31726035 Social and Cultural Environment

8/4/2019 31726035 Social and Cultural Environment

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Social and Cultural

Environment

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 factorswhich affect business.

The type of products to be manufactured andmarketed, the marketing strategies to be employed,the way the business should be organized andgoverned, the value and norms it should adhere to

etc. all influenced by the social structure andculture of a society.


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What is Culture?

Culture may be defined as the behaviour of man asa 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


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Religion and Caste

Different people have their own religious convictions,beliefs, sentiments, customs, rituals, festivals etc.

The cost of ignoring certain religious aspects could beeffect organizational existence in international business.

Religion may also influence the attitude towards workand wealth.

Religion also play a role in deciding in weekly holiday,

other holidays and working hours. Many business decisions in India and in several other

countries are based on astrological advices.


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Language

Differences in the language is a very importantproblem 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.


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Consume preferences, Habits, Beliefs,Consumption

What is liked by people of one culture may not beliked by those of other culture.

Many companies modify their products and

promotion strategies to suite the tastes andpreferences or other characteristics of thepopulation of the different countries.

Consumption habits and demand patterns vary

greatly from one market to another. The values and beliefs associated with colour

vary significantly between different cultures.


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Family System

Family is a social institution.

Concerns itself with love, sexual relationship, marriage,socialization of the child etc.

Nuclear families have now become common in oursociety replacing the traditional joint family system.

Women now enjoy equal status with men and most ofthem supplement family income by their own earnings.

Children have become spenders instead of earners. With big families being broken up, family businesses

are slowly turning into limited companies.


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Customs

The customs of marriage, naming ceremony ofchild, festivals, dress sense etc. have significanteffect on business.

These have implications for many types of businesslike textiles, jewellery, catering, consumer durablesetc.


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Demographic Transition

In the first stage of transition, death rates were highon account of poor diets and absence of effectivemedical aid.

In the second stage, death rates were less on accountof improved diets, and improvement of transport.

In the third stage of transition people started to shiftfrom rural areas to industrial and commercial centers.

These changes affect the business organizationsinterms of availability of skilled labour, wage policyetc.


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Savings

Savings habits of consumer also affect theorganization.

It may favorably affect some organization and on

the other hand it may adversely affect the otherbusiness organization.

Increased saving habits of the consumer leads tothe capital formation and even it boosts the

banking sector.


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Etiquettes

The ways of meeting and greeting people methods

of showing respect, ways of conducting meetingsetc affect business organization.


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Cultural Transmission

The elements of culture are transmitted among themembers of the society , from one generation to thenext and to new the new members admitted into

the family. Many cultural bahaviours are handed down by

ones parents, teachers and other elders.

In the cultural transition, it is obvious that certain

old elements are dropped as new ideas and traitsare aquired.


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Impact of

Culture

on

Business


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1.Culture determines Goods andServices

Culture broadly determines the type of goods andservices a business should produce.

The type of food people eat, the clothes they wear,

the beverages they drink and the building materialthey use, vary from culture to culture and fromtime to time with in the same culture.


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2. Peoples attitude to Business

Attitude of people towards business is largelydetermined by their culture.

Business systems are a product of beliefs and

customs of society in which they exist. Peoples attitude are based on how well business

contribute to society.


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3. Attitude to Work

Motivation, morale and other related aspects ofhuman resource management are based on theworkers attitude to their work.


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4. Culture creates people

The concept of culture is of great significance tobusiness because it is the culture which generallydetermines the activities of the people


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5. Collectivism and Individualism

The spirit of collectivism and individualism isrelated to such personnel aspects as employeemorale, multiplicity of trade unions and inter and

intra-union rivalries. It is said that our culture Stresses individualism.


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6. Ambitions and complacent

An individuals ambition to grow or remaincomplacent depends on cultural factors.

Majority of our people are know to be complacent.


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7. Education

The close interface of business and highereducation 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 priorityamong the developmental activities.


