matter related to dispute aroused between supplier of goods &

services vs. customers & society.

The Constitutional Law of India has directed State by chapter IV, known as

Directive Principles. The chapter III, gives fundamental rights to the citizens

implementing this chapter has many time created conflicts with the other chapter

i.e. directive principles. The courts have harmonized such conflicts by giving

higher weightage to either of two. The concerned chapter IV directs State in

matter of concentration of wealth, welfare of consumers' vis--vis Fundamental

Rights (under chapter III) of a citizen (supplier of consumers). From this general

mandate, government enacted MRTP Act, Consumer Protection Act, Competition

Act, Company Act and few other Statues.

On the passage of time path of socialistic pattern by government changed into

capitalistic pattern, influenced by global forces has also changed mindset of

consumers as well judicial interpretation also changed direction of doing business

by taking care of consumers and society. Recent judgments related to above Acts

and relevant issues, e.g. restricting competition, welfare of consumers, marketing

and unfair trade practices, abolishing unnecessary restrictions on manufacturers

that are imposed by government, restrictive and monopolistic practice etc are

few examples that are discussed and analysed at length in the paper.

The paper discusses on the second aspect that is competition is being used as

weapon to improve quality and thereby winning confidence of customers,

building brand image, increasing market share. The business survives and excels

15
if they satisfy their important stakeholder, i.e. consumer. This is possible by

improving quality of the product and complying legal obligation attracts more

consumers for longer period. That gives them an edge in marketing, because

loyalty of consumer consumes less market expenses and consumers perceive law-

abiding business as good business. The paper highlights few business cases that

succeeded in wealth maximization of stakeholders.

Finally we discuss how competition improves quality of the product and service

using optimum resources is seen as corporate social responsibility. The perception

and mind set has been changed due to increased literacy and awareness. Society

expects that as business also consume common resources of the society and hence

it should return a part of the fruit for social cause. The paper discusses few

socially responsible corporate pertinent to above two aspects and conclude over

all competitive business environment in light of legal provisions and judicial

pronouncements.Definition of business

The term business is understood and explained in different ways by different

people. For some, business is an activity, for some it is a method of transacting,

for sonic others, it is a method of money making and some people argue that

business is an organized activity to achieve certain pre-determined goals or

objectives. Dictionary meaning of business is: the act of buying and selling of

goods and services, commerce and trade. Based on all these meanings of justness,

we may define business as: gainful activity through which various elements of

society conduct exchanges of the desirable things.

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In the olden days, the people engaged in different activities in a society were

classified into four groups : Brahmnas, Shatriyas, Vysyas and Sudras, Of these our

fold classification of social activities, the activities of vysyas included basically,

facilitating exchange. Hence, business as an exchange activity remained since the

days of exchange started. It could also be recalled that business as a social activity

became popular only when the wants of different people in a society were to be

met with the available resources. In other words, whenever there was a scope for

producing something, which is wanted, then business activity automatically

emerged.

But now a days, business is viewed more as a profession or occupation. From the

days of family owned business, we have reached a stage of professionals and

experts starting and running business. It could also be noted that business

administration and business management have emerged as the most prospective

field of study and occupation. Persons with educational background in business,

enter business or join business organizations to make them successfully function.

Unlike the olden days, a number of interests are involved in business today, viz.

owners, investors in business, suppliers, customers, employees, government, stake

holders, administrators, managers, strategists, executives, and so many others.

Hence, every business activity has to meet the goals or aims or objectives of these

various groups of people. That in fact, has made business a most complicated

activity.

17
Modern business has a number of features. Understanding of these would help to

appreciate and organize business activities in a highly professional way.

1. Business is an economic activity :

Business involves organizing activities to satisfy human plants. These activities

may result in the manufacture or production of a commodity or extension of a

service. When a good or service is produced, resources are involved. Resources

like human resources, physical resources and financial resources are all required

to realize output to meet human needs. These resources are limited in supply, and

so business involves identification of resources, evaluation of resource qualities,

buying these resources and utilizing these resources. These resources being scarce

in relation to their demand, the resources carry some value [i.e., price]. They

cannot be procured at any cost to produce anything to meet human wants. So

automatically selection among various resources come up which is made on the

basis of requirement and cost. Once they are procured, then they are used in a

very judicious manner so that there is no waste. That is optimal utilization-of

resources is to be achieved. In this context, several decisions like resource

18
selection, resource procurement, resource mix, resource utilization, etc. are all

involved. As in all these stages, choice among alternatives is involved, every

business activity is to be treated as economic in nature. Depending upon the

business activity, the approach to selection among alternatives would differ. For

example, in a manufacturing business, the choice is about input selection to

supply quality output, in a service organization the choice is about-inputs and

delivery process, in a government organization it is about production and

equitable distribution of output, in an institution like bank, provision of various

investment opportunities of short term and long term to the public, etc.

2. A business organization is an economic unit

Every business organization is engaged in transforming inputs into output to meet

the requirements of the people. The selection of input and size of procurement

will depend upon, the size of the organization. This would also depend upon the

nature or product or service extended/by the business unit. All these are attended

with the objective of making profit or surplus. Only when there is surplus

achieved, can the business units grow. Hence creation of surplus in a business

becomes the focal point and this is best achieved through optimal utilization of

resources. That way, all business units have to achieve the maximum output with

minimum inputs which in other words is the effort to achieve economic

19
efficiency. Only economic efficiency can enable firms to be efficient in every

other sense. Therefore, business organizations are only economic units in nature.

3. Business decisions making is essentially an economic process

All business decisions involve selection from alternatives. In other words, the

rational choice of inputs is implied in every business decision. Hence, to be

rational, a business unit goes through the process of : determining objectives,

identifying opportunities, generating alternatives, classifying these alternatives as

feasible and infeasible alternatives, then rank the feasible alternatives on some

criteria and then select those alternatives fulfilling the constraints. For example, if

the objective of a business unit is to maximize profits, then this would call for

minimizing cost and maximizing revenue. On the cost side, the business unit have

to identify, procure and utilize resources in the optimal way and on the revenue

side, the business unit should determine the price which would facilitate

maximization of revenue. Price determination again would depend on various

factors like demand, supply, competitive scenario, government interference,

statutory compulsions, conflicting interests of the stake holders of the business,

etc. Therefore, every decision made in a business would automatically depend on

the economic process.

