The Changing Socio- Cultural Environment In India and Its effects on Business

By: Rajat Singla (21) Rajesh Punia (22) Ramneek Singh (23) Ruchika Singh (24)

Contents of the Presentation

Socio-Cultural Environment Critical Elements of Socio-Cultural Environment of Business Impact of Foreign Culture on Business Hofstede Index Family Life Cycle A Case Study on Maggi Changing trends in India due to Socio Cultural changes & other Contemporary Issues Changing Trends in Society

Now, what exactly is Socio-Cultural Environment

Sociocultural Environment That part of the firm's external marketing environment in which social or cultural changes (that is, changes to the value system of a society) act to affect the firm's marketing effort. The changing sociocultural environment may pose threats or present opportunities for the business.

Socio Cultural
Society
Culture

SOCIETY
o o

Society or human society is the set of relations among people, including their social status and roles. A society is a body of individuals outlined by the bounds of functional interdependence, possibly comprising characteristics such as national or cultural identity, social solidarity, language or hierarchical organization.

CULTURE
According to Hofstede, Culture is the software of the mind- the

social programming that runs the way we think, act and perceive ourselves and others. Culture is defined as a complex whole which consists of customs, attitudes, beliefs and values of a society. The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group. It is the total way of life of people.

Some concepts related to Culture

Elements

Knowledge and beliefs (Science, myth, metaphysics) Ideals (Right / Wrong) Preferences (Attractive/ Unattractive)

Cultural Heritage Cultural heritage is the legacy of physical artefacts and intangible attributes of a group or society that are inherited from past generations, maintained in the present and bestowed for the benefit of future generations Cultural Adaptation Culture is learned by each person in the course of his development in the society.

 Cultural Conformity: It means following the culture blindly, doing what are predessors have been doing without even knowing the reason for it.

Example

Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb towards the banana. As soon as he touches the stairs, all of the other monkeys are sprayed with cold water. After a while, another monkey makes an attempt with the same result - all the other monkeys are sprayed with cold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it. Now, put away the cold water. Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs. To his surprise and horror, all of the other monkeys attack him. After another attempt and attack, he knows that if he tries to climb the stairs, he will be assaulted. Next, remove another of the original five monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm! Likewise, replace a third original monkey with a new one, then a fourth, then the fifth. Every time the newest monkey takes to the stairs, he is attacked. Most of the monkeys that are beating him have no idea why they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey. After replacing all the original monkeys, none of the remaining monkeys has ever been sprayed with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the banana. Why not? Because as far as they know thats the way its always been done around here. Origins of this story unknown

Critical Elements of Socio-Cultural Environment of Business

Social Institutions & Caste System, Joint Family System, Patriarchal Systems Family, Marriage, Religion
Social Values & Movers Education & Culture
Customs & Superstitions, Traditions, Conventions, Manners, Attitudes Attitude towards Education, Business Morality & Organisational Culture

Social Responsibility Business Ethics, Social Welfare

Others

Urbanisation, Education, Cross Cultural Issues, Language, Cultural Shock

Castes and Communities

As we all know, Indian society, particularly the Hindu society, was divided into four categories on the basis of caste. Economic pressures, spread of education, and other developments have been breaking down slowly class distinctions and social barriers.Industrialization has created new social and political functions and new occupations. Vaishyas, Brahmins, and other castes are no longer confined to their original roles.

Workforce Diversity

When people from different cultures converge in a workplace, Management will be required to manage diversity. Workforce diversity has important implications for Management practices. Managers will be required to shift their philosophy from treating everyone alike to recognising differences and responding to those differences in manners that will ensure employee retention and productivity.

Family System
Earlier, Joint Family System was prevalent. Now, Nuclear family is being preferred. The joint family is being split into smaller units of nuclear family. Now, the impacts for Marketers: Increasing demand for Flats, Vehicles, Consumer Goods. Increasing demand for catering services (packed lunches), baby sitters, creches.

Religion and Religious Groups

Religious beliefs, convictions, customs, rituals and festivals differ from one group to another. Business firms can suffer heavy losses by ignoring religious sentiments of customers, employees and others. Religious groups exert considerable influence on activities of business groups. Thus, business must recognize and respect religious sentiments. Example, negative demand for beef products in India.

Customs & Superstitions

Many important business decisions in India are taken on the advise of astrologers. (Location of business, time of launch, name of enterprise, brand name etc.) Example, Business firms do brisk business on festivals such as Deepavali, Christmas, Id, Guru Purab etc. No purchase of Iron & Steel goods by people on Saturday as it is considered inauspicious.

Superstitions (Contd.)

Barber Shops & Chicken Shops dont open on Tuesday due to religious reasons. (Lord Hanumans Day) In most countries Sunday is a weekly holiday, but in Islamic countries Friday is treated as a weekly holiday. Even acceptable colors depend on the culture sometimes.

SINGH IS KINNG

The extra N in the word King in the title of movie Singh is Kinng was due to astrological & numerological reasons.

BALAJI TELEFILMS

Balaji Telefilms names all its serials starting with the letter K. For e.g. Kyunki Saas Bhi Kabhi Bahu Thi, Kasauti Zindagi Kay etc both which were superhit serials and a common topic of discussion among the households.

