Madhusmita Kananika Pradhan Assgn - 1

7/31/2019 Madhusmita Kananika Pradhan Assgn - 1

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ASSIGNMENT- 1

PRESENTED BY:-MADHUSMITA KANANIKA PRADHAN

ROLL NO. 921DBBM0112


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Banking System

BB41

Q1.Why RBI is called bankers Bank. What are the important functions of RBI.

Q2. What is Retail & Merchant Banking? Explain its conceptual framework.

Macro Economics

BB42

Q1. Explain New Industrial Policy 1991.

Q2. Differentiate Balance of Payment & Balance of Trade.

Taxation & Laws

BB43

Q1. What do you mean by cost inflation index.

Q2. What do you mean by book profit &how do you calculate Book Profit?

Ent. & Small Business

BB44

Q1. Explain the role of entrepreneurship in economic development.

Q2. What is the importance of location in business?Case Study & Presentation

BB45

Q1. What is the Meaning of case study ? What are the advantages of case study

method?

Q2. How case study is useful to Business Research?


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Banking System

Q1.Why RBI is called bankers Bank. What are the important functions of RBI.

The Reserve Bank of India (RBI) (Hindi:) is India's central banking institution, whichcontrols themonetary policyof theIndian rupee. It was established on 1 April 1935 during the British Raj in

accordance with the provisions of the Reserve Bank of India Act, 1934. The share capital was divided into

shares of 100 each fully paid which was entirely owned by private shareholders in the

beginning.[2]

Following India's independence in 1947, the RBI was nationalised in the year 1949.

The RBI plays an important part in the development strategy of theGovernment of India. It is a member

bank of theAsian Clearing Union. The general superintendence and direction of the RBI is entrusted with

the 20-member-strong Central Board of DirectorstheGovernor(currentlyDuvvuri Subbarao), four Deputy

Governors, oneFinance Ministryrepresentative, ten Government-nominated Directors to represent

important elements from India's economy, and four Directors to represent Local Boards headquartered at

Mumbai, Kolkata, Chennai and New Delhi. Each of these Local Boards consist of five members who

represent regional interests, as well as the interests of co-operative and indigenous banks.

The Reserve Bank of India was founded on 1 April 1935 to respond to economic troubles after theFirst

World War,[3]

The Bank was set up based on the recommendations of the 1926 Royal Commission on

Indian Currency and Finance, also known as the HiltonYoung Commission.[4]The original choice for theseal of RBI was The East India CompanyDouble Mohur, with the sketch of the Lion and Palm Tree.

However it was decided to replace the lion with the tiger, the national animal of India. The Preamble of the

RBI describes its basic functions to regulate the issue of bank notes, keep reserves to secure monetary

stability in India, and generally to operate the currency and credit system in the best interests of the

country. The Central Office of the RBI was initially established in Calcutta (now Kolkata), but was

permanently moved to Bombay (now Mumbai) in 1937. The RBI also acted as Burma's central bank, except

during the years of theJapanese occupation of Burma(194245), until April 1947, even though Burma

seceded from the Indian Union in 1937. After thePartition of Indiain 1947, the Bank served as the central

bank forPakistanuntil June 1948 when theState Bank of Pakistancommenced operations. Though

originally set up as a shareholders bank, the RBI has been fully owned by theGovernment of Indiasince itsnationalization in 1949.

Central Board of Directors

The Central Board of Directors is the main committee of the central bank. TheGovernment of

Indiaappoints the directors for a four-year term. The Board consists of a governor, four deputy governors,

fifteen directors to represent the regional boards, one from the Ministry of Finance and ten other directors

from various fields.

Governors

The current Governor of RBI isDuvvuri Subbarao. The RBI extended the period of the present governor up

to 2013. There are four deputy governors, currently K. C. Chakrabarty, Subir Gokarn, Anand Sinha and

Harun Rashid Khan

Supportive bodies

The Reserve Bank of India has four regional representations: North in New Delhi, South in Chennai, East in

Kolkata and West in Mumbai. The representations are formed by five members, appointed for four years

by the central government and servebeside the advice of the Central Board of Directorsas a forum for

regional banks and to deal with delegated tasks from the central board.[24]The institution has 22 regional

offices.

The Board of Financial Supervision (BFS), formed in November 1994, serves as a CCBD committee to

control the financial institutions. It has four members, appointed for two years, and takes measures to
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strength the role of statutory auditors in the financial sector, external monitoring and internal controlling

systems.

TheTarapore committeewas set up by the Reserve Bank of India under the chairmanship of former RBI

deputy governor S. S. Tarapore to "lay the road map" tocapital account convertibility. The five-member

committee recommended a three-year time frame for complete convertibility by 19992000.

On 1 July 2007, in an attempt to enhance the quality of customer service and strengthen the grievance

redressal mechanism, the Reserve Bank of India created a newcustomer service department.Offices and branches

The Reserve Bank of India has 4 zonal offices.[25]

It has 19 regional offices at most state capitals and at a

few major cities in India. Few of them are located

inAhmedabad,Bangalore,Bhopal,Bhubaneswar,Chandigarh,Chennai,Delhi,Guwahati,Hyderabad,Jaipur,

Jammu,Kanpur,Kolkata,Lucknow,Mumbai,Nagpur,Patna, andThiruvananthapuram. Besides it has 09

sub-offices atAgartala,Dehradun,Gangtok,Kochi,Panaji,Raipur,Ranchi,ShimlaandSrinagar.

The bank has also two training colleges for its officers, viz. Reserve Bank Staff College at Chennai and

College of Agricultural Banking atPune. There are also fourZonal Training

CentresatBelapur,Chennai,Kolkataand New Delhi.Bank of Issue

Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue bank notes of all

denominations. The distribution of one rupee notes and coins and small coins all over the country is

undertaken by the Reserve Bank as agent of the Government. The Reserve Bank has a separate Issue

Department which is entrusted with the issue of currency notes. The assets and liabilities of the Issue

Department are kept separate from those of the Banking Department. Originally, the assets of the Issue

Department were to consist of not less than two-fifths of gold coin, gold bullion or sterling securities

provided the amount of gold was not less than 40 crore ( 400 million) in value. The remaining three-

fifths of the assets might be held in rupee coins, Government of India rupee securities, eligible bills of

exchange and promissory notes payable in India. Due to the exigencies of the Second World War and thepost-war period, these provisions were considerably modified. Since 1957, the Reserve Bank of India is

required to maintain gold and foreign exchange reserves of 200 crore ( 2 billion), of which at least 115

crore ( 1.15 billion)should be in gold and 85 crore ( 850 million) in the form of Government

Securities.[citation needed]

The system as it exists today is known as the minimum reserve system.