Changing concept of business

It has been stated already that the concept of business has undergone a vast

change. From a producer driven stage business has become consumer centered

20
and driven stage. While the earliest concept was * sell what is produced' the

modern concept is 'produce what is wanted' So every business depends on

consumers and their ever changing needs. Any business unit which has

successfully understood its customers and offer the product or service meeting

their requirements alone is successful. But in this process, business units have to

manage pressures from its owners and other stake holders. It should take into

account the requirements of the workers and the trade unions. It should abide by

the rules and regulations of a number of government agencies and institutions. It

should meet the challenges and threats from competitors. Most important, it has to

fulfill itssocial obligations. To survive every business unit has to also consider: the

revolutionary changes in technology, market expansion, information explosion,

competitor strategies. These are days when the consumers are better informed and

so no business unit can afford to ignore consumer awareness and preferences.

Technological development has brought with it the compulsion to use modern

methods and techniques. Social obligations have made business units to meet

pollution norms, etc. Trade union pressures have made them to design satisfactory

service conditions for the work force. Then there is compulsion to provide for

development of human resources in the organization to achieve organizational

development. All these have made modern business tight rope walking.

BUSINESS ENVIRONMENT

Business involves activities, which links an organization with outside world.

Within an organization, a business is governed by the behaviour of its employees,

management or decision makers. But externally a business is influenced by a

21
score of factors, which range from customers to competitors and government.

Therefore, a business cannot be independent of (he influence of these external

factors. It should also be noted that a business has absolute control over all the

internal factors, it has no control over the external factors. So often it becomes

necessary for business houses to modify their internal decisions and policies, on

the basis of the pressure from external factors This highlights the need to be ever-

cognizant of changes and influences of external factors so as to conduct business

on healthy lines. It is in this context that business environment assumes all

significance. Business environment therefore refers to the influences and

pressures exerted by external factors on the business. The following Figure would

help to understand the various factors which constitute the business environment.

From the Figure: 1, it would be clear that business organizations function in an

environment subject to the influence of various constituents. Earh one of the

constituents have in turn a number of factors influencing them. For example,

economic environment has micro and macro environmental factors affecting it. To

develop a right perspective about business environment, let us discuss briefly

about each one of the external environment constituents.

22
1. Demographic environment : This refers to the size and behaviour of population in

a country. Suppose a country has a huge size of population, then, the country

would provide extensive business or marketing opportunities for all types of

business organizations. On the other hand, a country with low size of population

would force the business organizations to seek external market for their products

or services. Similarly, if the population in a country is well - tuned to 'use and

throw concept [like most of the Western countries] then there would be limited

scope for repair shops and employment scope in that segment would be almost

nil. But alternatively this would give wide marketing opportunities for

manufacturing organizations. On the other hand, if the population is averse to 'use

and throw' concept, then the business opportunities would be limited for

manufacturing organizations but the repair shops, self-employed technical persons

and spares manufacturers, would have roaring business. Hence, the size and

quality of population emerges as a vital factor influencing business environment.

2. Economic environment:Economic environment refers to the overall economic

factors like economic philosophy of the country, economic structure, planning,

economic policies, controls and regulations, etc. All these have a serious impact

23
 on the functioning of business organizations in a country. For example, in a

Capitalistic economic system, business organizations would be subjected to

limited government regulations and controls. They would be more governed by

market forces [demand and supply] rather than by other factors. On the other

hand, in a Socialist system, the government would determine everything on behalf

of the country. In a Communist set up, the government has absolute control over

every aspect over production that private enterprises may not exist at all. In a

Mixed economic system, government would be selective in allowing die presence

of private enterprises in certain activities, reserving some spheres completely for

governmental operations. Hence, the economic philosophy of the country directly

determines the scope and functions of business organizations in that country.

3. Geographical and ecological environment: Geographical environment refers to

climatic conditions and natural resources, which determines flu manufacturing

scope and the nature of the products that could be marketed. For example, a

country like Kenya has to manufacture more of products based on forest

resources, while the Gulf countries can produce only crude, Japan can have

business in fish, fruits, etc., Countries in the tropical region would have

organizations specializing in products from geographical resources available in

abundant in that region, while organizations in Mediterranean countries have a

Different businessscope, Scandinavian countries have scope for dairy product

manufacturing, etc. Similarly ecological imbalance is taking place at an alarming

rate in the world today, that deforestation and hunting of rare species of animals

for food are all prohibited now. Hence, while identifying the business

24
 opportunities, business organizations have to be conscious of the limitations

posed by the geographical and ecological considerations.

4. Legal environment: It is well known that every country has a number of legal

regulations to ensure that the interests of business organizations do not run

counter to national interests. Right from the stage of incorporation of

organizations, their listing in stock exchange, reprisal of customer complaints,

payment of tax to government, manufacturing practices, human resources

development to pricing of products and services, a number of legal regulations

have to be fulfilled. For example, in USA and several western countries,

consumer protection is very active, that even a medical practitioner is subjected to

huge liabilities in limes of deficiency in services. In India and other countries,

very rigorous legal provisions arc in place to prevent hunting of rare species, that

any organization, which manufactures products based on such species, have lo get

legal sanctions. In case of failure to honor cheques issued, organizations

are now a days made to pay hefty compensations. Hence, the deterrence in terms

of legal provisions has become the order of the day. All organizations have to first

of all address these provisions become coming in to steam.

5. Technological environment: This is a very significant external factor

determining the destiny of business organizations. Supported by

computerize operations, modem business organizations have succeeded in

analyzing customers, minimizing the defects in products, ensuring service at the

right time and place, etc. While communications use to take unduly long time in

25
 those days, business communications are instantaneous these days, thanks to

modem satellite technology. Modern organizations have recognized that research

and development alone can ensure organizational growth and stability. They

have become more and more pro-active and remain as change agents of the

economy. Governments have also become more technology conscious that right

from police controls to registration of title deeds, computerizations has been

adopted. Customer servicing through call centers is the latest necessity of

organizations. Manufacturing activities have become more and more technically

sophisticated. Therefore business environment has become highly dynamic.

6. Social environment: Social environment today has brought compulsions on

business organizations to adhere to certain business ethics and morals. Social

responsibility of business is an important force that modern business

organizations cannot wriggle out of their duties and responsibilities towards the

society. For example, every leather manufacturing or process unit is made to

install pollution prevention system. Similarly, the expectations of various interests

in the society have undergone a sea of change. The shareholders, promoters and

owners expect a reasonable return on their investments. The workers expect

security of service, terminal benefits, accident relief and various other

compensations from the organizations. Government expects the business units to

pay tax regularly and participate in social improvement. The distributors and

agents expect the organizations to ensure smooth delivery process and demand

more commission and compensation. Suppliers expect the organizations to give

them continuous business and prompt payment of bills. Therefore each social

26
 group has a specific interest, the combination of all these, exerts enormous

pressure on the business unit. A business unit which succeeds in meeting the

interests of all these groups remains successful and grows.