Kelloggs Failure in India

Reasons for Failure:
The fact that the taste of its products did not suit Indian breakfast habits. The second mistake it made in the Indian market was its positioning front. Its advertisements and promotions focused initially on the health aspects of the product which was a fundamental departure from the successful fun and taste positioning adopted in the United States. High prices: At an average cost of Rs.21 per 100gm,Kellogg products were clearly priced way above the product of its main competitor , Mohun Cornflakes (Rs16.50 for 100gm).Another small-time brand, Champion was selling at prices almost half that of Kelloggs. This gave Kellogg a premium image and unattainable for the average Indian consumer.

KFCs Failure in India

Reasons for Failure:
KFC was banned in India in 1997 due to launching of Beefs products in India. Beef products in India are totally unacceptable by the people of India as Cow is a Holy Animal in Hindu Culture and it is worshipped. So, it hurt the religious sentiments of all the Hindu people in India and was subsequently banned by the Government.

Nimbu Pani To Nimbooz

The PepsiCo identified the popularity of Nimbu Pani among both Rural & Urban India so they launched Nimbooz based on the traditional flavour of Nimbu Pani which was readily accepted by the people.

Marriage is one of the basic elements of culture and peoples attitude towards marriage influences culture a lot. Marriage is a social event that concerns the whole society. In India, marriages are a family affair. The marriage season is a big opportunity for business. For e.g. Jewellery, Kitchen ware, Honeymoon Package, Household Furniture, Vehicles etc have huge demand during the marriage season.

Marriage

Attitudes

Attitudes include things such as individual freedom, democracy, truth and honesty, justice love and marriage to name a few. Attitude towards work is important as it determines motivation, morale, job satisfaction, productivity etc. All sorts of attitudes exist, but the positive aspect of Indian attitude is that generally, no worker or employee touches his/her tools of work, without closing his/her eyes for a few minutes and thanking the almighty for having bestowed his blessings in the form of work. Sincerity, hard work, loyalty and honesty are other aspects of the Indian work culture.

Language

India is multi linguistic. (18 officially recognized languages and the census of India identifies 1652 more.) Marketing plans become costlier and more complex due to this huge diversity. The advertising campaigns have to been launched in National as well as local languages. Pepsis come alive slogan was considered offensive in some places as to the locals it meant come out of the grave. Parker Pen Company faced similar problems as in some countries Ball Pen meant lie, Obscenity, fabrication, revolution etc. Reebok had to discontinue its INCUBUS brand as in medieval folklore, Incubus was a devil who terrorized women. Ford Motors truck named Fiera meant Ugly old women in Spanish. Segmentation can be done on the basis of linguistic groups.

Cultural Shock
A move from one country to another may create certain amount of confusion, disorientation and emotional upheavel. This is called Cultural Shock. Organizations, particularly MNCs must be prepared to cope with the cultural shock.

Ethics
o o

Ethics in business deals with the ethical path business firms ought to adopt. Jacques Cory, a noted business ethicist observes, companies should behave ethically and be profitable in parallel, and even if ethics diminishes the profitability of the company, they should still behave ethically. Google Halts Censorship on Chinese Search Google announces a new approach to China, indicating that Chinas behavior toward human rights activists and other efforts to further limit free speech on the web in China had led Google to stop censoring its search services on the Google.cn site and instead redirect traffic to its Hong Kong-based servers.

Education
Countries rich in educational facilities vastly attract high wage industries. By investing in education, a country can attract Brain-Power Industries. Market Potential of a country depends on education. The level of literacy determines the nature of advertising, packaging, quality of marketing research and distribution system. Barack Obama has said in a recent address to the US Senate that, India is playing for the number one position. If they keep producing more engineers, doctors and scientists than us, we will not be number one for long.

Kiryana Ki Dukan to Swanky Malls

Earlier people used to go to Neighbourhood Kiryana Shops, but now due to changing culture of working people, these shops have given way to Swanky Malls like Big Bazaar, Pantaloons, Trent, Westlife etc. The people have become more brand conscious. Nowadays, people prefer more branded products over the local products even if they are more expensive.

From Scooter to Nano

Nano - People's car The Dream of people to own a Car turned into true by Ratan Tata when he launched Nano. The idea was based on the personal experience of Ratan Tata when he saw two-wheelers - with the father driving, the elder child standing in front and the wife behind holding a baby. The price of Rs. 1,00,000 was fixed keeping in mind the low budget of an average Indian family and subsequently, it was the Worlds cheapest car. This triggered the revolution in the small car market.

Studying in Same City to Studying Abroad

Earlier, people only sent their children to the same cities to study. But now their has been recent trend to send the children abroad to study. For e.g. sending the children to Australia has become a trend. This has resulted in opening of Immigration & Consultancies agencies which guarantee Instant Visa to the applicant. The trend of sending children abroad is so much popular that in the region of Hoshiarpur and around in the Punjab state, almost all of the boys in the families in this region have gone abroad to study.

No Health Awareness to Health Conscious People

Now, people are more conscious about the calories in a particular product and always check the nutritional values before purchasing any product. The business has responded to this situation by launching more health conscious products. For e.g. Cold drinks like Pepsi and Coca Cola etc have given way to more healthier drinks like fresh fruit juice like Real And Tropicana etc. Awareness regarding fitness in the people has made aerobics, going to gym and weight loss programs a craze among Indians. For e.g. VLCC has been doing a brisk business.

