UNIVERSITY OF MADRAS

UNIT 3: SOCIAL ENVIRONMENT

Chapter Objectives
The objectives of this chapter are:-
 To describe what is meant by "culture" and the numerous ways which have been
devised to study it.
 To give an understanding of how "culture" effects global marketing planning.
 To show why the study of "culture" is important to marketers.
 To enable the students to know the factors influencing the cultural changes in the
Business Climate.
The social environment of business includes social factors like customs, traditions, values,
beliefs, poverty, literacy, life expectancy rate etc. The social structure and the values that a
society cherishes have a considerable influence on the functioning of business firms. For
example, during festive seasons there is an increase in the demand for new clothes, sweets,
fruits, flower, etc. Due to increase in literacy rate the consumers are becoming more
conscious of the quality of the products. Due to change in family composition, more nuclear
families with single child concepts have come up. This increases the demand for the different
types of household goods. It may be noted that the consumption patterns, the dressing and
living styles of people belonging to different social structures and culture vary significantly
Social and cultural aspects of a society form its very nature. As "culture" is the essence of a
society, this chapter will concentrate on a discussion of it only. Of all the so called
"environmental uncontrollables", culture, or at least the study of it, is one of the most difficult
to comprehend, take account of and harness to advantage. This is particularly so when the
product or service is "culture bound". Such products and services include those which are
generally indigenous by nature and/or of relatively small value and very common. This is
particularly true of foodstuffs. Sadza in Zimbabwe, a staple food made from maize meal,
would not go down well in Beverley Hills, California. Neither would Middle Eastern sheep
eyes menus. Products of a more technical nature, like computers, on the other hand, have a
universal appeal.
However there is plenty of evidence to suggest that, with shrinking communications and with
more people than ever travelling, even the most culture bound product or service can, and is,
finding a world market niche. So even the infamous Veldschoen footwear of the South
African pioneers has found its way into most corners of the world.
Heritage
According to oxford dictionary heritage means, property that is or may be inherited; an
inheritance.
Cultural heritage, also known as "national heritage" or just "heritage", is the legacy of
tangible artefacts and intangible attributes, activities or events of a group or society that are
inherited from past generations, maintained in the present and bestowed for the benefit of
future generations.
Social attitudes
Attitude means the way a person views something or tends to behave towards it, often in an
evaluative way.
Further it can be said as the evaluations of people to make objects, ideas, events, of other
people. Attitudes can be positive or negative. Explicit attitudes are conscious beliefs that can
guide decisions and behaviour. Implicit attitudes are unconscious beliefs that can still
influence decisions and behaviour.
Impact of foreign culture, caste and communities:
Doing business on the international level presents many challenges because of a variety of
factors which differ from one market to the other. These differences are basically informed
by the environment of the host country, which is often different from that at home. One of the
environmental factors that present such a challenge is culture.
What is culture?
Whilst on the surface most countries of the world demonstrate cultural similarities, there are
many differences, hidden below the surface. One can talk about "the West", but Italians and
English, both belonging to the so called "West", are very different in outlook when one looks
below the surface. The task of the global marketer is to find the similarities and differences in
culture and account for these in designing and developing marketing plans. Failure to do so
can be disasters.
According to Clifton, Culture can be defined as complex construct that embodies a people’s
knowledge, morals, art, beliefs, customs, laws and other capabilities gathered by a
community over time. The culture of the host country strongly impacts on the performance of
a firm that engages in international business. Notable aspects of culture central to the conduct
of international business include the social structure, religion, language and education.
Social Environmental structure has to do with how society is socially organized. It could be
looked at from the individual-group dimension, or from the social stratification dimension.
Some societies consider an individual the pillar of social organization. The challenge here
was how to instil a sense of teamwork among employees. It was an uphill task for managers
who had been socialized to believe in the superiority of teamwork, as individuals compete
against each other for results. On the Japanese market however, the firm found that emphasis
was on group, rather than individual performance. Though this is said to be the driving force
behind the successful companies in Japan, it is vilified for imbedding creativity, and is touted
as a stumbling block to dynamism. This, indeed, is a challenge the foreign firm has had to
deal with.
Social stratification has to do with placing members of society in certain classes. There are
those in the lower, middle and upper classes. Many times, this is borne out of one’s family
background, income or occupation. Those from the lower class only hope to move from that
class to the upper one through a process called social mobility, which is in most cases done
through education and job opportunities. When opportunities for mobility are suffocated,
there is likely to be conflict between the classes; and in the job situation, between
management and employees. Some societies have room for social mobility, while others do
not. A country like Britain has less social mobility. As a result, there is always simmering
tension between management and workers, which the firm has had to deal with from time to