7. Educational and cultural environment: Educational environment in a country

determines the quality of population. A country with very high illiterate

population would always experience political and economic instability. Similarly,

lack of education may also give scope for the existence of superstitious beliefs,

fatalistic attitude, etc. People's choice of goods and services would be more

governed, by their religious faiths and beliefs. For instance, in the colonial days,

the Indian population was a victim of the Britisher's divide and rule tactics. The

economic development of a country completely depends on the literacy level

which alone can pave the way for improvement in science and technology,

modernization, industrialization, etc. In such a country, the business opportunities

are plenty.

Cultural environment refers to the values, norms, customs, ethics, goals and other

accepted behaviour pattern of people in a country. In olden days, religion was the

basis of all activities in a society. The religious leaders and institutions determined

what business should do and what people must consume. In India, the existence of

caste system has done more damage than any good. Caste based politics has

become the order of the day. Under the pretext of working for backward and

downtrodden people, several persons have amassed fortune. This is worsened by

political support and policies. A modern organization does not have the liberty to

27
 recruit people on merit but it has to follow strictly die reservation policy of the

government. Another serious aspect of the cultural environment is the attitude and

behaviour of the people in urban and rural areas. The urban - rural divide has

created enormous problems for administrators and specifically business

organizations prefer urban educated person to persons from rural areas.

8. Political environment: Political stability is one important factor winch determines

the business growth or downfall. A country with relative political stability would

witness inflow of foreign capital and collaboration. By political stability we mean

that the policies of government remaining consistent. As the business decisions

arc based on government policies, frequent changes in these policies would force

business organizations to change their policies too which, makes functioning very

difficult. Sometimes, when the policies determined by a party in power are

reversed by the succeeding party forming the government, there would be far

reaching changes in business environment For example, India was following a

policy of protectionism till late" 1908's. Hence, the industrial development and

economic development could not take place at a rapid rate. In the absence of

competition, the business organizations, made people to accept inferior quality

goods and services. Once, the liberalization policy is adopted, the scene has

completely changed. Today, no business can survive unless it provides quality

goods or services on par with the multinational corporations. Another aspect of

political environment is the political ideology with which a party is wedded to,

would make the government tow the lines of countries with similar ideologies.

Until the disintegration of USSR, India was simply following USSR's lines, but

28
after the disintegration, India has to literally fend for itself. With the pressures

mounted by the Western countries, India had to accept various trade and monetary

policies. This has brought about a complete change in business environment.

NEED TO SCAN ENVIRONMENT

Having discussed very briefly the features of each one of the constituents of

business environment, let us discuss why the environment should be analyzed by

the business organizations.

It is well known that business enterprises cannot remain independent of the

society and the institutions. So whatever decision they take as to be in tune with

the requirements of society and the dictums of the institutions. A business

organization has to continuously monitor the environment so as to identify the

business opportunities and threats. By exploring its strengths and minimizing its

weaknesses, if the organizations can capitalize these opportunities and effectively

thwart the threats, then it would be able to grow. Let us elaborate this with an

example.

Suppose an organization wants to introduce a new consumer durable product in

the market. Then it would study whether there would be demand for this product

and the product would be accepted by the society. At the outset, the organization

would examine whether the product would suit the culture in the society. Suppose

the product is 'use and throw' type. Then people would certainly be influenced by

29
this feature of the product while evaluating the price of the product. In India, such

a product would never be accepted as the culture here is to lengthen the life of

every product by repairing it. Similarly suppose the product requires some critical

component from abroad. Then unless the government policy is favourable the

component has to be imported at a very high cost, which in turn would drive the

price up. .Suppose the product is only one of its types, the organization would

then emerge as a monopoly supplying the product. This may not be tolerated by

the government. Suppose the manufacturing of the product involves advanced

technology, then the type of human resources required would be well educated

and trained. Obviously this will rule out the job 'opportunities for persons

educated in rural areas. Further, if the manufacturing process involves scope for

pollution, then the organization has to address it in relation to the provisions of

the pollution control norms. Hence, in every decision of the organization, the

external environment has an important role to play. Any future plans of expansion

and forecasting of demand will depend upon the changes in the business

environment. These changes may include both the current and expected changes.

Unless these changes are also foreseen, decisions taken would turn out to be

suicidal. In the case of organizations which have been pro-active, the changes in

the environment do not affect them much. But those which fail to understand from

their own experience or that of the other changes would remain challenges for

ever.

Among the various constituents of business environment discussed above briefly,

we will focus on the following constituents and discuss them in greater detail. The

30
constituents now elaborated are: Economic environment, political environment

and cultural environment.

31
 CHAPTER II
COMPANY PROFILE

2.1 HISTORY

32
As much an institution as it is a business conglomerate, the Tata group is unique in more
ways than one. Established by Jamsetji Tata in the second half of the 19th century, the group
has grown into one of India's biggest and most respected business organizations, thanks to
its entrepreneurial vision, its commitment to ideals that put people before profits, and its
fortitude in the face of adversity.
History: A brief history of the Tata group, its enterprises and their evolution, its
leaders and value systems.
Pioneers: This is the story of a business house that has created wealth for a nation. It is a
story of struggle, anxiety, adventure and achievement. This is the story of the Tata groups
pioneers.

Milestones: Highlights of the group's evolution through the years.

Lasting Legacies: A special edition of Tata Review, the Tata group publication,
chronicling the lives and achievements of three Tata titans: Jamsetji Tata, JRD Tata and
Naval Tata.
Tata Central Archives: Tata Central Archives is responsible for preserving the rich
history of the Tata group for future generations. It is a goldmine of information, a repository
of important documents correspondence, photographs, awards, trophies, medals,
citations, paintings, video and audio clips, etc that relate to the genesis and development of
the Tata organization.