Monetary authority

The Reserve Bank of India is the main monetary authority of the country and beside that the central bank

acts as the bank of the national and state governments. It formulates, implements and monitors the

monetary policy as well as it has to ensure an adequate flow of credit to productive sectors. Objectives are

maintaining price stability and ensuring adequate flow of credit to productive sectors. The nationaleconomy depends on the public sector and the central bank promotes an expansive monetary policy to

push the private sector since the financial market reforms of the 1990s.[27]

The institution is also the regulator and supervisor of the financial system and prescribes broad parameters

of banking operations within which the country's banking and financial system functions. Objectives are to

maintain public confidence in the system, protect depositors' interest and provide cost-effective banking

services to the public. The Banking Ombudsman Scheme has been formulated by the Reserve Bank of India

(RBI) for effective addressing of complaints by bank customers. The RBI controls the monetary supply,

monitors economic indicators like thegross domestic productand has to decide the design of the rupee

banknotes as well as coins.[28]
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_Bank_of_India#cite_note-RBI1-28http://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-RBI1-28http://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-RBI1-28http://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-27http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Zonal_Training_Centrehttp://en.wikipedia.org/wiki/Zonal_Training_Centrehttp://en.wikipedia.org/wiki/Zonal_Training_Centrehttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Srinagarhttp://en.wikipedia.org/wiki/Shimlahttp://en.wikipedia.org/wiki/Ranchihttp://en.wikipedia.org/wiki/Raipurhttp://en.wikipedia.org/wiki/Panajihttp://en.wikipedia.org/wiki/Kochihttp://en.wikipedia.org/wiki/Gangtokhttp://en.wikipedia.org/wiki/Dehradunhttp://en.wikipedia.org/wiki/Agartalahttp://en.wikipedia.org/wiki/RBI_Thiruvananthapuramhttp://en.wikipedia.org/wiki/Patnahttp://en.wikipedia.org/wiki/Nagpurhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Lucknowhttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Kanpurhttp://en.wikipedia.org/wiki/Jammuhttp://en.wikipedia.org/wiki/Jaipurhttp://en.wikipedia.org/wiki/Hyderabad,_Indiahttp://en.wikipedia.org/wiki/Guwahatihttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Chandigarhhttp://en.wikipedia.org/wiki/Bhubaneswarhttp://en.wikipedia.org/wiki/Bhopalhttp://en.wikipedia.org/wiki/Bangalorehttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Reserve_Bank_of_India#cite_note-25http://en.wikipedia.org/w/index.php?title=Customer_service_department&action=edit&redlink=1http://en.wikipedia.org/wiki/Capital_account_convertibilityhttp://en.wikipedia.org/wiki/Tarapore_committee


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Manager of exchange control

The central bank manages to reach the goals of the Foreign Exchange Management Act, 1999. Objective: to

facilitate external trade and payment and promote orderly development and maintenance of foreign

exchange market in India.

Issuer of currency

The bank issues and exchanges or destroys currency and coins not fit for circulation. The objectives are

giving the public adequate supply of currency of good quality and to provide loans tocommercial bankstomaintain or improve the GDP. The basic objectives of RBI are to issue bank notes, to maintain the currency

and credit system of the country to utilize it in its best advantage, and to maintain the reserves. RBI

maintains the economic structure of the country so that it can achieve the objective of price stability as

well as economic development, because both objectives are diverse in themselves.

Q2. What is Retail & Merchant Banking? Explain its conceptual framework.

This paper develops a conceptual framework for analyzing fundamental institutional changes in the

global financial system. The framework's objectives are to improve our understanding of how and why

financial institutions change, to make accurate predictions about how they are likely to evolve in thefuture, and to guide business strategy and public policy in this arena.

The key element in the framework is its reliance on functions rather than on institutions as the

conceptual anchor. Hence, it is called thefunctional perspective. It rests on two basic premises:

1. Financial functions are more stable than financial institutions that is, functions change less over

time and vary less across borders.

2. Institutional form follows function that is, innovation and competition among institutions

ultimately result in greater efficiency in the performance of financial system functions.

This functional perspective is used to explore some of the key public-policy issues facing the global

financial system. The issues addressed include: risk accounting, regulation of OTC derivatives, deposit

insurance reform, pension reform and privatization, international harmonization of regulatory policies,and innovations in macro-stabilization policy.

Financial markets and intermediaries today are globally linked through a vast international

telecommunications network, so that the trading of securities and the transfer of payments go on more

or less continuously around the clock. The financial markets include the foreign exchange, fixed income,

and equity markets, as well as the new and growing markets for derivative securities such as

futures, options, and swaps. Capital market functions are also performed by financial intermediaries

such as banks and insurance companies, which provide customized products and services -- the kind

that do not lend themselves to the standardization necessary to support a liquid market.

For a variety of reasons --including differences in size, complexity, and available technology, as wellas differences in political, cultural, and historical backgrounds -- financial institutions generally differ

across borders. They also change over time. Even when the names of institutions are the same, the

functions they perform often differ dramatically. For example, banks in the United States today are very

different from what they were in 1925 or in 1955, and banks in the United States today are very

different from the institutions called banks in Germany or the United Kingdom today.

In this paper we try our hand at setting forth a unifying conceptual framework for understanding

how and why the institutional structure of the financial system changes and how it is likely to evolve in

the future.2 The key element in the framework is its focus on functions rather than on institutions as the

conceptual anchor. Hence, we call it the functional perspective. It rests on two basic premises:

Financial functions are more stable than financial institutions -- that is, functions change less over timeand vary less across borders.

Institutional form follows function -- that is, innovation and competition among institutions ultimately
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result in greater efficiency in the performance of financial system functions.3

The paper develops the functional perspective and gives an overview of its range of application.

Applicability of the functional perspective ranges widely, from analysis of the entire financial system to

individual business strategy decisions and specific public policy choices. We distinguish four levels of

analysis: system-level, institution-level, activity-level, and product-level.

The evolution of the financial system is described as an innovation spiral, in which organized

markets and intermediaries compete with each other in a static sense and complement each other in a

dynamic sense. The functional perspective views financial innovation as driving the financial systemtoward the goal of greater economic efficiency.4 Technological advances that have already resulted in

dramatically reduced transaction costs and advances in the theory and practice of finance that rely on

low transactions costs, are likely to produce wide-ranging institutional changes in the future. We sketch

the broad outlines of some of those changes.

From the most aggregated level of the single primary function of resource allocation, we distinguish

six basic or core functions performed by the financial system:

To provide ways of clearing and settling payments to facilitate trade.

To provide a mechanism for the pooling of resources and for the subdividing of shares in various

enterprises.

To provide ways to transfer economic resources through time, across borders, and amongindustries.

To provide ways of managing risk.

To provide price information to help coordinate decentralized decision-making in various sectors of

the economy.

To provide ways of dealing with the incentive problems created when one party to a transaction has

information that the other party does not or when one party acts as agent for another.

The six chapters to follow offer in-depth descriptions, analyses, and illustrations of each of the core

functions of the financial system. A final chapter discusses the evolving infrastructure and regulation of

the global financial system in the future.

Change and Diversity in the Global Financial System

We know that people have engaged in financial transactions since the dawn of recorded history.

Sumerian documents reveal the systematic use of credit for agricultural and other purposes in

Mesopotamia around 3,000 BC. Barley and silver served as a medium of exchange -- i.e., money.