Bharatmatrimony.com

A new trend of marriages being made online has emerged in India. People prefer to explore all the possible sources for marriage so they are actively considering the online marriage sites. A host of match making sites have opened like bharatmatrimony.com, shaadi.com, jeevansaathi.com etc. So, much so, that bharatmatrimony.com has special dedicated websites for various segmentations based on language, religious groups like Punjabi, Hindi, Assamese etc.

Impact of Foreign Culture on Business

Foreign culture has affected India in a significant manner : For Example, 1. Our eating habits have changed dramatically. 2. Occasions Such as Valentines day have gained as much importance as other major festivals and provide a huge business opportunity to people all over the country. 3. The dressing and apparels segment is reaping benefits of the changing Indian Culture. Increasing exposure of media such as television and internet, international travel etc. are responsible for this transformation.

Hofstede Index
Individualism vs. collectivism
Small vs. large power distance Masculinity vs. femininity Weak vs. strong uncertainty Long vs. short term orientation

Individualism
Individualism/Collectivism is the relationship between individuals and their fellow individuals. Hofstede said that individualism stands for a society in which the ties between individuals are loose. Everyone is looking after him or herself and their immediate families only.

Collectivism

Vs

Collectivism stands for a society in which people are integrated into strong cohesive groups, which protect them throughout their lives. Individualism is often regarded as the characteristic of a modernizing society, while collectivism reminds us of both more traditional societies and the failure of the communist experiments.

Doing business in India involves building relationships. Indians only deal favorably with those they know and trust - even at the expense of lucrative deals. It is vital that a good working relationship is founded with any prospective partner. This must take place on a business level, i.e. demonstrating strong business acumen, and at a personal level, i.e. relating to your partner and exhibiting the positive traits of trustworthiness and honour. Canada has Individualism as the highest ranking in Hofstedes Dimension.

Power Distance

Hofstede proposed Power Distance as the extent to which the organizations expect and accept the unequal distribution of power. A high Power Distance ranking indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens. A low Power Distance ranking indicates the society de-emphasizes the differences between citizen's power and wealth. In these societies equality and opportunity for everyone is stressed.

The Hofstede analysis for India suggests a large power distance society and all other measures are relatively moderate. This would be indicative of the fact that India is in the midst of change. The traditional caste systems has been outlawed, however the large power distance score indicates that the attitudes still remain. Indias Power Distance score was very high for culture, with a ranking of 77 compared to a world average of 56.5. This Power Distance score for India indicates a high level of inequality of power and wealth within the society. In India, social hierarchies are very much in place and even at work it is not easy to be friendly with ones boss in most organizations. Calling ones boss by his first name is rare in India. In fact abuse by seniors is also common and usually the employee is helpless and his only recourse is to leave. Canada's Power Distance is relatively low, with an index of 39, compared to a world average of 55.

Masculinity/Feminine
This Hofstede Dimension concept of a culture refers to the distribution of roles between the men and women in a cultural society. Studies revealed that mens values differ from those of the women. The assertive aspect of a culture has been named

masculine and the caring modest aspect has been termed as feminine. In a masculine society men are supposed to be tough, focused and assertive while women are
supposed to be more modest and caring. Masculine individuals are characterized as aggressive and money oriented. On the other hand in a feminine society both men and women are supposed be modest, tender and concerned with the quality of life. Feminine individuals are characterized as people oriented and less interested in personal recognition.

India has Masculinity as the third highest ranking Hofstede Dimension at 56, with the world average just slightly lower at 51. The higher the country ranks in this dimension, the greater the gap between values of men and women. It may also generate a more competitive and assertive female population, although still less than the male population.

Uncertainty Avoidance

This dimensions focuses on the level of tolerance for uncertainty and ambiguity within the society i.e. unstructured situations. A high Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity. A low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks.

India's rank in the Uncertainty Avoidance dimension is 40, compared to the world average of 65. On the lower end of this ranking, the culture may be more open to unstructured ideas and situations. The population may have fewer rules and regulations with which to attempt control of every unknown and unexpected event or situation, as is the case in high Uncertainty Avoidance countries. Normally a low score is good, as it means that the society has fewer rules and does not attempt to control all outcomes and results. It also means a greater level of tolerance for a variety of ideas, thoughts, and beliefs and a high tolerance for ambiguity.

It measures the importance attached to the future versus the past and present. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'.

Long Term Orientation

India's Long Term Orientation Dimension rank is 61, with the world average at 48.

A higher Long Term Orientation score can be indicative of a culture that is perseverant and parsimonious. India has a very high score meaning that their culture is more persistent and thrifty. Indians have a sense of shame that is shared amongst a group of people and relationships are viewed by order of status. It is expected that the Indian businessperson will need to plan further out in their business plans because of their need for Long-Term Orientations.

HOFSTEDE INDEX COMPARISON

INDIA Power Distance Index (PDI) - 77 Individualism (IDV) - 48 Masculinity (MAS) 56 Uncertainty Avoidance Index (UAI) 40 Long-Term Orientation (LTO) - 61 WORLD Power Distance Index (PDI) - 56.5 Individualism (IDV) 56.5 Masculinity (MAS) 51 Uncertainty Avoidance Index (UAI) 65 Long-Term Orientation (LTO) - 43

HOFSTEDE INDEX COMPARISON

INDIA WORLD

Source: http://www.geerthofstede.com

INDIA vs USA

INDIA vs CHINA

Source: http://www.geert-hofstede.com

Family Life Cycle

It is a way of segmenting the Family Market at different stages of life cycle to determine the products and services that people buy at each stage. This model describes the stages which consumer happen to be in their lives as they have families. The model was developed by Wells and Gruber in 1960s.