JRD Tata Biography

Born: July 29, 1904
Died: on November 29, 1993
Achievements: He had the honor of being India's first pilot; was Chairman of Tata & Sons
for 50 years; launched Air India International as India's first international airline; received
Bharat Ratna in 1992.
JRD Tata was one of the most enterprising Indian entrepreneurs. He was a pioneer aviator
and built one of the largest industrial houses of India.
JRD Tata was born on July 29, 1904 in Paris. His mother was French, while his father was

33
Parsi. JRD's full name was Jehangir Ratanji Dadabhoy Tata and he was popularly known as
Jeh to his friends. JRD's father Ratanji Dadabhoy Tata and Sri Jamsetji Tata shared their
greatness from the same great-great-grandfather, Ervad Jamshed Tata, a priest of Navsari.
JRD Tata was the second of four children. He was educated in France, Japan and England
before being drafted into the French army for a mandatory one-year period. JRD wanted to
extend his service in the forces but destiny had something else in store for him. By leaving
the French army JRD's life was saved because shortly thereafter, the regiment in which he
served was totally wiped out during an expedition in Morocco.
JRD Tata joined Tata & Sons as an unpaid apprentice in 1925. He has great interest in flying.
On February 10, 1929, JRD became the first Indian to pass the pilot's examination. With this
distinctive honor of being India's first pilot, he was instrumental in giving wings to India by
building Tata Airlines, which ultimately became Air India. His passion for flying was
fulfilled with the formation of the Tata Aviation Service in 1932.
In 1938, at the age of 34, JRD was elected Chairman of Tata & Sons making him the head of
the largest industrial group in India. He started with 14 enterprises under his leadership and
half a century later on July 26, 1988, when he left, Tata & Sons was a conglomerate of 95
enterprises which they either started or in which they had controlling interest.
JRD was the trustee of Sir Dorabji Tata Trust from its inception in 1932, which remained
under his wings for over half a century. Under his guidance, this Trust established Asia's first
cancer hospital, the Tata Memorial Center for Cancer, Research and Treatment, Bombay,
1941. It also founded the Tata Institute of Social Sciences, 1936 (TISS), the Tata Institute of
Fundamental Research, 1945 (TIFR), and the National Center for Performing Arts.
In 1948, JRD Tata launched Air India International as India's first international airline. In
1953, the Indian Government appointed JRD as Chairman of Air-India and a director on the
Board of Indian Airlines-a position JRD retained for 25-years. For his crowning
achievements in Aviation, JRD was bestowed with the title of Honorary Air Commodore of
India. In 1956, JRD Tata initiated a program of closer JRD
TATA "employee association with management" to give workers a stronger voice in the
affairs of the company. He firmly believed in employee welfare and espoused the principles
of an eight-hour working day, free medical aid, workers' provident scheme, and workmen's
accident compensation schemes, which were later, adopted as statutory requirements in
India. JRD Tata cared
34
greatly for his workers. In 1979, Tata Steel instituted a new practice; a worker is deemed to
be "at work" from the moment he leaves home for work till he returns home from work. The
company is financially liable to the worker if any mishap takes place on the way to and from
work. Tata Steel Township was also selected as a UN Global Compact City because of the
quality of life, conditions of sanitation, roads and welfare that were offered by Tata Steel.

JRD Tata received a number of awards. He received the Padma Vibhushan in 1957 on the
eve of silver jubilee of Air India. He also received the Guggenheim Medal for aviation in
1988. In 1992, because of his selfless humanitarian endeavors, JRD Tata was awarded
India's highest civilian honor, the Bharat Ratna-one of the rarest instances in which this
award was granted during a person's lifetime. In the same year, JRD Tata was also bestowed
with the United Nations Population Award for his crusading endeavors towards initiating
and successfully implementing the family planning movement in India, much before it
became an official government policy.
JRD Tata died in Geneva, Switzerland on November 29, 1993 at the age of 89. On his death,
the Indian Parliament was adjourned in his memory-an honor not usually given to persons
who are not Members of Parliament.

2.2 ORGANIZATION STRUCTURE

35
36
2.3. LIST OF KEY MANAGEMENT PERSONNEL

There is a difference between making money for oneself and creating wealth for others. This
is the story of a business house that has created wealth for a nation. It is a story of struggle,
anxiety, adventure and achievement. This is the story of our pioneers.
Jamsetji Tata: The Founder of the Tata group began with a textile mill in central India in
the 1870s. His powerful vision inspired the steel and power industries in India, set the
foundation for technical educaton, and helped the country leapfrog from backwardness to
the ranks of industrialised nations.

37
 Here are some articles and other material about the man and his deeds:
The giant who touched tomorrow: A profile
Standing tall: A tribute by historian Dwijendra Tripathi
Values are forever: Tata Sons director R Gopalakrishnan on
Jamsetji Tatas unique legacy
A man in full: Excerpts from the biography by Frank Harris
The quotable Jamsetji Tata: Quotes by and about the Tata Founder
A life in pictures: An interactive album
Sir Dorab Tata: Through his endeavours in setting up Tata Steel and Tata Power, this elder
son of Jamsetji Tata was instrumental in transforming his father's grand vision into reality. It
was also under his leadership that the Sir Dorabji Tata Trust, the premier charitable
endowment of the Tatas, was created, propelling the Tata tradition of
philanthropy.
More on Sir Dorabji Tata:
In the name of the father: A profile
Quotes by Sir Dorabji Tata
A leader of many parts
Snapshots
Sir Ratan Tata: Jamsetji Tata's younger son had a personality that reflected his sensitivity to
the struggles of ordinary people and his desire to utilise his considerable wealth to enhance
the quality of public life. A philanthropist all his life, he created a trust fund for "the
advancement of learning and for the relief of human suffering and other works of public
utility." The Sir Ratan Tata Trust is today the second largest of the Tata trusts.
More on Sir Ratan Tata:
More than businessman: A profile
Quotes by Sir Ratan Tata
Snapshots
JRD Tata: The late chairman of the Tata Group pioneered civil aviation on the subcontinent
in 1932 by launching the airline now known as Air India. That was the first of many path-
breaking achievements that JRD, who guided the destiny of the Group for more than half a
century, came to be remembered for.

38
Here are some articles and other material about JRD Tata:
Spirit of the skies: A profile
From here to eternity: Keshub Mahindra, the patriarch of the
Mahindra & Mahindra Group, remembers Jeh
Appro JRD: Sudha Murthy recalls an incident that shaped her life
One of a kind: Long-time associate Maneck Dalal on a multifaceted personality
A legend lives on: Ratan Tata pays tribute to the leader he succeeded
The JRD I knew: JJ Bhabha remembers JRDs contributions
JRD, the eternal icon: Tata veteran TR Doongaji on the shaping of a legend
The man behind the icon: SA Sabavala recalls a leader of many passions
Wings for a nation: Excerpts from RM Lalas The Creation of Wealth
A life in pictures: An interactive album
Naval Tata: Naval Tata's many contributions in the fields of business, sports administration
and labour relations symbolised all that is best in the Tata spirit of giving back to society and
the communities in which its enterprises grow.

