Social and Cultural Environment

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Social and Cultural Environment 
 

Business is an integral part of the social system. Social factors are among the most important factors which affect business. The type of products to be manufactured and marketed, the marketing strategies to be employed, the way the business should be organized and governed, the value and norms it should adhere to etc. all influenced by the social structure and culture of a society.

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What is Culture? 
 

Culture may be defined as the behaviour of man as a member of society. It is the habit acquired by belief, knowledge of arts, moral, law and It is socially sanctioned behaviour of people.

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Cultural Factors/ Social Structure 4 .

sentiments. beliefs. 5 . festivals etc. Religion also play a role in deciding in weekly holiday. other holidays and working hours.Religion and Caste      Different people have their own religious convictions. The cost of ignoring certain religious aspects could be effect organizational existence in international business. Many business decisions in India and in several other countries are based on astrological advices. customs. rituals. Religion may also influence the attitude towards work and wealth.

6 .Language    Differences in the language is a very important problem area in business. Same words of a language have different meanings or connotations in different places. Non-verbal communications create equally perhaps even more difficult problems.

Many companies modify their products and promotion strategies to suite the tastes and preferences or other characteristics of the population of the different countries.Consume preferences. Consumption     What is liked by people of one culture may not be liked by those of other culture. Consumption habits and demand patterns vary greatly from one market to another. Beliefs. 7 . Habits. The values and beliefs associated with colour vary significantly between different cultures.

8 . marriage. socialization of the child etc.Family System       Family is a social institution. family businesses are slowly turning into limited companies. Concerns itself with love. Nuclear families have now become common in our society replacing the traditional joint family system. Children have become spenders instead of earners. With big families being broken up. Women now enjoy equal status with men and most of them supplement family income by their own earnings. sexual relationship.

festivals. naming ceremony of child. These have implications for many types of business like textiles. have significant effect on business. consumer durables etc. catering. 9 .Customs   The customs of marriage. jewellery. dress sense etc.

death rates were high on account of poor diets and absence of effective medical aid. and improvement of transport. In the second stage. These changes affect the business organizations interms of availability of skilled labour. death rates were less on account of improved diets. In the third stage of transition people started to shift from rural areas to industrial and commercial centers. wage policy etc. 10 .Demographic Transition     In the first stage of transition.

Savings    Savings habits of consumer also affect the organization. It may favorably affect some organization and on the other hand it may adversely affect the other business organization. 11 . Increased saving habits of the consumer leads to the capital formation and even it boosts the banking sector.

12 . ways of conducting meetings etc affect business organization.Etiquettes  The ways of meeting and greeting people methods of showing respect.

Many cultural bahaviours are handed down by one·s parents. teachers and other elders.Cultural Transmission    The elements of culture are transmitted among the members of the society . it is obvious that certain old elements are dropped as new ideas and traits are aquired. 13 . In the cultural transition. from one generation to the next and to new the new members admitted into the family.

Impact of Culture on Business 14 .

Culture determines Goods and Services   Culture broadly determines the type of goods and services a business should produce.1. 15 . the beverages they drink and the building material they use. the clothes they wear. vary from culture to culture and from time to time with in the same culture. The type of food people eat.

People·s attitude are based on how well business contribute to society. 16 .2. Business systems are a product of beliefs and customs of society in which they exist. People·s attitude to Business    Attitude of people towards business is largely determined by their culture.

17 . morale and other related aspects of human resource management are based on the workers attitude to their work. Attitude to Work  Motivation.3.

Culture creates people  The concept of culture is of great significance to business because it is the culture which generally determines the activities of the people  18 .4.

Collectivism and Individualism   The spirit of collectivism and individualism is related to such personnel aspects as employee morale. It is said that ´ our culture Stresses individualism. multiplicity of trade unions and inter and intra-union rivalries.5. 19 .

20 .6. Ambitions and complacent   An individuals ambition to grow or remain complacent depends on cultural factors. Majority of our people are know to be complacent.

