DD: Scales of Business

Scales of business refers to the size of the business. 

1. Micro: The sector most encouraged in low income countries as it shows most promise for sustainable development, is potentially most viable for micro entrepreneurs and fills the most necessary niche in the economy is the initial processing of agricultural products. Where investment in plant and machinery doesn’t exceed 25 lakhs, or where service sector is concerned, 10 lakhs.
2. Small scale: Industries organized on a small scale and which produce goods with the help of small machines, hired labour and power. Capital resources invested on plant and machinery buildings have been the primary criteria to differentiate SSI from large and medium scale industries. Can be classified into registered and unregistered SSI.
3. Large scale: Those industries which require huge infrastructure, man power and influx of capital assets. Fixed asset of more than 100,000,000 rupees.
4. Public: Managed, owned and controlled by the government with a view to maximize social welfare and uphold public interest. Helps correct regional imbalances produced by the private sector being unwilling to move into certain fields, or attracted to more advantageous fields. 

Industrial sickness is defined all over the world as "an industrial company (being a company registered for not less than five years) which has, at the end of any financial year, accumulated losses equal to, or exceeding, its entire net worth and has also suffered cash losses in such financial year and the financial year immediately preceding such financial year." - Wikipedia (I'm lazy)

Incipient sickness: Continuous decline in gross output due to lack of demand and/ or shortage of working capital. 

BIFR - Board for Financial Reconstruction

BRPSE - Board for Reconstruction of Public Sector Enterprises 

IIP - Index of Industrial Production, used to measure industrial performance. 

MNC - Multinational Companies 

Corporation that has its management headquarters in one (home) country and operates in several other (host) countries.

MNCs typically go overseas because they possess some special advantage they want to exploit fully, on benefit from, such as avoiding barriers to import or employing cheaper foreign labor. 

Common models for MNCs

1. Positioning of executive headquarters in one nation while production facilities are located in one or more other countries: Allows the company to take advantage of benefits of incorporating in a given locality, while also being able to produce goods and services in areas where the cost of production is lower.
2. Basing the company in one nation and operating subsidiaries in other countries around the world: All functions of the parent company are in the country of origin, while the subsidiaries more or less function independently, outside of a few basic ties to the parent company.
3. Establishment of a HQ in one country which oversees a diverse conglomeration that stretches to many different countries and industries: includes affiliates, subsidiaries and even some facilities that report directly to HQ.

Disadvantages

1. Employment may not be as extensive as hoped – jobs may go to skilled workers from other countries rather than domestic workers.
2. MNCs may be footloose – locate in a country to gain the tax or grant advantage but move away when these run out – therefore no long term benefit.
3. Size and power of the multinationals can be used to exploit weak or corrupt governments. E.g.: Mittal in Liberia
4. Pollution and environmental damage – in countries with less rigorous regulatory authorities. E.g. Coca Cola in Kerala
5. De-Merit goods – production of non-beneficial good
6. Repatriation of profits
7. Outdated technology 
8. May charge heavy fees 
9. May develop monopolies 
10. May use resources recklessly 
11. Adverse effect on lifestyle/ culture: encouraging poorer people to buy things they don’t need
12. Avoid tax liabilities through transfer pricing - "In taxation and accounting, transfer pricing refers to the rules and methods for pricing transactions between enterprises under common ownership or control. Because of the potential for cross-border controlled transactions to distort taxable income, tax authorities in many countries can adjust intragroup transfer prices that differ from what would have been charged by unrelated enterprises dealing at arm’s length (the arm’s-length principle)." - Wikipedia
13. Brain drain in developing countries.