Here are some articles and other material about Naval Tata:
A life lived from the heart: A profile
Keeper of the flame: Simone Tata, Naval Tatas wife, on a kind and humane spirit
My friend Naval: Business leader Ram S Tarneja on a man who thought beyond
profits
An August requiem: JK Setna remembers a gentleman and a friend
A life in pictures: An interactive album
Quotes by and about Naval Tata

Ratan N Tata

Ratan N Tata has been the Chairman of Tata Sons, the promoter holding company of the
Tata group, since 1991. He is also the Chairman of the major Tata companies, including Tata
Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata

39
Chemicals, Indian Hotels and Tata Teleservices. During his tenure, the groups revenues
have grown manifold, totalling over $83 billion in 2010-11.

Mr Tata also serves on the board of directors of Alcoa. He is also on the international
advisory boards of Mitsubishi Corporation, the American International Group, JP Morgan
Chase, Rolls Royce, Temasek Holdings and the Monetary Authority of Singapore.

Mr Tata is also associated with various organisations in India and overseas. He is the
Chairman of two of the largest private-sector-promoted philanthropic trusts in India. He is a
member of the Indian Prime Ministers Council on Trade and Industry. He is the President of
the Court of the Indian Institute of Science and Chairman of the Council of Management of
the Tata Institute of Fundamental Research. He also serves on the board of trustees of
Cornell University and the University of Southern California.

Mr Tata joined the Tata group in 1962. After serving in various companies, he was appointed
Director-in-charge of the National Radio and Electronics Company in 1971. In 1981, he was
named Chairman of Tata Industries, the groups other promoter holding company, where he
was responsible for transforming it into a group strategy think-tank, and a promoter of new
ventures in high technology businesses.

Mr Tata received a BS degree in architecture from Cornell in 1962. He worked briefly with
Jones and Emmons in Los Angeles before returning to India in late 1962. He completed the
Advanced Management Program at Harvard Business School in 1975.

The Government of India honoured Mr Tata with its second-highest civilian award, the
Padma Vibhushan, in 2008. He has also received honorary doctorates from several
universities in India and overseas.

40
2.4 CURRENT SALES, PRODUCT MIX

TATA PRODUCTS AND SERVICES FOR BUSINESSES

Advanced composites
Tata Advanced Materials (TAML) designs and manufactures advanced composites for the
aerospace, defence, medical electronics, telecom and the transportation sectors. In addition,
the company undertakes the engineering, application, and manufacture of prototypes and
testing of these composites.

2.5 MARKET POSITION

Known as progressive and forward thinking in its Corporate Social Responsibility (CSR)
initiatives for over 140 years, the Tata Groups past CSR initiatives have fallen under four
pillars: 1) Philanthropy, 2) Emergency Response, 3) Specific Community Initiatives, and 4)
Quality Management Practices. Supporting these pillars are a variety of programs that have
organically developed over the years to create an internal structure for executing the
organizations sustainability efforts. This situation occasionally creates challenges in
measuring effectiveness and economic benefits of CSR, which obscures the return on
investment (ROI) and could diminish future funding.
The ten year sustainability strategy is designed to complement the business growth of the
organization. This global growth will focus on the following industries: hotels, automobile,
steel, software consulting, energy, chemicals, tea, engineering, and communications. It will
target the following markets: Brazil, Canada, China, Gulf Cooperation Council (United Arab
Emirates, Saudi Arabia, Oman, Bahrain, Kuwait, and Qatar), Germany, the Netherlands,
South Africa, Sri Lanka, Thailand, the United Kingdom, United States, and Vietnam. To
continue its global growth while maintaining its practiced sustainability, Tata needs to

41
address creating and capturing value, while addressing uncertainty in its global sustainability
strategy.
Defining Sustainability for Tatas Future
In order for the ten year strategy to be developed, the definition of sustainability itself needs
to be refinement. Tatas current definition of sustainability was developed as part of a series
of group-wide meetings. Although Tata has had a great deal of success in preserving a
culture of sustainability, the rapid global expansion of the company threatened to dilute the
power of this working definition. Our team proposes a refined definition of sustainability:
Corporate Sustainability is a local, national, and global endeavor for creating long-
term economic, social and financial growth for the enterprise and its stakeholders.
This definition would be easier for Tata employees to internalize and will allow for
interpretational flexibility, as there are continually evolving worldwide definitions of
sustainability.1
Beyond a basic corporate definition, we recommend Tata promote the continuity of
sustainability innovation through a set of guiding principles, a Sustainability Credo, that
provides employees with a roadmap for evaluating social business practices. The Credo
below provides a concrete, measureable way to define the operation and implementation of
sustainability initiatives.
Tata must first seek parity and sustainable best practices across their collective group of
companies. Points of parity must be established to measure the success of sustainability
efforts over the next ten years. The Tata Group must leverage its areas of expertise across
all businesses going forward to enable the sustainable development of the entire group.
These efforts include consistent employee equality and management training programs,
centralized innovation practices that look at all major businesses, formalized water and
waste conservation policies for companies operating in particular regions, Leadership in
Energy and Environmental Design (LEED) certification for all new construction, and energy
efficiency initiatives for all existing buildings.

1
42
Figure 1: Tata Group Sustainability Cred

DECISION ANALYSIS
A thorough consideration of the impacts of the new TSS structure and its initiatives on both
internal and external stakeholders was conducted in the development of the recommended
ten year sustainability strategy. The current structure and coordination of sustainability
initiatives was a starting point for our analysis. After reviewing the current structure and
discovering a lack of continuity across business units in sustainability tracking and
reporting, our consultancy identified several options for creating a structure that would allow
implementation of the sustainability strategy. These options included: 1) scaling back social
initiatives, while focusing on the environmental efforts, 2) maintaining current structure in
India but giving directly to charities in expansion markets, and 3) creating a subsidiary that
houses the communications, tracking, and long-range sustainability efforts while allowing
individual business units to maintain ownership of short-term projects with an Economic
Value Added (EVA).
Critical issue consideration included ensuring leadership continuity, appropriateness for
global growth, sensitivity to shareholder reaction, meeting coordination challenges across
the entire enterprise, maintaining the corporate culture and commitment to sustainability
from the employee level through leadership, fostering innovation, and leveraging core
competencies. External considerations were also considered including impact on the ability
to raise capital, relationships with local governments and regulating bodies, Non-
Governmental Organizations (NGOs), and local community members.
43
2.6 DIRECT COMPETITORS

