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Social and Cultural Environment

Social and Cultural Environment

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Published by: samrulezzz on May 21, 2010
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Social and Cultural Environment


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.


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.


Cultural Factors/ Social Structure


Religion and Caste
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 

Different people have their own religious convictions, beliefs, sentiments, customs, rituals, festivals etc. The cost of ignoring certain religious aspects could be effect organizational existence in international business. Religion may also influence the attitude towards work and 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.


 

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.


Consume preferences, Habits, Beliefs, Consumption
 

What is liked by people of one culture may not be liked by those of other culture. Many companies modify their products and promotion strategies to suite the tastes and preferences or other characteristics of the population 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.

Family System
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 

Family is a social institution. Concerns itself with love, sexual relationship, marriage, socialization of the child etc. Nuclear families have now become common in our society replacing the traditional joint family system. Women now enjoy equal status with men and most of them 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.



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


Demographic Transition
 

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


 

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. Increased saving habits of the consumer leads to the capital formation and even it boosts the banking sector.



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


Cultural Transmission

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


Impact of Culture on Business

1. Culture determines Goods and

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


2. People’s attitude to Business
 

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


3. Attitude to Work

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


4. 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


5. Collectivism and Individualism

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


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.


“ In order to effectively adopt, create and also to confirm a culture, the business people should have a thorough knowledge of the cultural environment.”

This will be useful to the management of the business in several ways-


People generally are conditioned to behave in a particular way and perform their work in a particular method. So awareness of their culture will help to understand their behaviour and conduct. by observing their cultural background, 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.

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


Social responsibility of Business
Business depends on the society on the society 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.


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 interests” “ What business does, over and above the statutory requirement, for the benefit of the society”


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


Dimensions of Social Responsibilities

1. Social Responsibility Towards Stockholders
   

Protect the capital. Providing fair and reasonable return. Stability of dividend Transparency in the business operation.


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



3.Social Responsibility Towards Consumers
 

Strive to improve product quality. Providing goods and services at fair and competitive price. Making arrangements for supply of goods and services. Satisfactory after sale services.


4. Social Responsibility Towards Competitors
  

Fair game in market. Engaging in healthy competition. Should not indulging in brand assassination


5. Social Responsibility Towards Government

 

Conducting business according rules and regulations enacted by govt. Regular payment of various taxes. Providing required information from time to time.


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 education opportunities.


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. Social involvement may create a better public image for the company which may help it in attracting customers. Social involvement may discourage additional govt. regulation and intervention.


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.


Business ethics


What is ethics?

“ Ethics refers to the code of conduct that guides an individual in dealing with others. It tells what is right and what is wrong”


What is Business ethics?
“ the term business ethics refer to the system of moral principles and rules of conduct applied to business.” “ 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 things”


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


 

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.


 

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


Types of Business ethics?
      

Personal Responsibility. Official Responsibility Personal Loyalties. Corporate Responsibilities. Economic Responsibilities. Technical Morality. Legal Responsibilities.


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


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.


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.


Moral sanctions
 

“sanctions” refer to the ways in which moral conduct 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.


Problems in Business ethics

 a. b. c.

Ethical decisions are difficult to make. They can not be programmed like production and inventory decisions. 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. Some ethical standards vary with the passage of time.


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


“ Social movement seeking to augment the rights and powers of the buyers in relation to sellers.” “ Consumerism may simply be expressed as ‘let the seller beware’ in comparison to the age ‘let the buyer beware’


Consumer Protection
 

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


 

Consumer protection is essential for following reasonsConsumer 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 or monopolies. To prevent exploitation of consumers from manufacturers.

Consumerism in India
 

1. 2.

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


Establishment of Consumer Organization

     

In the year 1965 housewives of Bombay established a voluntary consumer organization in the name of AWARE i.e. Association of Women Against Rising expenses. 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

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


Government Measures

1. 2.

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


Establishment of Public Sector

  

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


Statutory Regulation

Govt. has armed it self with a number of statutory 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


     

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



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


Consumer rights
    

Right Right Right Right Right

to to to to to

health and safety be informed choose be heard. seek redressal


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