Business EnvironmentVIMAL JOSHI
Socio-cultural Environment: The buying and consumption habits of the people, their language,beliefs and values, customs and traditions, tastes and preferences, education etc are theconstituents of Socio-economic environment.For a business to be successful, its strategies should be the one that is appropriate in the Socio-cultural environment. The marketing characteristics of the market e.g. Nestle, a Swissmultinational company brews more than forty varieties of instant coffees as per different nationaltastes.Natural Environment: Difference in geographical conditions between markets may sometimescall for changes in the marketing mix, geographical and ecological factors also influence thelocation of certain industries, climate and weather conditions affect the location of certainindustries like the cotton textile industry. Topographical factors may affect the demand pattern.For example, in hilly areas with a difficult terrain, jeeps may be in greater demand than cars.Demographical Environment: Demographic factors like the size, age composition, sexcomposition etc of the population, family size, educational levels, language, religion etc are allfactors which are relevant to business.The occupational and spatial mobility of population have implications for business if labour iseasily mobile between different occupations and regions, its supply will be relatively smooth andthis will affect wage rate.Technological Environment: Technological developments may increase the demand for someexisting products. For example, voltage stabilizers help increase the sale of electrical appliancesin market characterized by frequent voltage fluctuations in power supply. However, theintroduction of TVs, refrigerators etc. with build-in-voltage stabilizers adversely affects thedemand for voltage stabilizers.Political Environment: Political and government has close relationship with the economic systemand economics policy. Certain changes in government policies such as the industrial policy,traffic policy, fiscal policy etc. may have profocused impact on business. In may countries with aview to protecting consumer business. In many countries with a view to protecting consumerinterests, regulations have become stronger. Regulations to protect the purity of theenvironment and preserve the ecological balance have assumed great importance in manycounties.
. 2 What do you mean by social responsibility of business: Why should businessoirganisation by socially responsible?
Ans. As business operates in society, it can’t exist and grows unless it cares for society. It existvis-à-vis with society. It is required to meet different needs of the society. For meeting theseneeds, business has certain social responsibilities to discharge. “Cooperate socialresponsibilities” is defined as considering the impact of the company’s action on society. Anewer concept,” social responsibilities”, is defined as the ability of a cooperation to relate it’soperation and policies to social environment in ways that are mutually beneficial to both thecompany and society. Social responsibilities of business are different for different sections ofsociety, which include responsibilities towards(a) employees(b) consumers