Mahindra and Mahindra

Aditya birla Group
Ahuja Brother

2.7 FUTURE PLANS

Tata currently has four pillars of sustainability within the organization Tata Trusts,
Tata Relief Committee (TRC), Tata Council for Community Initiatives (TCCI), and Tata
Quality Management Services (TQMS). Tata also has individual think tanks (such as
the Tata Chemicals Innovation Center) and initiatives each business silo, with annual
groupwide meetings devoted to sharing best practices. The individual responsibilities of
TCCI and TQMS overlap, although TCCIs functions are more organic and less rigid than
the TQMS process. This organizational structure can be rightly credited with maintaining
Tatas cultural core values. However, much of Tatas sustainability measurement is ad
hoc. An all-encompassing sustainability report is not currently being produced, leaving
uncertainty around the funding and returns of Tatas sustainable investments. Finally, this
loose four pillar structure is likely to become harder difficult to maintain and navigate
as the companys global growth continues.
One solution that would allow Tata to continue sustainability in its rapidly-expanding
operations is the creation of a company subsidiary devoted to social and environmental
stewardship. This subsidiary, TSS, would function like any other Tata business unit (Tata
Motors, Tata Chemical), except that it would operate at first as a cost center/support
function rather than a profit center. TSS would centralize a number of company
functions, including educational trusts, TRC, and TCCI. The subsidiary would have a
number of key functions (see Exhibit 1 in Appendix), including internal (and eventual
external) consultation support for sustainable initiatives, a division for social projects that
do not meet traditional definitions of EVA (as determined by TQMS), intra-company

44
knowledge sharing and training functions, a cross-functional innovation center, a
financial reporting & analysis and auditing unit (which would produce an annual
sustainability report), and an internal/external fundraising team. Some advantages of this
arrangement would include:
Centralized Consulting Support for All Business Units. TSS would have a heavily
staffed and funded group ensure that sustainability opportunities are promoted,
monitored, and cross-utilized between Tata businesses. In the medium-to-long term,
this same consulting function could be used externally to provide the same services as
consulting firms such as Blu Skye and Domani, effectively monetizing a Tata core
competency and providing funding for future internal sustainable initiatives.
Increased Transparency. TSSs reporting function would utilize outside auditors
and consultants to validate its numbers. Its social and environmental metrics would
cross all Tata organizations. Capitalization and financial information would be key to
providing outside stakeholders (especially shareholders) with a transparent view of
funding and returns for sustainability projects.
Financial Independence. The new subsidiary would be funded through a pool of
funds approach. This is analogous to US bond covenant contracts for dividend
payments. Just as bondholders want to control how profits are paid out of the firm,
shareholders who are skeptical of financial returns on sustainability would contract
with Tatas management to ensure that cash is infused into the subsidiary after certain
profit and dividend/stock buyback criteria are met. This would continue the
movement towards transparency in finances and satisfy all shareholder groups (those
who want the company to focus on sustainability regardless of profit and those who
are concerned about firm use of excess funds) and would ensure funding reserves for
sustainability in recessionary times.
Management Development. Management development would involve a significant
rotation in this subsidiary, and training on relevant sustainability practices and
measurements would be provided. This would not only ensure top managerial talent
in the group but also continue to spread ideas and best practices throughout the
organization after employee rotations are complete.
Fundraising Ease and Scalability. Tata has established itself as a forward-thinking
company that has often predated the Indian government (a major Tata shareholder) in
45
 key worker protection policies. With the increased transparency of TSS, Tata could
organize funding from employees, outside investors, and government agencies. This
fundraising power could help TSS duplicate the rapid growth of Tatas other lines.
TSS management ability, knowledge, and continued success help other donors
maximize the social and environmental impact of their contributions.
Strategic Continuity. Creating a separate business subsidiary and a document with
shareholders/stakeholders that details the funding and reporting processes for TSS
would ensure that the companys sustainability initiatives themselves are clear
throughout the organization and allow for quick implementation in the event of a
CEO leadership transition.
Consistency of Business Practices. Tata will need to maintain clear and consistent
treatment of employees, business partners, and NGOs in all of its worldwide markets.
TSS would maintain these standards and modify them with the Group Executive
Office (GEO) and Group Corporate Center (GCC).

46
 RESEARCH METHODOLOGY

Scope of the thesis work

Research methodology can be defined as, it is used to give a clear cut idea on what the
researcher is carrying out his or her research. In order to plan in a right point of time and
to advance the research work methodology makes the right platform to the researcher to
mapping out the research work in relevance to make solid plans.

More over methodology guides the researcher to involve and to be active in his or her
particular field of enquiry. Most of the situations the aim of the research and the research
topic wont be same at all time it varies from its objectives and flow of the research but
by adopting a suitable methodology this can be achieved.

Research Design:

According to Claire Seltiz, a research design is the arrangement of condition and

analysis of data in manner that aims to combine relevance to the research purpose with
economy in procedure.

Determining sources of Data:

There are two main sources of data

1. Primary data

2. Secondary data
47
Primary Data: It consists of original informations collected for specific

Purpose. Primary data for this research, data are collected through a direct source like
survey to obtain the first hand information is others resources are written below.

Survey.

Face to face interaction.

Secondary Data: It consists of information that already exists somewhere and has been
collected for some specific purpose in the study. The secondary data for this study is
collected from various sources like,

Books.

Website.

Newspaper.

Financial Magazine. ( weekly , business world etc)

SOURCES OF DATA
The main source of obtaining necessary data for the study was Secondary Data.
This study is empirical in nature and hence secondary data is used to conduct the
research. The data was collected from the Internet by exploring the Secondary
sources available on websites.

48
TYPES OF RESEARCH :-

SECONDARY DATA

Secondary Data: The secondary data constitutes of daily flows data which was
collected from websites respectively.

I will collect the Secondary data from following sources:-

Newspaper Hindustan Times, Times of India, Economic Times

Magazine - The Times. Harvard Business Review, 4Ps

Website/Internet from different website

Book Course book/ Philip Kotler

Notes- Professors Notes

PRIMARY DATA-

Questionnaires

TOOL USED-

Excel sheet, pie chart, and histogram

49
 CHAPTER-III

ANALYSIS AND FINDINGS

50
 1. Do you think Technology has direct impact in your life?

Yes
NO

This question gives us brief insight about what people thinking about the technology
changes in respective society out of 50 people, 86% people said they can feel technology
changes his/her life while 14% response dent said still no they doesnt feel that
technology made any impact on their lives.
Analysis of this question would give us brief idea about how technology impacted human
being life and what people think about it. Do they are associated with that changes or not.

51
2. Are you using Internet in your home or office?
Yes

NO

Using Internet

NO; 10%

Yes; 90%

In urban area of Delhi and NCR according to our survey 90% people are using internet
services either in home or in the office where as only rest of 10% people are actually not
using internet services either in office or home.
52
This question focused about the how many people are using internet service either in
home or in offices so we can project our demand for broad band in Delhi & NCR region.
We taken 50 people views in this survey which included south , north, west and east
Delhi also covers Gurgaon and Noida.