Young Singles Young singles who live alone or with their family. Low individual income and less financial burden. Fashion and recreation oriented. BUY:- Two Wheelers, Gift Items, Movies, Computers, Mobile Phones etc.
Note: The current proportion of population under 25 years in India is 51% and the proportion under 35 is about 66%.

source - http://www.youthportal.gov.in/statistics.htm

Newly Married Couples Young families, No Children. High Income. High level of purchase of homes durable goods. BUY:- Spend heavily on Cars, clothing, Vacations & Leisure activities, highest average purchase of durable goods especially furniture and appliances.

First Child arrives. Home purchasing at peak. Spending dominated by children needs. BUY:-Furniture for the babys room and other furnishings are bought, as well such appliances as a washer, dryer, and television set. In addition, many child related expenses are now added, including baby food, baby medicines, doctors visits and toys of all sorts.

Full Nest 1

Youngest child reaches school. Family spending is children centred. Families in this stage are still new product oriented but tend be less influenced by advertising because they have more buying experience. BUY:- Money invested in financial instruments for future of their children and themselves.

Full Nest 2

Full Nest 3

Older married couples with dependent children. School and exam dominated household. Expenditure to support childrens education. BUY:- Expenditure on children and their belongings like motorbikes, computers, fashion etc

Empty Nest 1 Children leave home and establish their own nest. Income at highest level and expenses low. Spending on newly married children. BUY:- luxuries and home improvements etc

Empty Nest 2

Reduction of income for individuals. Get dependent on their children and spending is on their health.

Corruption

Corruption may be defined as any conduct which amounts to influencing the decision-making process of a public officer or authority, or influence peddling dishonesty or breach of trust, by a public officer, in the exercise of his duty; insider dealing.

India has been ranked at 74.

Source: Wallstreet Journal

What is black money?

Black money is the sum total of transactions deliberately kept out of the books of accounts by household and business in the economy. Dishonest industrialists, scandalous politicians and corrupt IAS, IRS, IPS officers have deposited in foreign banks in their illegal personal accounts a sum of about $1500 billion, which have been misappropriated by them. This amount is about 13 times larger than the country's foreign debt. With this amount 45 crore poor people can get Rs 1,00,000 each. Once this large amount of black money and property comes back to India, the entire foreign debt can be repaid in 24 hours.

Causes of black money

Corrupt business practices Political and bureaucratic corruption Prohibited trades like liquor and drugs Manipulation of public expenditure Inadequacy of power to the tax authority Ineffective enforcement of the tax law

Implications on our economy

Black money generated every year in India accounts for 20 % of GDP which will be around 160 billion US dollars. Black money is like block money. Creation of a Parallel Economy Used now days in financing terrorists activities and also put in hawala for illegal transactions

Maggi in India

Nestle India Ltd. (NIL) the Indian subsidiary of the global FMCG major, Nestl SA, introduced Maggi brand in India in 1982. Maggi is the iconic brand of Nestle. With the launch of Maggi noodles, NIL created an entirely new food category Instant Noodles in the Indian packaged food market. Being the first mover, NIL successfully managed to retain its leadership in the instant noodles category even until the early 2000s.

Initial Strategies of Maggi-The Culture Effect Maggi had to fight hard to be accepted by Indian consumers with
their hard-to-change eating habits. At that time, Indian consumers were rather conservative in their food habits. They preferred to eat traditional Indian dishes rather than canned or packaged food.

Snacks like samosas are usually bought out, and outside food is

generally considered unhygienic and unhealthy. The other competitor, homemade snacks overcame both these problems but had the disadvantage of extended preparation time at home. Maggi was positioned as the only hygienic home made snack! Maggi was positioned as 2-minute noodles under the instant food category .And this gave the implied understanding to the consumer that it was a between meals snack. The company could have easily positioned the product as a meal, either lunch or dinner. But, it chose not to do so, because the Indian consumer mindset did not accept anything other than rice or roti as a meal .

Initial Strategies of Maggi-The Culture Effect

The firm did not position it as a readyto-eat meal either, as the housewife prefers to make a meal for her kids rather than buy it for them. And if she can make it in two minutes with very little effort, then obviously its a hit with her! Whats more, if kids also love the taste, the product is as good as sold! So the 2-minute funda coupled with the yummy taste worked!

Changing trends in India due to Socio Cultural changes

Social networking as a Marketing Tool

Marketers main business purpose is building brand equity and influencing consumers to buy their products or services.

The social dimension of marketing however needs to be integrated into the complete marketing strategy of businesses.

Marketers are looking at ways to build environments in which they engage users to the extent that they become passionate advocates of the brand and in this way attract and influence other users to buy the product or service. In 2009, 34% of companies where using blogs, compared to 21% in 2008. Wikis were used by 32% in 2009, and 24% in 2008 . Social Networking was used by 28% in 2009 and 27% in 2008.