Even regulation of financial contracts existed in ancient times. Hammurabi's Code contains many

sections relating to the regulation of credit in Babylon around 1,800 BC.5

Banking institutions arose in the city-state of Genoa in the 12th Century AD, and flourished there

and in Florence and Venice for several centuries. These banks took demand deposits and made loans to

merchants, princes, and towns. Security issues similar to their modern form also originated in the Italian

city states in the late Middle Ages. Long-term loans floated by the Republic of Venice, called the

prestiti, were a popular form of investment in the 13th and 14th Centuries, and their market price was a

matter of public record. Even organized exchanges for trading financial futures contracts and other

financial derivatives, which some see as an innovation of the 1980s, are not entirely new. Similar

contracts were widely traded on the Amsterdam securities exchange in the 1600s.6

As this little bit of history makes clear, some things have not changed. Financial activities, such as

borrowing, investing in securities, and other forms of financial contracting are very old indeed.


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Macro Economics

Q1. Explain New Industrial Policy 1991.

Pandit Jawaharlal Nehru laid the foundations of modern India. His vision and determination have left a

lasting impression on every facet of national endeavour since Independence. It is due to his initiative that

India now has a strong and diversified industrial base and is a major industrial nation of the world. The

goals and objectives set out for the nation by Pandit Nehru on the eve of Independence, namely, the rapid

agricultural and industrial development of our country, rapid expansion of opportunities for gainfulemployment, progressive reduction of social and economic disparities, removal of poverty and attainment

of self-reliance remain as valid today as at the time Pandit Nehru first set them out before the nation. Any

industrial policy must contribute to the realisation of these goals and objectives at an accelerated pace.

The present statement of industrial policy is inspired by these very concerns, and represents a renewed

initiative towards consolidating the gains of national reconstruction at this crucial stage.

2. In 1948, immediately after Independence, Government introduced the Industrial Policy Resolution. This

outlined the approach to industrial growth and development. It emphasised the importance to the

economy of securing a continuous increase in production and ensuring its equitable distribution. After the

adoption of the Constitution and the socio-economic goals, the Industrial Policy was comprehensively

revised and adopted in 1956. To meet new challenges, from time to time, it was modified throughstatements in 1973, 1977 and 1980.

3. The Industrial Policy Resolution of 1948 was followed by the Industrial Policy Resolution of 1956 which

had as its objective the acceleration of the rate of economic growth and the speeding up of

industrialisation as a means of achieving a socialist pattern of society. In 1956, capital was scarce and the

base of entrepreneurship not strong enough. Hence, the 1956 Industrial Policy Resolution gave primacy to

the role of the State to assume a predominant and direct responsibility for industrial development.

4. The Industrial Policy statement of 1973, inter alia, identified high-priority industries where investment

from large industrial houses and foreign companies would be permitted.

5. The Industrial Policy Statement of 1977 laid emphasis on decentralisation and on the role of small-scale,

tiny and cottage industries.

6. The Industrial Policy Statement of 1980 focused attention on the need for promoting competition in the

domestic market, technological upgradation and modernisation. The policy laid the foundation for an

increasingly competitive export based and for encouraging foreign investment in high-technology areas.

This found expression in the Sixth Five Year Plan which bore the distinct stamp of Smt. Indira Gandhi. It was

Smt. Indira Gandhi who emphasised the need for productivity to be the central concern in all economic and

production activities.

7. These policies created a climate for rapid industrial growth in the country. Thus on the eve of the

Seventh Five Year Plan, a broad-based infrastructure had been built up. Basic industries had been

established. A high degree of self-reliance in a large number of items - raw materials, intermediates,

finished goods - had been achieved. New growth centres of industrial activity had emerged, as had a new

generation of entrepreneurs. A large number of engineers, technicians and skilled workers had also been

trained.

8. The Seventh Plan recognised the need to consolidate on these strengths and to take initiatives to

prepare Indian industry to respond effectively to the emerging challenges. A number of policy and

procedural changes were introduced in 1985 and 1986 under the leadership of Shri Rajiv Gandhi aimed at

increasing productivity, reducing costs and improving quality. The accent was on opening the domestic

market to increased competition and readying our industry to stand on its own in the face of international

competition. The public sector was freed from a number of constraints and given a larger measure of

autonomy. The technological and managerial modernisation of industry was pursued as the key instrument

for increasing productivity and improving our competitiveness in the world. The net result of all these

changes was that Indian industry grew by an impressive average annual growth rate of 8.5% in the SeventhPlan period.


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9. Government is pledged to launching a reinvigorated struggle for social and economic justice, to end

poverty and unemployment and to build a modern, democratic, socialist, prosperous and forward-looking

India. Such a society can be built if India grows as part of the world economy and not in isolation.

10. While Government will continue to follow the policy of self-reliance, there would be greater emphasis

placed on building up our ability to pay for imports through our own foreign exchange earnings.

Government is also committed to development and utilisation of indigenous capabilities in technology and

manufacturing as well as its upgradation to world standards.

11. Government will continue to pursue a sound policy framework encompassing encouragement ofentrepreneurship, development of indigenous technology through investment in research and

development, bringing in new technology, dismantling of the regulatory system, development of the

capital markets and increasing competitiveness for the benefit of the common man. The spread of

industrialisation to backward areas of the country will be actively promoted through appropriate

incentives, institutions and infrastructure investments.

12. Government will provide enhanced support to the small-scale sector so that it flourishes in an

environment of economic efficiency and continuous technological upgradation.

13. Foreign investment and technology collaboration will be welcomed to obtain higher technology, to

increase exports and to expand the production base.

14. Government will endeavour to abolish the monopoly of any sector or any individual enterprise in anyfield of manufacture, except on strategic or military considerations and open all manufacturing activity to

competition.

15. The Government will ensure that the public sector plays its rightful role in the evolving socio-economic

scenario of the country. Government will ensure that the public sector is run on business lines as envisaged

in the Industrial Policy Resolution of 1956 and would continue to innovate and lead in strategic areas of

national importance. In the 1950s and 1960s, the principal instrument for controlling the commanding

heights of the economy was investment in the capital of key industries. Today, the State has other

instruments of intervention, particularly fiscal and monetary instruments. The State also commands the

bulk of the nation's savings. Banks and financial institutions are under State control. Where State

intervention is necessary, these instruments will prove more effective and decisive.

16. Government will fully protect the interests of labour, enhance their welfare and equip them in all

respects to deal with the inevitability of technological change. Government believes that no small section

of society can corner the gains of growth, leaving workers to bear its pains. Labour will be made an equal

partner in progress and prosperity. Workers' participation in management will be promoted. Workers

cooperatives will be encouraged to participate in packages designed to turn around sick companies.

Intensive training, skill development and upgradation programmes will be launched.

17. Government will continue to visualise new horizons. The major objectives of the new industrial policy

package will be to build on the gains already made, correct the distortions or weaknesses that may have

crept in, maintain a sustained growth in productivity and gainful employment and attain international

competitiveness. The pursuit of these objectives will be tempered by the need to preserve the

environment and ensure the efficient use of available resources. All sector of industry whether small,

medium or large, belonging to the public, private or cooperative sector will be encouraged to grow and

improve on their past performance.

18. Government's policy will be continuity with change.

19. In pursuit of the above objectives, Government have decided to take a series of initiatives in respect of

the policies relating to the following areas.

Q2. Differentiate Balance of Payment & Balance of Trade.