3. What factor do you think affects internet users to use Internet service?
Faster speed

easy availability of Internet connection

Charges of the Internet connection

Penetration of Computer in society.

Cant Say

Can't Say; 8% Monthly charges; 14%

Penetration of Computer in Society; 12%

Easy Availability of Internet Connection; 24%

Faster Speed; 42%

The survey result shown here about what all factor influenced internet users to use
internet services particular out of the office or home.
Our result suggested that 42% respondent believe if they got fast speed than he will use
internet otherwise they will not and it is one of the important characteristics of internet
users to promote this sector company need to ensure speed of the accessing internet also
24% respondent said behalf of our question easy availability of Internet connection is

53
also influencing his/her to use internet services in their home because leased some time
not available on their respective area so on that such front they required either Wi-Fi or
other way of Internet Indian consumer is always price sensitive and according to our
survey result 14% respondent replied there internet uses influenced because monthly
charges is very high also 12% respondent doesnt have Personal computer in their home
so the penetration of computer will also affect the uses of Internet in Delhi & NCR
region.

4 What are the problem areas while dealing with the customers? (You may tick more than
one):--

a Problem in closing sale

b Lack of product knowledge
c Customer Complaint
d Issues pertaining to discount on price
e Personal grooming and personality development of sales staff
f Communicating with the customers
a Attitude problem

54
Rating Scale about issue facing by Vendors

Problem In Closing Sales; 0%

20% Lack of Prodcut knowledge; 12%
customer Compaint; 9%
Communicating with the customer; 11%
Issue pertaining to Discount; 11%
Personal Grooming; 36%

Out of 300 vendors 36% are facing problem when they interact with the customer and
customer want discount when they are purchasing broadband connection we asked this
question because we just try to insure that which kind of challenges that vendors has
during the time of sells.

5.Do you think technological changes in Broadband Market will change the scenario in
coming days it boost the penetration of Internet also in Indian subcontinent?

55
 Yes No

1%

99%

We are trying and analyse that how many people are actually in favour of changing
technology would changes the broadband requirements although from survey result
suggested that 99% people are in favour of that technology has a huge impact on
broadband market while only 1% vendor replies that they are not thinking technological
impact would be boost the selling of broadband.

6. Had you heard about company TATA GroupPvt. Ltd.?

1 Yes

2 No

56
 Awareness about

No; 26%

Yes; 74%

Interpretation

TATA Group India has a very old presence in world wide while judging this statement we
did brief survey of 300 People and according to our out put the data 74% people are
actually aware about the TATA Group as a brand name and the TATA Group product.
While still 26% people still not aware about the TATA Group product

TATA Group need to focus to target 26% those people who doesnt know about the TATA
Group product. Customer satisfaction and loyalty would come if the customer aware
about the TATA Groups product so effectively only 74% customer who knew very well
what TATA Group doing in the Indian market and what product available is for the
customer.

57
If Yes

7 How you came to know about this company?

1 By Newspaper

2 By Friend

3 Other Means of Advertisement.

4 Others (Specify)

_________________________________________________

Awareness

Retailers; 4%
Hoarding; 23% Newspaper; 18%
By Friend; 8%
Self Research; 19% Means of Advertisement; 28%

58
Interpretation

How people got to know about the TATA Group product, there is various ways. Once

customer know about the company brand so for TATA Group in my project effective

people for the survey is 223 because they know about the TATA Groups brand name.

people got to know about the TATA Group from various parameter, like 23% people got

to know about the TATA Group through Hoarding while 28% people got to know from

the advertisement that is doing by the company while 19 % people knew TATA Groups

brand through the self research and news paper is only effective by the 18%.

Recommendation to increase awareness among the customer for TATA Group is TATA

Group can be focused more to hoarding advertisement rather than the news paper also

self research contributed maximum so TATA Group brand awareness so TATA Group

increase to advertise on internet, book etc.

8.How would you rate products of company?

1 Excellent

2 Very Good

3 Good

4 Poor

59
 Customer satisfaction from product

Poor; 13% Excellent; 15%

Good; 38% Very Good; 34%

Interpretation

Out of 223 valuable customer for our survey it seems that 15% rated TATA Groups
product as excellent in quality while 34% rated as very good experience that they have
while using TATA Groups product and 38% people are rated as good to using TATA
Groups product.

Recommendation about the TATA Group would be 13% people rated TATA Group
product as poor one so company need to focus on those area why people rate as a poor
why they perceive that TATA Group products quality is poor.

60
9.How would you rate services of the company?

1 Excellent

2 Very Good

3 Good

4 Poor

Customer satisfaction from Services

Poor; 22% Excellent; 22%

Good; 26% Very Good; 30%

Interpretation

61
Recent survey conducted by the Business standard and it shows customer satisfaction
also depends upon what is you sales after service strategy, according to our survey about
the TATA Group 22% people rated TATA Group as a excellent service provider while
30% rated it has very good sales after service support and 26% rated good for the service
to TATA Groups.

The concern area for TATA Group is 22% people who rated TATA Group service as a
poor one and not which is one of the area where customer are not satisfied so for the
TATA Group it need to be justify and fill the gap as soon as possible.

10 Did you find the products upto the standard or Marks as specified before
purchase?
1 Yes

2 No(Specify)__________________________________________________

Product Standard

No; 10%

Yes; 90%

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Interpretation
Before purchase customer are very cautious about the product quality and its standard in
the case of TATA Group about 90% people are happy with the kind of product quality that
they would received before purchasing the TATA Group product. While only 10% people
are not satisfied the product quality of TATA Group.

FINDINGS AND INFERENCES

63
Using TATA Group product with the other company product which gives insight to know
more about the competition level for the TATA Group now we got very surprisingly
result 98% people says yes while using TATA Group product they also using some other
company product. So kind of competition we can feel that TATA Group has. Only 2%
people using Kohler product. Which quite less than the other favorable out put
Being customer driven has become a business mantra these days. Customer loyalty is the
ultimate expression of customer driven business strategies. Loyalty is measured by
repeat purchase behavior and by attitudes. Loyal customers consider your total product
offering to be significantly better than your competitors.
Raising your percentage of loyal customers improves growth and market share. Loyal
customers buy your product over and over, while non-loyal customer simply defects to