Source : Building the web2.0 enterprise. McKinsey Global Survey, June 2009.

How does social marketing contribute to the business objectives? B2C Marketing C2C Marketing

Brands using C2C marketing techniques

Adidas EA Sports BMW Crest P&G

Jeep

Youth Empowerment
Products are catered at

Youngistan.

Job Hopping is a common trend. Goal oriented Technocrats. More open to new technologies and products. Aware of their rights.

Changing Face of Indian Entertainment Industry

From K-Serials to Reality Shows & Socially oriented serials such as Balika Vadhu. Movies have been made on more contemporary issues. Single screens to Multiplexes. Corporate houses are funding movies.

Change in the way cricket is played

Indian Premier League

A huge cultural change.

IPL (Indian Premier League)

India moving from test cricket to club cricket. Page 3 Is The Way To Be: In a country obsessed with Bollywood & cricket, IPL has just the right mix. The star quotient in sports has never been so high. The stands packed mostly with young males 15-25 years , having the time of their lives. The best players from across the world, the cheerleaders flown in, the best brands offering customized merchandise. Unlike their parents, todays Indians are familiar with the worlds best & latest. And they will not settle for less

Contd..
Metros Going Global: Mumbai, Chennai, Kolkata are no longer about the Ghats, the Madrasis & the Bongs.

The IT & ITeS boom has made our metros into multicultural, multilanguage, multiethnic, melting pots, with enough Gora presence. Homogeneous yet heterogeneous: Saurabh Tiwari, Manish Pandey & Harbhajans being on the Mumbai Indians team will be giving sleepless nights to Raj Thackery & his MNS. But thats what our cities are today & thats what we have come to accept. Fast & Furious: Time is at premium & patience a forgotten virtue. For a young India, IPL is instant gratification. Three hours of excitement & fast-paced action.

Business Aspect of IPL T20

IPL salaries higher than English Premier League footballers.

Second only to the American National Basketball Association (NBA) league

IPLs average salary, calculated over a year, is 2.5 million pounds whereas Average salary is 2.62 million pounds. Indian Premier League would generate a revenue of $1 billion(about Rs 4,700 crore) this season. In the 211-team list currently monitored by average first-team pay, Royal Challengers Bangalore comes in at 12th, at an average of 57,833 pounds a week, standing two places above Manchester United.

Source : The Economic Times 24/03/2010 & 29/03/2010

Changing Social & Ethical beliefs

Homosexuality is generally considered a taboo subject by both Indian civil society and the government. On 2 July 2009, a Delhi High Court ruling decriminalized homosexual intercourse between consenting adults and judged Section 377 of the Indian Penal Code to be conflicting with the fundamental rights guaranteed by the Constitution of India.

International pressure
The United Nations urged India to decriminalize homosexuality by saying it would help the fight against HIV/AIDS by allowing intervention programs, much like the successful ones in China and Brazil.

contd

The Supreme Court on Tuesday verdict that live in relationship i.e. living with one another without marriage is not illegal and cannot be defined as criminal offence.

Implication:

Population Control. Higher Adoption Rate. Higher Adoption Rate would lead to decrease in Beggary. Higher Decision making power leading to independent thought process.

Changing Business Environment

Corporate Social Responsibility

Introduction
CSR is about how companies manage the business processes to produce an overall positive impact on society.

The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large.

Definition
World Business Council for Sustainable Development:

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Market forces driving the need for organizations to address CSR

1) 2)

3)
4) 5) 6) 7)

8)

Economic considerations Ethical considerations Innovation and learning Employee motivation Reputation or brand Market position or share Strengthened supplier relationships Cost savings

Source: KPMG's International Survey of CSR Reporting (2009).

Which areas are covered by CSR?

Responsibility towards Shareholders. Responsibility Towards Employee Responsibility Towards Consumer. Responsibility Towards Community Human Rights

CSR in India
Nearly all leading corporates in India are involved in corporate social responsibility (CSR) programmes . The leading areas that corporations are working on are education, health, environment, livelihood promotion and women's empowerment. .

Microfinance, slum improvement and agricultural development issues are also gaining prominence as CSR activities.
Over 90% of all major organizations surveyed were involved in CSR initiatives. The private sector is more involved in CSR activities than the public/ government sector.

Contd..
CSR activity in India picked up after the liberalization of the economy in 1991.

Most companies initiated action in the early 90's and now have a formal policy in place. One third or more still do not have a policy but do pursue CSR actively.

Notable efforts have come from the Tata Group, Infosys, Bharti Enterprises, Coca Cola India, Pepsico and ITC Welcome group, among others. Four Indians, including Sunil Mittal, Chairman and Managing Director of the Bharti Group, non -resident Indian (NRI) businessman Anil Agarwal, Shiv Nadar, HCL Technologies Chairman and non government organization (NGO) activist Rohini Nilekani were featured in the Forbes list of '48 Heroes of Philanthropy'.

Contd..
Some 300 corporate houses, on an aggregate, have identified 26 different themes for their CSR initiatives. Of these 26 schemes, community welfare tops the list, followed by education, the environment, health, as well as rural development. India has been named among the top ten Asian countries paying increasing importance towards corporate social responsibility (CSR) disclosure norms.

India was ranked fourth in the list, according to social enterprise CSR Asia's Asian Sustainability Ranking (ASR).