7. Education    The close interface of business and higher education is a new development. Industrial societies of today are knowledge and Educational oriented. Education is considered as one of the social overheads that has been accorded due priority among the developmental activities. 21 .

´ In order to effectively adopt. create and also to confirm a culture. the business people should have a thorough knowledge of the cultural environment.µ  This will be useful to the management of the business in several ways- 22 .

by observing their cultural background.   People generally are conditioned to behave in a particular way and perform their work in a particular method. 23 . the businessmen can easily predict their future behaviour in the event of introducing a new product. Awareness of cultural background will enable the business to quickly change the product to suit the needs o the changing soviety. So awareness of their culture will help to understand their behaviour and conduct.

24 . This will help in making quick decisions. The business managers should develop a sensitivity to the culture of the society in which they operate.

men. business has definite responsibility towards society.  Business depends on society for existence.  Being so much dependent. and encouragement.Social responsibility of Business Business depends on the society on the society for the needed inputs like money. and skills.  25 . sustenance.

for the benefit of the societyµ 26 .What is Social Responsibility? ´ Obligation of business to take actions which protect and improve the welfare of society as a whole along with its own interestsµ ´ What business does. over and above the statutory requirement.

Social Responsibility in Business Early 20th Century Middle 20th Century Early 21st Century Maximize Profits Provide Jobs and Pay Taxes Balance Profits and Social Issues 27 .

Dimensions of Social Responsibilities 28 .

Social Responsibility Towards Stockholders     Protect the capital.1. Providing fair and reasonable return. Stability of dividend Transparency in the business operation. 29 .

Opportunity for workers participation management.2. Providing good working conditions. Social Responsibility Towards Employees    Providing fair compensation. in 30 .

Social Responsibility Towards Consumers     Strive to improve product quality.3. 31 . Providing goods and services at fair and competitive price. Making arrangements for supply of goods and services. Satisfactory after sale services.

Should not indulging in brand assassination 32 . Engaging in healthy competition.4. Social Responsibility Towards Competitors    Fair game in market.

5. Social Responsibility Towards Government    Conducting business according rules and regulations enacted by govt. Providing required information from time to time. Regular payment of various taxes. 33 .

34 . Promotion of small scale industries. Social Responsibility Towards Local Community       Preventing of environmental pollution. Conserving scarce resources. Assisting in overall development of the locality.6. Development of backward areas. Providing employment and education opportunities.

Social involvement may create a better public image for the company which may help it in attracting customers.Why Social Responsibility?     Social involvement of business would foster a harmonious and healthy relationship between the society and business to the mutual benefit of both. Social responsibility like recycling of waste may have favourable financial effects. 35 . regulation and intervention. Social involvement may discourage additional govt.

Why Social Responsibility?   Business which survives using the resources of the society has a responsibility to the society. Business which is an integral part of the society has to care for the varied needs of the society. 36 .

Business ethics 37 .

It tells what is right and what is wrongµ 38 .What is ethics? ´ Ethics refers to the code of conduct that guides an individual in dealing with others.

What is Business ethics?
´ the term business ethics refer to the system of moral principles and rules of conduct applied to business.µ ´ Business ethics refer to the behaviour of the business man in his business situation. Where in the business man values certain norms as very important than other thingsµ

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´ The most important business ethics is expressed by the Hippocratic oath of the Greek physician. i.e. ´Primum non nocereµ Which means that ´ business or professional should not knowingly harm the societyµ The code of conduct Primum non nocere encompasses various business ethics namely-

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Do not cheat customers by selling substandard or defective products. Do not destroy the competition. Do not indulge in unfair trade practices like Grey marketing. Ensure sincerity and accuracy in advertising, labeling and packaging. Ensure prompt payment of wages and fair treatment to employees.

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Make accurate business records available to all authorized persons. 42 .    Pay taxes regularly and discharge obligations of the govt. Refrain from secrete profits. Do not form an illegal organization and illegal agreement to control the production.