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In order to effectively adopt, create and also toconfirm a culture, the business people should have

a thorough knowledge of the culturalenvironment.

This will be useful to the management of the

business in several ways-


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People generally are conditioned to behave in aparticular way and perform their work in aparticular method. So awareness of their culturewill help to understand their behaviour andconduct.

by observing their cultural background, thebusinessmen can easily predict their future

behaviour in the event of introducing a newproduct.

Awareness of cultural background will enable thebusiness to quickly change the product to suit the

needs o the changing soviety.


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


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Social responsibility of Business

Business depends on the society on thesociety for the needed inputs like money,men, and skills.

Business depends on society for existence,sustenance, and encouragement.

Being so much dependent, business has

definite responsibility towards society.


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What is Social Responsibility?

Obligation of business to take actions which protectand improve the welfare of society as a whole

along with its own interests

What business does, over and above the statutoryrequirement, for the benefit of the society


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EarlyEarly

2020thth CenturyCentury

MiddleMiddle

2020thth CenturyCentury

EarlyEarly

2121stst CenturyCentury

MaximizeMaximize

ProfitsProfits

Provide JobsProvide Jobs

and Pay Taxesand Pay Taxes

Balance ProfitsBalance Profits

and Social Issuesand Social Issues

Social Responsibility in Business


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1. Social Responsibility Towards Stockholders

Protect the capital.

Providing fair and reasonable return.

Stability of dividend

Transparency in the business operation.


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2. Social Responsibility Towards Employees

Providing fair compensation.

Providing good working conditions.

Opportunity for workers participation in

management.


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3.Social Responsibility Towards Consumers

Strive to improve product quality.

Providing goods and services at fair andcompetitive price.

Making arrangements for supply of goods andservices.

Satisfactory after sale services.


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4. Social Responsibility Towards Competitors

Fair game in market.

Engaging in healthy competition.

Should not indulging in brand assassination


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5. Social Responsibility Towards Government

Conducting business according rules andregulations enacted by govt.

Regular payment of various taxes.

Providing required information from time to time.


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6. Social Responsibility Towards Local Community

Preventing of environmental pollution.

Assisting in overall development of the locality.

Development of backward areas.

Conserving scarce resources. Promotion of small scale industries.

Providing employment and educationopportunities.


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Why Social Responsibility?

Social involvement of business would foster aharmonious and healthy relationship between thesociety and business to the mutual benefit of both.

Social responsibility like recycling of waste mayhave favourable financial effects.

Social involvement may create a better publicimage for the company which may help it in

attracting customers. Social involvement may discourage additional

govt. regulation and intervention.


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Why Social Responsibility?

Business which survives using the resources of thesociety 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.


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Business ethics


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What is ethics?

Ethics refers to the code of conduct that guides anindividual in dealing with others. It tells what isright and what is wrong


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What is Business ethics?

the term business ethics refer to the system ofmoral principles and rules of conduct applied tobusiness.

Business ethics refer to the behaviour of thebusiness man in his business situation. Where inthe business man values certain norms as very

important than other things


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The most important business ethics is expressed bythe Hippocratic oath of the Greek physician.i.e. Primum non nocere

Which means that business or professional shouldnot knowingly harm the society

The code of conduct Primum non nocereencompasses various business ethics namely-


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Do not cheat customers by selling substandard ordefective products.

Do not destroy the competition.

Do not indulge in unfair trade practices like Greymarketing.

Ensure sincerity and accuracy in advertising,labeling and packaging.

Ensure prompt payment of wages and fairtreatment to employees.


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Pay taxes regularly and discharge obligations of thegovt.

Refrain from secrete profits.

Make accurate business records available to allauthorized persons.

Do not form an illegal organization and illegalagreement to control the production.


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Types of Business ethics?

Personal Responsibility.

Official Responsibility

Personal Loyalties.

Corporate Responsibilities. Economic Responsibilities.

Technical Morality.