Source: http://www.ibef.org , ASSOCHAM's 'Eco Pulse Study' on CSR for 2009-10

Indian Companies implementing CSR

CSR at TATA
JAMASETJI TATA - A visionary ahead of his times.

AREAS OF IMPACT Environment Employee Relations Stimulating Economic Growth Civic Amenities & Community Service Population Management Sports and Adventure Health for All Relief During Natural Calamities Education / Arts and Culture

Implementing these principles over 100 years are part of organizational development

1912 1916 1920 1934 1934

8 hour workday Social Welfare Scheme launched for employees Leave with pay Profit Sharing bonus Tata Steel responded to earthquake in its Bihar province with relief supplies 1951 - Planned family norms promoted at community level 1970 Included Corporate Social Responsibility in its Articles of Association 1979 - Launched concerted rural development initiatives Founder member of the Global Business Coalition on HIV/AIDS First Indian company to publish Corporate Sustainability Report as per G R I guidelines

Stimulating Economic Growth

Tata Steel and its subsidiaries provide business opportunities to ancillary units Institutions such as National Institute of Technology, R.D.Tata Technical Education Center, and Savak Nanavati Technical Institute provides technical and job oriented training Promoting rural economy through natural resource management, micro financing and credit, and training for gainful employment

Tata Steel caters to over 600 villages and several company towns, in the provinces of Orissa and Jharkhand

Hindustan Unilever Limited

HULs Corporate purpose The Highest standard of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact

Project Shakti

Objective is to To create income generating capabilities for underprivileged rural woman by providing a sustainable micro enterprises opportunity To improve rural living standard through health and hygiene awareness. Shakti is pioneering effort in creating livelihood for rural woman.

Lifebuoy Swasthya Chetana Program

Single largest rural health, hygiene programme. To educate people about basic Hygienic habits. Covered 15000 villages,8 states and 70 million people.

Other efforts of CSR at HUL

Ankur ( seeding)

Started for Handicapped children. Aim was to provide special education , services to children. Kappagam ( shelter) Same as Ankur.

Asha Dhan

Supported Mother Teresa, Missionaries. Mother Teresas Mission Serve poorest of poor Helped abandoned, challenged and HIV patients.

Disaster relief Rebuilding Lives

Reconstructed a village in Kachch District. Provided with School, Playground, community center. Renamed as yashodadham

ITC E-Choupal

1. 2. 3. 4.

Started in the year 2000 Target Area so far 38,000 villages, 6500 kiosks, 9 states Wholly owned by ITC Why it become a success ? Only initiative to attempt to combine Services and an Effective Business Model successfully Designed to address the issues such as: Fragmented farms Weak institutions Involvement of intermediaries Information Asymmetry

Other CSR Initiatives and Green Measures

Coca-Cola India has started with a corpus of US$ 10 million for its CSR activities in 2008. It has undertaken US$ 2530 million a year project on water conservation, and the project "Elixir of life" to provide drinking water to nearly 30,000 school children. Coca-Cola India won the 'Golden Peacock Global Awar for Corporate Social Responsibility 2008' for these initiatives.

Contd..
ArcelorMittal will spend about US$ 500 million as part of its CSR initiatives inJharkhand and Orissa.

Bajaj Auto,Ashok Leyland,Tata Motors,M&M

Bajaj Auto, Ashok Leyland, Tata Motors, Mahindra & Mahindra and Eicher Motors have come together to develop hydrogenblended compressed natural gas (HCNG)-run vehicles to tackle the problem of rising pollution.

Tata Motors and space agency ISRO are likely to launch the prototype of the world's cleanest vehicle that will run on hydrogen and leave behind nothing more than a trail of water vapour

Contd..
Global Compact, in association with FICCI, is also organising the first ever national convention on 'Excellence in Corporate Citizenship and Global Compact'.

Pepsico India has signed the CII-Code for Ecologically Sustainable Business Growth recently

BHEL has joined hands with a UN body 'Global Compact for greater focus on corporate social responsibility.

Women Empowerment
1 ) Industrial zones were being set up. As a result of the extensive use of machines particularly in the field of textile and clothing, manpower was greatly needed to work in factories. Thus, female labour was absorbed by this industry. Today more than 75% of women work in textile factories.

2 ) Change in the structure of the family unit,more nuclear families the traditional role of women began to lose importance trade unions began to fight for equal wages ,thus authorities concerned were pressurized to change those obsolete laws and replace them with more equal ones.

Contd..

3) Another factor, which has played a major role in boosting up the status of the women, is education 4) Media keeps us informed about changes occurring in western society where women are gaining an increasing respect, thus affecting mentality of Indian women. 5) Modernization is taking place, the role of the women will keep changing. Many young women are postponing their marriages to lay more emphasis on their personal career.

The Business tree

WOMEN

FAMILY STRUCTURE

CHILDREN Business
EDUCATION

WOMEN

In 2009, the Male to Female ratio was 1.06 male(s)/female

Employment of Women in organized sector was 18.8% in 2002 which rose to 18.8% in 2004 Female literacy rate was 54.5% as compared to Male Literacy rate which is 76.9% in 2009

Women in all walks of life

A women's role has changed tremendously and is making its greatest impact in our society today. Women's role has changed at an accelerating rate and have part in areas such as Politics, Professional Training Jobs, Medicine, Business and Law. Discriminating women on the basis of gender diminished, as women won applauds in all the fields of life including politics, sports and even in defense services.