Types of Business ethics?        Personal Responsibility. 43 . Technical Morality. Legal Responsibilities. Official Responsibility Personal Loyalties. Corporate Responsibilities. Economic Responsibilities.

Role of Trade Associations ´ Voluntary organizations of businessmen and employees formed to promote their common interests. Education and Persuasion. Moral sanctions 44 .µ  Trade association can promote business ethics in three different way 1. 2. Code of Ethics 3.

45 .Education and Persuasion  Trade associations can promote business ethics by educating the members about the importance of. and the need of for. having business ethics. and persuading them to give due regard to ethical principles in the conduct of their business.

46 .Code of Ethics   Trade associations can formulate a code of conduct for their members. The code of conduct will not only guide but also regulate the conduct of business.

Trade associations may announce incentives to promote business ethics. It may debar a member for a serious violation of the code of conduct.Moral sanctions    ´sanctionsµ refer to the ways in which moral conduct rewarded or misconduct is punished. 47 .

Ethical decisions are difficult to make.Problems in Business ethics   a. Some ethical standards vary with the passage of time. There are many reasons why business ethics is difficult to adoptManagers face dilemmas in deciding on a course of action. Knowledge about consequences of an action is limited. 48 . They can not be programmed like production and inventory decisions. c. b.

Individual differences.Problems in Business ethics d. Difficult to match organisational loyalty to public interest 49 . e.

µ ´ Consumerism may simply be expressed as ¶let the seller beware· in comparison to the age ¶let the buyer beware· 50 .Consumerism ´ Social movement seeking to augment the rights and powers of the buyers in relation to sellers.

51 . Thus the need for consumer protection has arised to protect the interest of the consumers.Consumer Protection    In a free market economy. it is said that consumer is a king. but have to settle for lower quality goods. duplicate and adulterated products. But in Modern days consumers have not only been called upon to pay higher price.

      Consumer protection is essential for following reasonsConsumer should be protected against the products that are unsafe and unhealthy. Protect consumers against pollution. To prevent exploitation of consumers from manufacturers. 52 . Consumer should be protected against the unfair trade practices. Protect consumers against restrictive trade practices or monopolies.

Government Measures 53 . Consumerism in India can be explained in two pointsEstablishment of consumer Organization. Consumerism in India is of recent origin. 2.Consumerism in India    1. It was only in 1965 consumer movement started in India.

Association of Women Against Rising expenses. Consumer education centre Indian federation of consumer organization 54 . PRRM.Consumer education and research centre.e.Establishment of Consumer Organization        In the year 1965 housewives of Bombay established a voluntary consumer organization in the name of AWARE i.Consumer guidance society of India. Other organizations are ² CGSI.Price rise resistance movement CERO.

To protect consumers from exploitation To maintain accuracy in weights. Educating consumers Creating an awareness among consumers. 55 .Establishment of Consumer Organization           These associations deal in three important areas likeConsumer protection Consumer education Representation Main objectives of these organizations areTo charge fair and reasonable prices.

In India the government has taken number of measures to protect consumer interest. Government measures can be classified intoEstablishment of public sector Statutory Regulation 56 . 2.Government Measures   1.

Making goods and services at fair prices. Curbing private monopolies. established many business unit to enhance the consumer welfare by increasing production. improving efficiency in production.Establishment of Public Sector     Govt. Improving the distribution system 57 .

has armed it self with a number of statutory weapons to control the production. distribution. supply.Statutory Regulation   Govt. price and quality of a large number of goods and services It enacted following acts to protect the consumers 58 .

      The sale of goods act 1930 Standards of weights and measurements act 1976 MRTP act 1969 Prevention of food adulteration act 1954 Fruit products order 1955 The consumer protection act 1986 59 .

Conclusion   There are several loopholes in the lows which are misused by the sellers in exploiting the consumers. 60 . Consumer organizations got success in creating awareness but failed in the field of consumer protection.

Right to seek redressal 61 .Consumer rights      Right to health and safety Right to be informed Right to choose Right to be heard.

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