64
your competitors. Defection lowers your market share and loyalty raises your market
share.
Customer loyalty takes into consideration customer satisfaction, brand loyalty, customer
relationship Management and among all these I believe this is mostly related to the later.
While this forms certainly a significant part of CRM, it is still debatable whether this is
an end route of customer relationship management.
In TATA Group case we first define what customer loyalty is. Of all the definitions that
could be a part of this write-up I would advocate for the following:
Customer loyalty is a TATA Group s ability to retain satisfied customers. Better and
faster issue resolution ensure strong loyalty. Information technology can help TATA
Group to achieve customer loyalty by providing tools for analyzing customer data to
assist in informed decision making, and managing customer relationships from the sales
process through to fulfillment and support.
TATA Group can achieve Customer Loyalty through giving valuable insights on most or
all of the following aspects :
1. Service Leadership
2. Customer & Employee Satisfaction Studies
3. Performance Management Systems
4. Marketing & Communication Strategies
5. Service Solutions
6. Customer Relationship Management Systems
But above all one should have a systematic strategic plan for improving upon customer
loyalty.
Though it takes a lot less money to increase TATA Group retention of current customers
than to find new ones-but normally companies don't give it as much effort as It should
because it does take a lot of energy and effort.
If TATA Group currently retain 70 percent of your customers and you start a program to
improve that to 80 percent, TATA Group add an additional 10 percent to your growth
rate.
Particularly because of the high cost of landing new customers versus the high
profitability of a loyal customer base, you might want to reflect upon your current
business strategy.
65
 LIMITATIONS

Many constraints were involved in doing this study. Some of them are as follows.
The most significant limitation has been the individuals involved in this study
were very busy and did not spare much time in discussion.
The sample size selected for the survey was too small as compared to large
population.
The project was carried out only in the Delhi, so findings on data gathered can be
best true for Delhi only and not applicable to other parts of state and country.

66
 RECOMMENDATION

This paper examines the patterns of India Business Ventures Abroad, bothin the form of
subsidiaries and joint ventures over a period of 50 years sinceindependence. The analysis
reveals that although there has been asignificant increase in the activity. The ventures,
however, have beenconcentrated to only a few, about a dozen, countries. The study also
showsthat there is a noticeable preference towards subsidiary mode of
operation.Further, there are country-wise patterns of preferences towards use of
jointventures and subsidiary modes. The study also reveals that there is asignificant shift
in the mix of activities, tilting from high risk manufacturingto low risk trading and
software development. It is also observed that there isa wide gap between the number of
ventures approved and actuallyimplemented. A comparison has also been drawn
between Indian BusinessVentures Abroad and the Foreign Business Ventures in India
during the preand the post-liberalisation era. This is complemented with the patterns
ofexport/ import ratio in the respective periods. The two together indicate thatthe reforms
in economic policies undertaken so far seems to be leading toIndia fast becoming a global
market rather than emerging as a global player.The paper then suggests that there is a
need for intensive studies fordeveloping policy and strategic interventions to strengthen
Indias business
ventures abroad and to help India emerge as a global player

67
CONCLUSION

The findings of the study raise certain important issues for consideration forthe policy
makers, researchers and industry professional. The analysis hereindicates that the total
number of Indian business ventures abroad approvedis growing. At the same time the
data indicates that enormous delay inimplementation or mortality rate may be high. Up
to 1995 only about 24%of the ventures approved were implemented. An analysis is
required for thesubsequent period, which could not be done due to paucity of data.The
patterns might have changed somewhat between 1995 and 1999, but itcan not be said on
the basis of data available that any radical change insituation would have taken place. It
is, therefore, necessary to study thereasons for the delays in implementation: what are
the problems,difficulties, roadblocks that are being faced by the Indian business, to
come out with concrete policy and strategic interventions.It has also been observed that
Indian business, both WOS and JVs modesare heavily concentrated in USA and U.K.
What could be reasons for it?Will it be desirable to concentrate only on these countries
and ignoreothers, especially the European and ASEAN countries. There is also aneed
for a study on the issues of "preferred destinations", whether it ishappening by default
or by design and what policy and strategicinterventions are needed to effect necessary
modifications for aligningIndian Business Ventures Abroad with the significant
developments in theworld trade.Industry and policy makers need scholarly support in
terms of extensiveand in-depth studies to understand what else holds Indian business
68
to goglobal and be a key player. In the last one decade, the government hasintroduced
many policy reforms like liberal policies on investment andmovement of natural persons
etc. to encourage firms to go for foreignventure. But the activity has not picked up as
much as expected, is limited tofew sectors and not commensurate wit the levels foreign
ventures in India.What can be done to push the globalization agenda and efforts? What
are theproblems, difficulties and roadblocks still being experienced? Is there anylack of
competitive skills? If so, what are they? Or, there are morefundamental issues of lack of
desire or mindsets of remaining a domesticplayer? These are some critical issues that
need closer examination foroffering remedial measures.
Another issue that needs immediate examination is whether the strategies ofglobalization
of Indian business have to be different from those of MNCsfrom the developed
countries, in the face of high costs of internationaloperations and adverse foreign
exchange ratios vis--vis developedcountries. India looks that perhaps has to proceed
through strategicalliances among the domestic players to share the costs and
informationabout the foreign markets. This difference in strategic approaches must be
appreciated to make any headway. The efficacy of such strategies needs tobe closely
examined and the modalities for operationalising the strategyhave to be thought through.
Following the approaches of MNCs from thedeveloped countries may not work and
may indeed prove to be counterproductive.

69
 APPENDICES

Questionnaires

1. Do you think Technology has direct impact in your life?

Yes

NO

2. Are you using Internet in your home or office?

Yes

NO

70
3. What factor do you think affects internet users to use Internet service?

Faster speed

easy availability of Internet connection

Charges of the Internet connection

Penetration of Computer in society.

Cant Say

4 What are the problem areas while dealing with the customers? (You may tick more than
one):--

a) Problem in closing sale

b) Lack of product knowledge

c) Customer Complaint

d) Issues pertaining to discount on price

e) Personal grooming and personality development of sales staff

f) Communicating with the customers

a) Attitude problem

71
5.Do you think technological changes in Broadband Market will change the scenario in
coming days it boost the penetration of Internet also in Indian subcontinent?

6. Had you heard about company TATA GroupPvt. Ltd.?

1 Yes

2 No

7 How you came to know about this company?

1 By Newspaper

2 By Friend

3 Other Means of Advertisement.

4 Others

8.How would you rate products of company?

1 Excellent

2 Very Good

3 Good

4 Poor

9.How would you rate services of the company?

72
 1 Excellent

2 Very Good

3 Good

4 Poor

10 Did you find the products upto the standard or Marks as specified before
purchase?
3 Yes

4 No(Specify)__________________________________________________

73
 Bibliography

Book & Journal

Harvard business Review
Wharton Business model for change Management
Public telephone exchange journal

Internet
www.atkerny .com
www.bsnl.com
www.KPMG .com
www.E&Y.com

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