Competition Law- Effective Tool for Good Corporate Governance in India

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COMPETITION LAW
EFFECTIVE TOOL FOR GOOD CORPORATE GOVERNANCE IN INDIA

Submitted to Prof. I. Sridhar Legal Aspects of Business IIM Indore

By Vinod Kumar 2012FPM20 Section F IIM INDORE

TABLE OF CONTENTS
CONTENTS PAGE NO.

A. Introduction 1. Introduction...............................................................................................3 B. Analysis 2. Analysis of property rights in the case of tangibles................................4 3. Common features of Intellectual property rights...................................6 4. Common features of Intellectual property rights..................................12 5. The extension of property rights to new objects....................................15 C. Existing systems 6. Existing implementation of Intellectual property rights.......................18 D. Alternative Approaches 7. Alternatives to Intellectual property rights............................................20 E. Conclusion 8. Conclusion..................................................................................................28 F. References 9. References..................................................................................................30

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:Competition Law:
(Effective tool for good Corporate Governance in India)

1. Introduction
The relationship between the Corporate Governance and Competition is very complex, but crucial one to the design of appropriate economic policies, including Competition policy. This relationship between Competition and Corporate Governance explores how Governance structure of an organisation incorporate the policy of Competition and to identify the possible concerns which have come up in many jurisdictions in relations to Compliance Programmes. It is also relevant in the context of the economic crisis, as a failure can be triggered in the market if incentives are not aligned for the long term and instead focus on short term goals. Competition is typically regarded as the main force that disciplines firms by keeping them responsive to their markets, inducing them to adopt efficient practices (including good Corporate Governance arrangements) and encouraging them to maximize efficiency. The term ‘Corporate Governance’ means the set of institutional arrangements that lead managers to pursue shareholders interests rather than their own goals. The concept of corporate governance hinges on total transparency, integrity and accountability of the management and the board of directors. Corporate governance is concerned with set of principles, ethics, values, morals, rules regulations, & procedures etc. Corporate governance establishes a system whereby directors are entrusted with duties and responsibilities in relation to the direction of the company’s affairs. The importance of Corporate Governance lies in its contribution both to business prosperity and to accountability. In the age of globalization, global competition, good corporate governance helps as a great tool for corporate bodies. “Competition” can be defined as a process by which cost efficient production is achieved in a structure where entry and exit are easy, a reasonable number of players (producers and consumers are present) and close substitution between products of different players in a given industry exists. Competition amongst the various service providers results in improvement in availability of service at affordable price to the consumers which then 3|Page

benefits consumer. Competitive Markets needs accompanying Governance in order to prevent the self-destruction of Competition. Competitive markets generally represent the best available coordination mechanism for economic activities. More precisely, competitive markets contribute to optimal allocation, innovation, consumer sovereignty, economic freedom and flexibility and responsiveness of the economy. In contrast Corporate Governance primarily concerns the relationship between officers, directors and shareholders....
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