Basis ofDifference

Balance of Trade (BOT) Balance of Payment (BOP)


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What is Cost Inflation Index(CII)?

It is a measure of inflation that finds application in tax law, when computing long-termcapital gainson sale

of assets. Section 48 of the Income-Tax Act defines the index as what is notified by the Central Government

every year, having regard to 75 per cent of average rise in the consumer price index (CPI) for urban non-

manual employees for the immediately preceding previous year.

How does CII help in capital gains computation? Capital gain, as you know, arises when

the net sale consideration of a capital asset is more than the cost. Since cost of acquisition is historical,

the concept of indexed cost allows the taxpayer to factor in the impact of inflation on cost. Consequently, a

lower amount of capital gains gets to be taxed than if historical cost had been considered in the

computations.

Formula for computing indexed cost is (Index for the year of sale/ Index in the year of acquisition) x cost.

For example, if a property purchased in 1991-92 for Rs 10 lakh were to be sold now for Rs 40 lakh, indexed

cost = (519/199) x 10 = Rs 26.08 lakh. And the long-term capital gains would be Rs 13.92, that is Rs 40 lakhminus Rs 26.08 lakh.

It is a measure of inflation that finds application in tax law, when computing long-term capital gains on sale

of assets. Section 48 of the Income-Tax Act defines the index as what is notified by the Central Government

every year, having regard to 75 per cent of average rise in the consumer price index (CPI) for urban non-

manual employees for the immediately preceding previous year. Therefore, if we consider that price of a

capital asset has risen in tandem with base price rise, then if one want to sell an asset and replace it, the

cost allowed even after indexation will be lesser than the price payable for new asset. However, in case of

many capital asset the price rise is lesser than market price and in many cases it is higher.

Q2. What do you mean by book profit &how do you calculate Book Profit?

Most writers have no idea how much money they can expect when their book is published. The formula,

however, is fairly straightforward. To begin with, a writer generally receives an advance. An advance is

payment, in advance, based on the expected initial earnings of the book. It is a negotiable amount, but

once the publisher pays this to the writer, the advance belongs to the writer whether or not the book ever

sells a copy. Advances range from a few thousand dollars to over a million dollars for well-known celebritywriters. If you are an unknown writer, your advance should range from nothing to about twenty-thousand

dollars in the United States. Some first time-writers negotiate more, but that is the usual range.

In order to make the writer more money than the advance, a book has to sell well. If it does, your payment

as the author comes from royalties, which you can calculate using the system below. A book that sells

moderately well, but is not a bestseller, may or may not make the author a few extra thousand dollars.

Royalties (ranging from 4% to 8% in most cases) are generally based on the cover price of the book, but

that does not include books that are discounted or remaindered. So, for the sake of argument, say you sold

20,000 full-price copies of a paperback priced at $7 (I know it would more likely be $6.95 but I am going to

use round numbers.

If your royalty percentage were a generous 8% you would make a total of $11,200.
http://www.flipkart.com/books/8170948231?affid=suthukrishhttp://www.flipkart.com/books/8170948231?affid=suthukrishhttp://www.flipkart.com/books/8170948231?affid=suthukrishhttp://www.thinkplaninvest.com/wp-content/uploads/2009/05/cii.jpghttp://www.flipkart.com/books/8170948231?affid=suthukrish


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Now remember that your advance is an advance on these royalties, so your publisher would subtract the

initial advance from the $11,200. If your initial advance equaled $10,000 you would eventually receive

$1,200 in additional royalties. An author who makes a total of $50,000 or more from a fiction book should

consider himself or herself to be doing very well. For the sake of argument, however, let us say that Oprah

Winfrey chooses your book for her book club and you sell 500,000 copies of your book. With this same

formula, at 8% you would make $280,000 and would have no trouble finding a publisher and getting a big

advance for your next book.

Surprisingly, the publisher does not make most of the money from your book. The party that makes the

most money off the sale of a book is the retailer. By the time a publisher pays all of the related expenses of

publishing a book (production, distribution, salaries, promotion, etc.), they generally clear a profit of about

a dollar a book for a book with sales of about 20,000. Therefore, the publisher made more than you, but

not that much more and they took on all the risk. Remember, if the book never sells a copy, you still get to

keep your advance.

For this reason, the market for mid-range books (under 100,000 copy sellers) is very tough, and major

publishers are looking for books they expect to sell in large numbers. This is why it is hard to get a fiction

book published in todays market. A first-time author or even an author with modest previous sales is

going to have a hard time finding a publisher. When they do, they can expect very little by way ofpromotion because the publisher expects so little return for their investment.

If you do get your book published, and you want it to sell well, be prepared to spend a great deal of your

own time marketing the book. Most authors think it should be up to the publisher to promote the sale of

the book, but the author is the one who really needs to be out there making phone calls to bookstores,

lining up press interviews and setting up readings and signings.

In all most all the partnership ,provision for salary has been included and decided with mutual consent .But

as per Income Tax Act ,full amount of salary is not allowed as expenses in profit & loss account but salary is

restricted to % of profit before salary to the partner.There are some conditions also which are to be

complied to claim deduction of salary as expense in P & L account of partnership firm.

Conditions are defined in section 40(b) of the income tax act.

1. Salary should be paid to working partner.2. Salary must be written/authorised by the Partnership deed3. Salary should be related to the period after the partnership deed date.4. Salary must be with in limit of % of Book profit.

Salary here means: salary ,commission ,remuneration (or any name whatever name called)

1.Salary must be with in limit of % of Book profit.

Salary here means: salary ,commission ,remuneration (or any name whatever name called)

Now detail of each condition.

1. Working partner: salary to sleeping partner is not allowed .and working partner definition has been

given in explanation 4 of the section 40(b)

working partner means an individual who is actively engaged in conducting the affairs of thebusiness or profession of the firm of which he is a partner

From above definition it is clear that " full time" attendance to any or all of the tasks of the partnership .


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2.Salary must be written/authorised by the Partnership deed:To claim the expense of salary of partner in

p& L salary should be authorised by the partnership deed and it should also be according to the

conditions/terms defined in the partnership deed.

Clause in partnership should be clear and amount should be defined. Board has issued a circular also related to clause in partnership deed for salary to partners

Ent. & Small Business

Q1. Explain the role of entrepreneurship in economic development.The influence of the role of

entrepreneurship on economic development has been explained by a number of authors (e.g. Audretsch

and Acs, 2003; Reynolds, 2000). Conditioned by a number of forces and factors (incl. legal, institutional,

cultural, societal etc.), the role of entrepreneurship has been different across countries. Development of

new member states can be characterized as a distinctive experience that started 15 years ago and where

entrepreneurship has been assessed as a driving force of decentralisation, economic restructuring and

movement in the direction of market economy (e.g. Smallbone et al., 1996). As countries vary markedly in

a way they regulate and provide an environment for enterprises, Estonia is an interesting case with its

notably open small economy, extremely liberal economic policy and the ability to stay on the economic

growth trend during the last 10 years. For that reason it is needful to better understand and analyse the

contribution of SMEs to economic development over the last decade as well as new firms formation as an

important indicator of entrepreneurial activity in the country. It is needful also to analyse the main

constraints hindering new business start-ups in Estonia. For eliminating these constraints it would be

needful to find appropriate policy measures to support the development of entrepreneurship in the

country. In Estonia, development of enterprise sector has been assessed in general as a positive factor in

economic development since the early years of transition, based on the fast growth of enterprises and the

role of SMEs in generation of employment (Smallbone et al, 1999; Venesaar, 1999; Estonia country, 2002;