Taking Over Male-Dominated Industries

Ritu kumar, The fashion designer queen. Outstanding Women Entrepreneur Award Managing Director, Britannia Industries

CEO of JP Morgan Asia Pacific Kalpana Morparia 11th Rajiv Gandhi Awards

Chairman, Vandana Luthra Curls and Curves (VLCC)

The film industry too has a seen an increase in number of actresses and starlets

Sports

Politics
Sunita Narain,

Environmentalist

From housewife to corporate women tycoon

Transition Miss Universe Miss world Mrs India

From Purdah system to becoming the Face of the world

The changing trends in Rural Area

Samaj Driven to Self Driven
Restricted to kitchen Starting cottage industry

Women Empowerment and micro credit Self Help Group Model:

Savings

Credit SHG members Savings SHG group Trainings

Credit

Support and linkage services

Job work Business development

NGOs
Banks Support and linkage services

Beauty Culture class Quite popular

Typing classes Job Oriented course enabling them to get wage employment

Various steps taken by Selp Help Gropus

Rural women in Tamil Nadu are independently participating in the business of making chapattis under the guidance of self-help groups.
A group of 20 women are working under the self-help group Shivaskathi Mahalir Sangam. SHG Poverty eradicators We have received an order of 3000 chapattis from the TVS Company near Kothandapalli. Earlier, we used to face lot of difficulties, but now we are earning 2000 out of these 3000 chapattis. We have received 22650 rupees from the Central Government funds as the loan from the banks, said Laxmi, member of the Shivasakti Women Group.

URBAN CONTRIBUTION TO RURAL:

Modern agricultural inputs Tools and implements for rural industries, transport and communication Goods and services for rural housing, construction of social infrastructure and electrification Education, health and medical services Food processing Marketing services Demand for rural products

Various Social schemes

Annapurna Scheme Assistance to NGOs CAPART Sponsored Freedom Fighters Pension Scheme Growth Center Scheme Liberation and Rehabilitation Scheme Maternity Benefit Scheme Members of Parliament Local Area Development Scheme National Family Benefit Scheme National Old Age Pension Scheme Others Prohibition and Drug Abuse Prevention Scheme Short Stay Homes Social Defence Scheme Socio-Economic Programme

Women reservation bill,2010

One-third of the total available seats would be reserved for women in national, state, or local governments. And this number will be 181 . The Bill seeks to reserve for women 181 of the 543 seats in the Lok Sabha and 1,370 out of a total of 4,109 seats in the 28 State Assemblies. The womens reservation Bill was finally passed in the Rajya Sabha with 186 members voting for it and only one voting against it. Now the bill will be introduced in the Lok Sabha

EDUCATION

A person is said to be literate if he/ she is 15 years and above and can read and write Approximately 35% of illiterate world population is of India In 2007, adult literacy rate is 66% from 12% in 1947 In 2009 Literacy rate for men was 76.9% for men and 54.5% for women Kerala is the most literate state in India, with 90.86% literacy and Bihar is the least literate state with 47% literacy. To promote Education Govt. launched Sarva Shiksha Abhiyan to provide free and compulsory education for age group 614 years, Mid Day Meal scheme etc.

Educational interventions preventing deviancy at the very onset

Balwaris
Gali

Schools Learning Centers

Continued
7 Balwaris catering to 175 children for early childhood care and education

76

gali schools catering to 1750 children who have never been to school to prepare them for mainstream
50

learning centers catering to 1000 children for out of school children to minimize their loss

A Balwari Class

A Gali School

Primary Education at the Rural Development Complex

An audio visual class in progress in the community

The overall Plan budget for higher education is to be increased by Rs.2,000 crore over Interim B.E. 2009-10.

Children During their Computer Class

Education
19 per cent of Worlds Children live in India .

Free and Compulsory Education Act 2009 to provide for free and compulsory education for all children o the age 6 to 14 years, was published in the Gazette of India on August 27, 2009

Children in the age group of 5-14 constitute about 253 Million (24.6 Per cent) 87 Million children (34 per cent of total population of children in the country) are not attending educational institutions

Mid Day Meal scheme

Children continue to form a sizeable portion of labor force in several fields of employment around the world.
Not in Labor Force Schooling status Not Attending Attending 41041287 221878607

In Labor force
No of children 7678681 1371027

All children

48713707 223263012

All children

262919894

9049708 Percentage of children

2.82 0.5 3.33

271976719

Not Attending Attending All children

15.09 81.58 96.67

17.91 82.09 100

Regional Distribution of child labour

Distribution of child labor is not uniform across different states. The highest percentage is in Andhra Pradesh ( around 6.6%) The lowest percentage is in Kerala ( around 0.2%) Most of the poorer states have higher no of child workers.

Women groups acting as agents of change

Nine Adult Education Group Catering to 120 women

. . . Treatment and awareness camps

As far as Child Health is concerned, India today has disturbing figures like 5000 children under 5 dying every single day

. . Mobile health services

Some rural areas are still behind and devoid of major advancements

Indian village marks 25 years in dark despite electric posts February 14, 2010,CNN world

For a village in India's faraway northeast, it is time for an unusual jubilee: Posts to convey electrical power arrived in Kanugaon in 1985. In 2010, residents still find themselves without electricity -- leading them to mark the 25th anniversary of what they refer to as a life in darkness. The district of Mainpuri in Uttar Pradesh, is also one such unfortunate village

A degree college in a village which does not have a proper primary school

Village is about 30 km from Etawah

Points out a District administration official.

