| Topic : Activity Based Costing and Management |
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Accountablility by Government bodies
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Activity:
3 comments
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last activity : 04 18 2011 11:30:00 +0000
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What Indian Business Education don’t provide for the Environment.
Value generated and transacted in Business is the hallmark and pillar of the skill generated from a Business education. A business when it sell products in India, they don’t worry about the affordability of their wares by the masses let alone functionality which may be part of it.
A business incurs around 40% of fixed cost component along with may be 30% variable cost and probably the rest as ‘conversion cost’. What Business education teach us and what is followed in Efficient economies is they fix a breakeven point say 100 units of sale. These 100 units will provide the years cost incurred. After this point they will start giving discounts say 10% or so, so that more of products will move at lowered costs.
If products are priced far above these three costs then the demand will subside and the production line will stagnate even for normal production.
Two things are required in the environment for this process to work. One is ‘buying power’ for citizen and ‘transparent business processes’. If the government don’t provide the first through political-will of ‘endowing citizen’ then the companies will find it risky to price their products at the original value imbued in it because expandability of market for their product will become a problem. This too is one reason inflation is part of every body’s life in an economy like India.
Also, if business are old family run times, they who settled on ‘captive channels’ and ‘market’ modern business practices tend to become riskier for them for the above reason. So modern business trained personal tend to be a liability than an asset for Indian organization, in planning and daily administration throughout.
So, one has no choice other than request organizations to lobby the government to ‘endow the citizen’ so that modern business practices can be incorporated into business, so that externalities like high inflation can be slowed down. Moreover ones the citizen get endowed the present infrastructure of the economy need to be expanded so that ‘modern business practices’ which can make the Economy more efficient can be incorporated in Business environement.
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