Smallbone & Venesaar, 2004). A number of studies have been carried out in Estonia about regional

development of small enterprises, which have evaluated differences in socio-economic development

across regions, sources of regional problems, analysed possible policy strategy choices, use of support from

foreign donors (Regional, 1996; Estonia Country, 2002; Raagmaa, 1996; Kudela & Venesaar, 1999). In

those studies, a kind of success from establishing a support system and participation of foreign assistance

in this has been mentioned. The studies about manufacturing SMEs in transition countries and the

influence of internationalisation have helped to find out the contribution of SMEs to economic

development, characteristics in firms' behaviour and their support needs for future development

(Smallbone et al., 1996, 1999). In recent years, some studies have been made to assess the results of

measures implemented as entrepreneurship support policies and to identify more precisely entrepreneurs

demands in the country as a whole as well as in different regions (e.g. Jrgenson et al, 2003; Eesti, 2005).

But the role of SMEs during such a long period and activity on firm formation rates across counties and

economic activities have been studied less thoroughly, which will be a contribution of the current article

into the entrepreneurship studies in Estonia. There is a wide-spread opinion that national or regional

economic development is associated with new firms creation intensity. New firms formation is considered

as an important indicator of entrepreneurial activity and key component in economic development and

growth, which has been explained by the creation of new capacities into the market and through

improvement of the competitiveness of the economy, industry or region (Fritsch & Mueller, 2004). There is

a number of empirical studies to show that new firms have a significant role to play in employment

generation (e.g. Baptista et al, 2005; Stel & Suddle, 2005), innovation (e.g. Fritsch & Mueller, 2005),

economic growth and reduction of unemployment. Consequently resulting from different impact of these

roles several surveys have indicated spatial variations in business formation rates by countries as well as

within countries (Bartelsman et al, 2004; Reynolds, 2002; Johnson, 2004). It is therefore important forevery region (e.g. county) to understand more thoroughly the reasons of spatial variations, which may


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have important implications for entrepreneurship policy. For policy interest it is needful to know, how to

increase the activity of firm formation rates in regions (counties). The aim of the current article is to assess

the SME contribution to the economic development through employment generation, creation of added

value, GDP, export activities etc. Next, the empirical analysis is directed to the examination of regional firm

formation activity, focusing on their differences compared with the average firm formation rates in the

country and to understand why such variations exist. A firm formation analysis in counties and among

sectors is studied for explaining the regional differences. Relying on the results of analysis the research

tries to find implications for entrepreneurship promotion policy. The paper is based on empiricalevidence drawn from the database of the National Tax Board and of two large-scale telephone surveys

undertaken in 2002 and 2005, supplemented by a review of secondary data from other studies conducted

in Estonia.

Q2. What is the importance of location in business?

L o c a t i o n

You might have heard people say that location is the most important thing for a business. Then, the next

most important is ... location, and so on. For many businesses, getting the right location can make the

difference between success and failure. Can think of a shop or restaurant near where you live that has

closed down, maybe because it was in the wrong place? There are lots of different reasons why location isimportant to a business and location matters to some businesses much more than it does to others. Here

are some reasons why location matters.

Labor

Workers must be available locally, or must be willing to travel to work at the business.

These workers must have the right skills.

If there is high unemployment locally, you might find it easier to recruit workers, and maybe you won't

have to pay them as much as you would elsewhere.

But if there is high unemployment, local people may not have as much to spend with your business.

Often a location becomes a centre for related industries Staffordshire for potteries, Sheffield for steel,

and the local people have particular skills.

Land/buildings

The right amount and type of land and buildings must be available.

For some businesses, you need a lot of space - perhaps your business is noisy or creates fumes and needs

to be well away from where people live.

Some businesses need to be near their customers, or to their suppliers.

Transport and communications links

Your workers need to be able to travel to work.

You might need to be able to transport materials and products in and

out of your business.

Telephone, postal and Internet services might be better in cities than in

the countryside.

Natural resources

Primary industries need to be sited near to natural resources.

Because of the costs of transport of raw materials, secondary businesses may also be sited close to

resources that are important to their businesses.

Customers

Every business needs to be able to reach its customers.

For a retail shop, you might want potential customers to be walking pastall the time.


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An Internet business might be able to locate almost anywhere!

Language

As businesses become more global, you need people who can speak the same language as your

customers. This is one reason why, for example, India has been successful in attracting call centers and

software development from the UK and North America.

Image

Some businesses need to be in a location that suits their image.

Remember, though, high class locations tend to have high rents!Competitors

In some cases, you might want to be the only business of your type nearby - perhaps this would be good

for a petrol station or a news agent.

Other businesses cluster together - restaurants in Soho or Chinatown, fashion shops and jewelers on

Bond Street.

Case Study & Presentation

Q1. What is the Meaning of case study ? What are the advantages of case study method?

A case study is an intensive analysis of an individual unit (e.g., a person, group, or event) stressingdevelopmental factors in relation to context.

[1]The case study is common insocial sciencesandlife

sciences. Case studies may be descriptive or explanatory. The latter type is used to explore causation in

order to find underlying principles.[2][3]They may beprospective(in which criteria are established and cases

fitting the criteria are included as they become available) orretrospective(in which criteria are established

for selecting cases from historical records for inclusion in the study).

Thomas[4]offers the following definition of case study: "Case studies are analyses of persons, events,

decisions, periods, projects, policies, institutions, or other systems that are studied holistically by one or

more methods. The case that is the subjectof the inquiry will be an instance of a class of phenomena that

provides an analytical frame an object within which the study is conducted and which the case

illuminates and explicates."

Rather than using samples and following a rigid protocol (strict set of rules) to examine limited number of

variables, case study methods involve an in-depth, longitudinal (over a long period of time) examination of

a single instance or event: a case. They provide a systematic way of looking at events, collectingdata,

analyzinginformation, and reporting the results. As a result the researcher may gain a sharpened

understanding of why the instance happened as it did, and what might become important to look at more

extensively in future research. Case studies lend themselves to both generating and testinghypotheses.[5]

Another suggestion is that case study should be defined as a research strategy, an empirical inquiry that

investigates a phenomenon within its real-life context. Case study research can mean single and multiple

case studies, can include quantitative evidence, relies on multiple sources of evidence, and benefits fromthe prior development of theoretical propositions. Case studies should not be confused withqualitative

researchand they can be based on any mix of quantitative and qualitative evidence.Single-subject

researchprovides the statistical framework for making inferences from quantitative case-study

data.[3][6]

This is also supported and well-formulated in (Lamnek, 2005): "The case study is a research

approach, situated between concrete data taking techniques and methodologic paradigms."