People first need primary schools. The literacy level in the entire district is extremely poor. What will people do with a college,

Child marriage is still prevalent in India.

One such gory incident recently came to the fore in a remote village of Kathua district, in Jammu and Kashmir (J & K),

where a 10-year-old girl of class IV was sold to a man three times of her age.
The blog of the Lutheran World Federation (LWF) Youth Desk

Changes in marketing Practices

CHILDREN

How children are affecting business dicisions.

SAFFOLA My Daddy Strongest Though Saffolas target market is not children.

Esteem: My papas big car

Lilliput Kidswear Ltd. had an annual turnover of Rs 182 crores in FY 06-07. Lilliput is currently growing @ 88.5%

Babies are the most adorable ones that any parent can have.

project sales in the babycare supplies market shall touch $6.6 Billion by 2010.

TO Tap the Rural market: Project Shakti

Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti. This project was started in 2001 with the aim of increasing the companys rural distribution reach as well as providing rural women with income-generating opportunities. This is a case where the social goals are helping achieve business goals. The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village.

The representative of the company meets the panchayat and the village head and identify the woman who they believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through petty shops at home. On an average a Shakti Amma makes a 10% margin on the products she sells.

Commercialized beauty

Commercialised beauty
Earlier

Women used to utilize household products like : Turmeric, Besan, multani mitti, lemon, rose leaves,orange peel off.

Now..

Uncountable creams, shampoos, soaps, hair-oils etc

Cream itself has uncountable varieties anti wrinkle cream Sunscreen Anti ageing Fairness cream Moisturizing lotion

No wonder the Indian beauty market is growing at 13% P.A and valued at $8.3 bn

Numerous fitness centres Saloons are mushrooming in every corner. Spas increasing demand

The metrosexual man wants it all

Its not a womans domain anymore. Men staying glued to mirror or hopping to beauty salons to enhance their looks is becoming quite common. Whether he is an executive, a college student or an entrepreneur, he is very much into the endlessly-admiringoneself syndrome. Due to globalization in the last two decades, people have become more aware.

Earlier there were only few advertisements targeting men soaps, shaving foams - but now you see so many ads targeting men like fairness creams, deodorants and apparels.

As the media reaches every corner of India and so these products find a place in every household.

Increasing awareness among Indians

The Indians today are becoming Health conscious.

No doubt there has been an increasing rate of fast food joints in the country, but the awareness regarding fitness has made gyming and weight loss programs a craze among Indians.

Size zero craze

Facts on Social sector development

Fiscal 2009-10 saw the strengthening of several public initiatives and programmes with a view to cushioning the impact of the global slowdown on the more vulnerable segments of the population in the country. While some of these programmes were a part of the ongoing interventions to give effect to a more inclusive development strategy. Thus emphasis in favour of higher allocation to social-sector development given in recent years continued to be reflected in the allocations under the Union Budget 2009-10.

The share of Central Government expenditure on social services including rural development in total expenditure (Plan and non-Plan) increased to 19.46 per cent in 2009-10 from about 10.46 per cent in 2003-04

Contd..

Sector-specific increases including in education, health and rural development were reinforced in the Budget allocations for 2009-10

Contd..

Of the total number of 7,073 sanctioned ICDS(Integrated Child Development Services) projects,6,196 were operational by September 30, 2009.

Thank You

Conclusion
o o

Socio- Cultural factors influence business and managerial decision making to a large extent. An organization which ignores these factors is moving towards its own doom. One cannot expect loyal customers until one conforms to their social and cultural norms. We need bold, vigorous and proportional allocations to combat issues like Child Labor, School dropouts, Infant mortality, Malnutrition etc. However, the allocation of 40,100 crores to the NREGA and the 7,266 crores drought relief package for Bundelkhand is laudable. This allocation to Bundelkhand will revive the hopes of a better future for thousands of children affected by the severe drought in the belts of Uttar Pradesh and Madhya Pradesh.

References:

http://www.babylon.com/definition/Sociocultural_Environment/Engl ish http://en.wikipedia.org/wiki/Society http://ignitethemind.today.com/2009/01/04/cultural-conformity-anecessary-evil-or-a-tool-of-survival-2/ Economic Survey 09-10 The Economics times The Indian Express.com Blog of the Lutheran World Federation (LWF) Youth Desk. The Hindu Business Line Women mean business. Globalshiksha.com http://www.scribd.com Indian Labor Journal October 2009 (Anoop K Satpathy) Economic & Political Weekly Child Labor a vicious cycle (Kiran Bhatty) Modern Child Slavery ( Youth Advocate Program )

References:

Economictimes.com Hindustantimes.com KPMG International Survey of CSR Reporting (2009) www.youthportal.gov.in Wall Street Journal McKinsey Global Survey June 2009 IBEF.org Indianstats.com Reuters.com http://www.geert-hofstede.com ASSOCHAMs Eco Pulse Study on CSR 2009-10 FORBES list.