Legal Responsibilities.


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Role of Trade Associations

Voluntary organizations of businessmen andemployees formed to promote their commoninterests.

Trade association can promote business ethics inthree different way

1. Education and Persuasion.

2. Code of Ethics

3. Moral sanctions


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Education and Persuasion

Trade associations can promote business ethics byeducating the members about the importance of,and the need of for, having business ethics, andpersuading them to give due regard to ethicalprinciples in the conduct of their business.


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Code of Ethics

Trade associations can formulate a code of conductfor their members.

The code of conduct will not only guide but also

regulate the conduct of business.


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Moral sanctions

sanctions refer to the ways in which moralconduct rewarded or misconduct is punished.

Trade associations may announce incentives to

promote business ethics. It may debar a member for a serious violation of the

code of conduct.


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Problems in Business ethics

Ethical decisions are difficult to make. They cannot be programmed like production andinventory decisions.

There are many reasons why business ethics is

difficult to adopt-a. Managers face dilemmas in deciding on a course

of action.

b. Knowledge about consequences of an action is

limited.c. Some ethical standards vary with the passage of

time.


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Problems in Business ethics

d. Individual differences.

e. Difficult to match organisational loyalty to publicinterest


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Consumerism

Social movement seeking to augment the rights andpowers of the buyers in relation to sellers.

Consumerism may simply be expressed as let the

seller beware in comparison to the age let thebuyer beware


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Consumer Protection

In a free market economy, it is said that consumeris a king.

But in Modern days consumers have not only

been called upon to pay higher price, but have tosettle for lower quality goods, duplicate andadulterated products.

Thus the need for consumer protection has arised

to protect the interest of the consumers.


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Consumer protection is essential for followingreasons-

Consumer should be protected against the products

that are unsafe and unhealthy. Consumer should be protected against the unfair trade

practices.

Protect consumers against pollution.

Protect consumers against restrictive trade practices ormonopolies.

To prevent exploitation of consumers frommanufacturers.


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Consumerism in India

Consumerism in India is of recent origin.

It was only in 1965 consumer movement startedin India.

Consumerism in India can be explained in twopoints-

1. Establishment of consumer Organization.

2. Government Measures

E bli h f C


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Establishment of ConsumerOrganization

In the year 1965 housewives of Bombay established avoluntary consumer organization in the name ofAWARE i.e. Association of Women Against Risingexpenses.

Other organizations are

CGSI- Consumer guidance society of India.

PRRM- Price rise resistance movement

CERO- Consumer education and research centre. Consumer education centre

Indian federation of consumer organization

E t bli h t f C


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Establishment of ConsumerOrganization

These associations deal in three important areaslike-

Consumer protection Consumer education

Representation Main objectives of these organizations are- To charge fair and reasonable prices. To protect consumers from exploitation

To maintain accuracy in weights. Educating consumers Creating an awareness among consumers.


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Government Measures

In India the government has taken number ofmeasures to protect consumer interest.

Government measures can be classified into-

1. Establishment of public sector

2. Statutory Regulation


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Establishment of Public Sector

Govt. established many business unit toenhance the consumer welfare by increasingproduction, improving efficiency in

production. Making goods and services at fair prices.

Curbing private monopolies.

Improving the distribution system


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Statutory Regulation

Govt. has armed it self with a number ofstatutory weapons to control the production,supply, distribution, price and quality of a

large number of goods and services It enacted following acts to protect the

consumers


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The sale of goods act 1930

Standards of weights and measurements act1976

MRTP act 1969

Prevention of food adulteration act 1954

Fruit products order 1955

The consumer protection act 1986


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Conclusion

There are several loopholes in the lowswhich are misused by the sellers inexploiting the consumers.

Consumer organizations got success increating awareness but failed in the field ofconsumer protection.


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Consumer rights

Right to health and safety

Right to be informed

Right to choose

Right to be heard.

Right to seek redressal

31726035 Social and Cultural Environment

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