Case selection and structure

An average, or typical, case is often not the richest in information. In clarifying lines of history and

causation it is more useful to select subjects that offer an interesting, unusual or particularly revealing set

of circumstances. A case selection that is based on representativeness will seldom be able to produce

these kinds of insights. When selecting a subject for a case study, researchers will therefore use

information-oriented sampling, as opposed torandom sampling.[5]

Outliercases (that is, those which are
http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg11-0http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg11-0http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg11-0http://en.wikipedia.org/wiki/Social_scienceshttp://en.wikipedia.org/wiki/Social_scienceshttp://en.wikipedia.org/wiki/Social_scienceshttp://en.wikipedia.org/wiki/Life_scienceshttp://en.wikipedia.org/wiki/Life_scienceshttp://en.wikipedia.org/wiki/Life_scienceshttp://en.wikipedia.org/wiki/Life_scienceshttp://en.wikipedia.org/wiki/Case_study#cite_note-1http://en.wikipedia.org/wiki/Case_study#cite_note-1http://en.wikipedia.org/wiki/Case_study#cite_note-1http://en.wikipedia.org/wiki/Prospective_cohort_studyhttp://en.wikipedia.org/wiki/Prospective_cohort_studyhttp://en.wikipedia.org/wiki/Prospective_cohort_studyhttp://en.wikipedia.org/wiki/Retrospectivehttp://en.wikipedia.org/wiki/Retrospectivehttp://en.wikipedia.org/wiki/Retrospectivehttp://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Informationhttp://en.wikipedia.org/wiki/Informationhttp://en.wikipedia.org/wiki/Informationhttp://en.wikipedia.org/wiki/Hypotheseshttp://en.wikipedia.org/wiki/Hypotheseshttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Single-subject_researchhttp://en.wikipedia.org/wiki/Single-subject_researchhttp://en.wikipedia.org/wiki/Single-subject_researchhttp://en.wikipedia.org/wiki/Single-subject_researchhttp://en.wikipedia.org/wiki/Case_study#cite_note-Yin-2http://en.wikipedia.org/wiki/Case_study#cite_note-Yin-2http://en.wikipedia.org/wiki/Case_study#cite_note-Yin-2http://en.wikipedia.org/wiki/Random_samplinghttp://en.wikipedia.org/wiki/Random_samplinghttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Outlierhttp://en.wikipedia.org/wiki/Outlierhttp://en.wikipedia.org/wiki/Outlierhttp://en.wikipedia.org/wiki/Outlierhttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Random_samplinghttp://en.wikipedia.org/wiki/Case_study#cite_note-Yin-2http://en.wikipedia.org/wiki/Case_study#cite_note-Yin-2http://en.wikipedia.org/wiki/Single-subject_researchhttp://en.wikipedia.org/wiki/Single-subject_researchhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Hypotheseshttp://en.wikipedia.org/wiki/Informationhttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Retrospectivehttp://en.wikipedia.org/wiki/Prospective_cohort_studyhttp://en.wikipedia.org/wiki/Case_study#cite_note-1http://en.wikipedia.org/wiki/Case_study#cite_note-1http://en.wikipedia.org/wiki/Life_scienceshttp://en.wikipedia.org/wiki/Life_scienceshttp://en.wikipedia.org/wiki/Social_scienceshttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg11-0


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extreme, deviant or atypical) reveal more information than the putatively representative case.

Alternatively, a case may be selected as a key case, chosen because of the inherent interest of the case or

the circumstances surrounding it. Or it may be chosen because of researchers' in-depth local knowledge;

where researchers have this local knowledge they are in a position to soak and poke as Fenno[7]

puts it,

and thereby to offer reasoned lines of explanation based on this rich knowledge of setting and

circumstances.

Three types of cases may thus be distinguished:

1. Key cases2. Outlier cases3. Local knowledge cases

Whatever the frame of reference for the choice of the subject of the case study (key, outlier, local

knowledge), there is a distinction to be made between the subject and the object of the case study. The

subject is the practical, historical unity[8]

through which the theoretical focus of the study is being

viewed. The object is that theoretical focus the analytical frame. Thus, for example, if a researcher were

interested in US resistance to communist expansion as a theoretical focus, then the Korean War might be

taken to be the subject, the lens, the case study through which the theoretical focus, the object, could be

viewed and explicated.[9]

Beyond decisions about case selection and the subject and object of the study, decisions need to be made

about purpose, approach and process in the case study. Thomas[4]

thus proposes a typology for the case

study wherein purposes are first identified (evaluative or exploratory), then approaches are delineated

(theory-testing, theory-building or illustrative), then processes are decided upon, with a principal choice

being between whether the study is to be single or multiple, and choices also about whether the study is to

be retrospective, snapshot or diachronic, and whether it is nested, parallel or sequential. It is thus possible

to take many routes through this typology, with, for example, an exploratory, theory-building, multiple,

nested study, or an evaluative, theory-testing, single, retrospective study. The typology thus offers many

permutations for case study structure.For more on case selection, see[1]

Generalizing from case studies

A critical case can be defined as having strategic importance in relation to the general problem. A critical

case allows the following type of generalization, If it is valid for this case, it is valid for all (or many) cases.

In its negative form, the generalization would be, If it is not valid for this case, then it is not valid for any

(or only few) cases.

The case study is also effective for generalizing using the type of test thatKarl Poppercalledfalsification,

which forms part of critical reflexivity.[5]Falsification is one of the most rigorous tests to which a scientific

proposition can be subjected: if just one observation does not fit with the proposition it is considered notvalid generally and must therefore be either revised or rejected. Popper himself used the now famous

example of, "All swans are white," and proposed that just one observation of a singleblack swanwould

falsify this proposition and in this way have general significance and stimulate further investigations and

theory-building. The case study is well suited for identifying "black swans" because of its in-depth

approach: what appears to be "white" often turns out on closer examination to be "black."

Galileo Galileis rejection ofAristotles law of gravity was based on a case study selected by information-

oriented sampling and not random sampling. The rejection consisted primarily of a conceptual experiment

and later on of a practical one. These experiments, with the benefit of hindsight, are self-evident.

Nevertheless, Aristotles incorrect view of gravity dominated scientific inquiry for nearly two thousand

years before it was falsified. In his experimental thinking, Galileo reasoned as follows: if two objects with

the same weight are released from the same height at the same time, they will hit the ground
http://en.wikipedia.org/wiki/Case_study#cite_note-6http://en.wikipedia.org/wiki/Case_study#cite_note-6http://en.wikipedia.org/wiki/Case_study#cite_note-7http://en.wikipedia.org/wiki/Case_study#cite_note-7http://en.wikipedia.org/wiki/Case_study#cite_note-7http://en.wikipedia.org/wiki/Case_study#cite_note-8http://en.wikipedia.org/wiki/Case_study#cite_note-8http://en.wikipedia.org/wiki/Case_study#cite_note-8http://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://flyvbjerg.plan.aau.dk/Publications2006/0604FIVEMISPUBL2006.pdfhttp://flyvbjerg.plan.aau.dk/Publications2006/0604FIVEMISPUBL2006.pdfhttp://flyvbjerg.plan.aau.dk/Publications2006/0604FIVEMISPUBL2006.pdfhttp://en.wikipedia.org/wiki/Karl_Popperhttp://en.wikipedia.org/wiki/Karl_Popperhttp://en.wikipedia.org/wiki/Karl_Popperhttp://en.wikipedia.org/wiki/Falsificationhttp://en.wikipedia.org/wiki/Falsificationhttp://en.wikipedia.org/wiki/Falsificationhttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Black_swanhttp://en.wikipedia.org/wiki/Black_swanhttp://en.wikipedia.org/wiki/Black_swanhttp://en.wikipedia.org/wiki/Galileo_Galileihttp://en.wikipedia.org/wiki/Galileo_Galileihttp://en.wikipedia.org/wiki/Aristotlehttp://en.wikipedia.org/wiki/Aristotlehttp://en.wikipedia.org/wiki/Aristotlehttp://en.wikipedia.org/wiki/Aristotlehttp://en.wikipedia.org/wiki/Galileo_Galileihttp://en.wikipedia.org/wiki/Black_swanhttp://en.wikipedia.org/wiki/Case_study#cite_note-Flyvbjerg06-4http://en.wikipedia.org/wiki/Falsificationhttp://en.wikipedia.org/wiki/Karl_Popperhttp://flyvbjerg.plan.aau.dk/Publications2006/0604FIVEMISPUBL2006.pdfhttp://en.wikipedia.org/wiki/Case_study#cite_note-Thomas-3http://en.wikipedia.org/wiki/Case_study#cite_note-8http://en.wikipedia.org/wiki/Case_study#cite_note-7http://en.wikipedia.org/wiki/Case_study#cite_note-6


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simultaneously, having fallen at the same speed. If the two objects are then stuck together into one, this

object will have double the weight and will according to the Aristotelian view therefore fall faster than the

two individual objects. This conclusion seemed contradictory to Galileo. The only way to avoid the

contradiction was to eliminate weight as a determinant factor for acceleration in free fall. Galileos

experimentalism did not involve a large random sample of trials of objects falling from a wide range of

randomly selected heights under varying wind conditions, and so on. Rather, it was a matter of a single

experiment, that is, a case study.[5]

Galileos view continued to be subjected to doubt, however, and the Aristotelian view was not finally

rejected until half a century later, with the invention of the air pump. The air pump made it possible to

conduct the ultimate experiment, known by every pupil, whereby a coin or a piece of lead inside a vacuum

tube falls with the same speed as a feather. After this experiment, Aristotles view could be maintained no

longer. What is especially worth noting, however, is that the matter was settled by an individual case due

to the clever choice of the extremes of metal and feather. One might call it a critical case, for if Galileos

thesis held for these materials, it could be expected to be valid for all or a large range of materials. Random

and large samples were at no time part of the picture. However it was Galileo's view that was the subject

of doubt as it was not reasonable enough to be the Aristotelian view. By selecting cases strategically in this

manner one may arrive at case studies that allow generalization.[5]

The case study paradox

Case studies have existed as long as recorded history. Much of what is known about the empirical world

has been produced by case study research, and many of the classics in a long range of disciplines are case

studies, including in psychology, sociology, anthropology, history, education, economics, political science,

management, geography, biology, and medical science. Half of all articles in the top political science

journals use case studies, for instance. But there is a paradox here, as argued by Oxford professor Bent

Flyvbjerg. At the same time that case studies are extensively used and have produced canonical works, one

may observe that the case study is generally held in low regard, or is simply ignored, within the academy.

Statistics on courses offered in universities confirm this. It has been argued that the case study paradox

exists because the case study is widely misunderstood as a research method. Flyvbjerg argues that byclearing the misunderstandings about the case study, the case study paradox may be resolved.[1]

Misconceptions

Fly vbjerg identified five common misunderstandings about case-study research:[5]

1. General, theoretical knowledge is more valuable than concrete, practical knowledge.2. One cannot generalize on the basis of an individual case and, therefore, the case study cannot

contribute to scientific development.

3. The case study is most useful for generating hypotheses, whereas other methods are more suitablefor hypotheses testing and theory building.

4. The case study contains a bias toward verification, i.e., a tendency to confirm the researcherspreconceived notions.

5. It is often difficult to summarize and develop general propositions and theories on the basis ofspecific case studies.

These statements can be said to represent the cautionary view of case studies in conventional philosophy

of science. Flyvbjerg argued that these statements are too categorical, and argued for the value of

phenomenological insights gleaned by closely examining contextual "expert knowledge".
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Q2. How case study is useful to Business Research?

Introduction

Case study research excels at bringing us to an understanding of a complex issue or object and can extend

experience or add strength to what is already known through previous research. Case studies emphasize

detailed contextual analysis of a limited number of events or conditions and their relationships.

Researchers have used the case study research method for many years across a variety of disciplines. Social

scientists, in particular, have made wide use of this qualitative research method to examine contemporaryreal-life situations and provide the basis for the application of ideas and extension of methods. Researcher

Robert K. Yin defines the case study research method as an empirical inquiry that investigates a

contemporary phenomenon within its real-life context; when the boundaries between phenomenon and

context are not clearly evident; and in which multiple sources of evidence are used (Yin, 1984, p. 23).

Critics of the case study method believe that the study of a small number of cases can offer no grounds for

establishing reliability or generality of findings. Others feel that the intense exposure to study of the case

biases the findings. Some dismiss case study research as useful only as an exploratory tool. Yet researchers

continue to use the case study research method with success in carefully planned and crafted studies of

real-life situations, issues, and problems. Reports on case studies from many disciplines are widelyavailable in the literature.

This paper explains how to use the case study method and then applies the method to an example case

study project designed to examine how one set of users, non-profit organizations, make use of an

electronic community network. The study examines the issue of whether or not the electronic community

network is beneficial in some way to non-profit organizations and what those benefits might be.

Many well-known case study researchers such as Robert E. Stake, Helen Simons, and Robert K. Yin have

written about case study research and suggested techniques for organizing and conducting the research

successfully. This introduction to case study research draws upon their work and proposes six steps that

should be used:

Determine and define the research questions Select the cases and determine data gathering and analysis techniques Prepare to collect the data Collect data in the field Evaluate and analyze the data Prepare the reportStep 1. Determine and Define the Research Questions

The first step in case study research is to establish a firm research focus to which the researcher can

refer over the course of study of a complex phenomenon or object. The researcher establishes the

focus of the study by forming questions about the situation or problem to be studied and determining

a purpose for the study. The research object in a case study is often a program, an entity, a person, or a

group of people. Each object is likely to be intricately connected to political, social, historical, and

personal issues, providing wide ranging possibilities for questions and adding complexity to the case

study. The researcher investigates the object of the case study in depth using a variety of data

gathering methods to produce evidence that leads to understanding of the case and answers the

research questions.


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Case study research generally answers one or more questions which begin with "how" or "why." The

questions are targeted to a limited number of events or conditions and their inter-relationships. To

assist in targeting and formulating the questions, researchers conduct a literature review. This review

establishes what research has been previously conducted and leads to refined, insightful questions

about the problem. Careful definition of the questions at the start pinpoints where to look for evidence

and helps determine the methods of analysis to be used in the study. The literature review, definition

of the purpose of the case study, and early determination of the potential audience for the final report

guide how the study will be designed, conducted, and publicly reported.

Step 2. Select the Cases and Determine Data Gathering and Analysis Techniques

During the design phase of case study research, the researcher determines what approaches to use in

selecting single or multiple real-life cases to examine in depth and which instruments and data

gathering approaches to use. When using multiple cases, each case is treated as a single case. Each

cases conclusions can then be used as information contributing to the whole study, but each case

remains a single case. Exemplary case studies carefully select cases and carefully examine the choices

available from among many research tools available in order to increase the validity of the study.

Careful discrimination at the point of selection also helps erect boundaries around the case.

The researcher must determine whether to study cases which are unique in some way or cases which

are considered typical and may also select cases to represent a variety of geographic regions, a variety

of size parameters, or other parameters. A useful step in the selection process is to repeatedly refer

back to the purpose of the study in order to focus attention on where to look for cases and evidence

that will satisfy the purpose of the study and answer the research questions posed. Selecting multiple

or single cases is a key element, but a case study can include more than one unit of embedded analysis.

For example, a case study may involve study of a single industry and a firm participating in that

industry. This type of case study involves two levels of analysis and increases the complexity and

amount of data to be gathered and analyzed.

A key strength of the case study method involves using multiple sources and techniques in the data

gathering process. The researcher determines in advance what evidence to gather and what analysis

techniques to use with the data to answer the research questions. Data gathered is normally largely

qualitative, but it may also be quantitative. Tools to collect data can include surveys, interviews,

documentation review, observation, and even the collection of physical artifacts.

The researcher must use the designated data gathering tools systematically and properly in collecting

the evidence. Throughout the design phase, researchers must ensure that the study is well constructed

to ensure construct validity, internal validity, external validity, and reliability. Construct validity requires

the researcher to use the correct measures for the concepts being studied. Internal validity (especially

important with explanatory or causal studies) demonstrates that certain conditions lead to other

conditions and requires the use of multiple pieces of evidence from multiple sources to uncover

convergent lines of inquiry. The researcher strives to establish a chain of evidence forward and

backward. External validity reflects whether or not findings are generalizable beyond the immediate

case or cases; the more variations in places, people, and procedures a case study can withstand and

still yield the same findings, the more external validity. Techniques such as cross-case examination and

within-case examination along with literature review helps ensure external validity. Reliability refers to

the stability, accuracy, and precision of measurement. Exemplary case study design ensures that the

procedures used are well documented and can be repeated with the same results over and over again.


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Step 3. Prepare to Collect the Data

Because case study research generates a large amount of data from multiple sources, systematic

organization of the data is important to prevent the researcher from becoming overwhelmed by the

amount of data and to prevent the researcher from losing sight of the original research purpose and

questions. Advance preparation assists in handling large amounts of data in a documented and

systematic fashion. Researchers prepare databases to assist with categorizing, sorting, storing, and

retrieving data for analysis.

Exemplary case studies prepare good training programs for investigators, establish clear protocols and

procedures in advance of investigator field work, and conduct a pilot study in advance of moving into

the field in order to remove obvious barriers and problems. The investigator training program covers

the basic concepts of the study, terminology, processes, and methods, and teaches investigators how

to properly apply the techniques being used in the study. The program also trains investigators to

understand how the gathering of data using multiple techniques strengthens the study by providing

opportunities for triangulation during the analysis phase of the study. The program covers protocols for

case study research, including time deadlines, formats for narrative reporting and field notes,

guidelines for collection of documents, and guidelines for field procedures to be used. Investigators

need to be good listeners who can hear exactly the words being used by those interviewed.

Qualifications for investigators also include being able to ask good questions and interpret answers.

Good investigators review documents looking for facts, but also read between the lines and pursue

collaborative evidence elsewhere when that seems appropriate. Investigators need to be flexible in

real-life situations and not feel threatened by unexpected change, missed appointments, or lack of

office space. Investigators need to understand the purpose of the study and grasp the issues and must

be open to contrary findings. Investigators must also be aware that they are going into the world of real

human beings who may be threatened or unsure of what the case study will bring.

After investigators are trained, the final advance preparation step is to select a pilot site and conduct a

pilot test using each data gathering method so that problematic areas can be uncovered and corrected.

Researchers need to anticipate key problems and events, identify key people, prepare letters of

introduction, establish rules for confidentiality, and actively seek opportunities to revisit and revise the

research design in order to address and add to the original set of research questions.

4. Collect Data in the Field

The researcher must collect and store multiple sources of evidence comprehensively and

systematically, in formats that can be referenced and sorted so that converging lines of inquiry and

patterns can be uncovered. Researchers carefully observe the object of the case study and identify

causal factors associated with the observed phenomenon. Renegotiation of arrangements with theobjects of the study or addition of questions to interviews may be necessary as the study progresses.

Case study research is flexible, but when changes are made, they are documented systematically.

Exemplary case studies use field notes and databases to categorize and reference data so that it is

readily available for subsequent reinterpretation. Field notes record feelings and intuitive hunches,

pose questions, and document the work in progress. They record testimonies, stories, and illustrations

which can be used in later reports. They may warn of impending bias because of the detailed exposure

of the client to special attention, or give an early signal that a pattern is emerging. They assist in

determining whether or not the inquiry needs to be reformulated or redefined based on what is being

observed. Field notes should be kept separate from the data being collected and stored for analysis.


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Maintaining the relationship between the issue and the evidence is mandatory. The researcher may

enter some data into a database and physically store other data, but the researcher documents,

classifies, and cross-references all evidence so that it can be efficiently recalled for sorting and

examination over the course of the study

Evaluate and Analyze the Data

The researcher examines raw data using many interpretations in order to find linkages between theresearch object and the outcomes with reference to the original research questions. Throughout the

evaluation and analysis process, the researcher remains open to new opportunities and insights. The

case study method, with its use of multiple data collection methods and analysis techniques, provides

researchers with opportunities to triangulate data in order to strengthen the research findings and

conclusions.

The tactics used in analysis force researchers to move beyond initial impressions to improve the

likelihood of accurate and reliable findings. Exemplary case studies will deliberately sort the data in

many different ways to expose or create new insights and will deliberately look for conflicting data to

disconfirm the analysis. Researchers categorize, tabulate, and recombine data to address the initial

propositions or purpose of the study, and conduct cross-checks of facts and discrepancies in accounts.

Focused, short, repeat interviews may be necessary to gather additional data to verify key observations

or check a fact.

Specific techniques include placing information into arrays, creating matrices of categories, creating

flow charts or other displays, and tabulating frequency of events. Researchers use the quantitative data

that has been collected to corroborate and support the qualitative data which is most useful for

understanding the rationale or theory underlying relationships. Another technique is to use multiple

investigators to gain the advantage provided when a variety of perspectives and insights examine the

data and the patterns. When the multiple observations converge, confidence in the findings increases.

Conflicting perceptions, on the other hand, cause the researchers to pry more deeply.

Another technique, the cross-case search for patterns, keeps investigators from reaching premature

conclusions by requiring that investigators look at the data in many different ways. Cross-case analysis

divides the data by type across all cases investigated. One researcher then examines the data of that type

thoroughly. When a pattern from one data type is corroborated by the evidence from another, the finding

is stronger. When evidence conflicts, deeper probing of the differences i

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