time. When industrial disputes become frequent, the firm finds doing business in the country
quite expensive. Such a problem is not common in America, where social mobility is easy.
Thus operation in countries with various religious persuasions, which have an effect on its
operation, is difficult. In predominantly Christian countries such as Britain, America and
most of Africa, the spirit of entrepreneurship has helped expand the company’s operations
and profitability. Furthermore Christian Protestantism advocates for hard work and creation
of wealth for God’s glory, but abstinence from worldly pleasures. Since the resources earned
from working cannot be spend on leisurely pursuits, the only other option is to reinvest it in
expanding the business. The Christian ethic, which is a cultural issue, is supportive of the
entrepreneurial capitalist mindset.
Doing business in Islamic countries such as Saudi Arabia is rather tricky. In the first place,
the Islamic culture frowns upon charging interest on loan. Doing business in such an
environment has been very expensive. The fact that adherents of Islam do not work on
Fridays goes against the practice in other countries, and managers found it difficult making
adjustments. The Islamic culture also favours market based systems and when they suspect
one is making exorbitant profits, however justified, the establishment begins putting
sanctions in the company’s ways. This has hindered the company from making maximum
profits from its investment, which is the hallmark of the capitalist culture from where the
company originates. There have also been problems of negative perception of the company
because of the historical West-Islamic conflict, making the firm’s operations difficult. When
tensions between the two sides run high, sometimes the company’s property is destroyed, or
its products and services shunned by customers. This reduces the company’s profitability.
Most of the countries in which foreign companies operates have diverse linguistic
backgrounds. This has posed major problems, especially in Saudi Arabia, where most people
speak Arabic. Expatriate managers without the knowledge of Arabic have found it very hard
to communicate when marketing the company’s products and services. This has forced them
to attend Arabic classes so as to make them perform better. Most African countries with a
multiplicity of languages also pose problems of multiple cultures, which call for extensive
training on the part of managers for these regions.
Operations in China where Confucianism advocates for individual connections rather than the
rule of law have also been problematic. Business ethics have not been adhered to, making the
firm lose out on opportunities for lack of connections, referred to as Guanxi. Many foreign
companies has once lost case where a company that had breached a contract was left
unpunished because one the company’s top executives was a son to a leading politician.
Though this would appear to be unethical in most Western countries, it is perfectly normal in
China, as the company later came to learn. For the sake of survival, they have now been
forced to recruit well-connected local executives, and to enter partnerships with local
company’s belonging to senior government officials. This is normal in order in China.
Formal education determines the quality of skill, values, norms and the general socialization
of individuals. Foreign companies had problems in operating in countries such as Somalia
and Rwanda in Africa, which have no proper system of formal education. In most cases, the
firm has had to rely on expatriates to fill top management positions.
JOINT FAMILY SYSTEMS:
Joint family system is a very old concept. Under this system, all members of the family
would live together and enjoy the income of the family.
Here the father, mother, sons, daughters, sons-in-law, daughters-in-law, grand children,
uncles, Aunts and other close relatives live as one big family. The land and properties are
commonly owned and they work together to fulfil their wants. Generally, there is a kind of
social security for the weak and poor. It provides an insurance against unemployment.
Characteristics of Joint Family System
The joint family system has the following characteristic features:
1. The head of the family is given maximum power and authority.
2. The land and property belong to the family as a whole. The head of the family considered
as trustee of the property.
3. Income sources are pooled together.
4. All members earn as per their capacity but spend as per the needs of the family.
5. Same gods and goddesses are worshiped.
6. Joint family has common sufferings and rejoicing.
7. Family as a whole owns the entire means, production and consumption.
8. There is security against unemployment, sickness, old age etc.
Why is there nuclear family system mostly in Cities and towns
The joint family system in India does not exist in cities and towns due to the following
reasons.
1. Rise in Educational level.
2. Desire for Independence.
3. Economic Independence of Women.
4. Development of Transport and Communication facilities.
5. Impact of Western culture.
6. The increasing pressure of population on land.
7. Industrialization.
8. Spirit of individualism.
Impact of Joint Family System on Indian Business

Joint family system has a positive impact on social and cultural level in India. However, it
exerts a negative influence on Indian business.
In joint family system, all members of the family live together and in such a set up increase in
number of members will result in increase in population without the creation of additional
purchasing power particularly for luxurious goods. It is meaningless as far as business
concerns are concerned.
In a joint family system, members of the family hesitate to move away from their family for
taking up employment in distant place. It makes cost of labour high. The orthodoxy and
conservatism in joint family system leads to technological backwardness in Indian business.
In India, people are still in joint family system more especially in rural areas. The desire for
living an independent life among economically self-sufficient people may be there. But their
number is not very high.
LINGUISTIC AND RELIGIOUS GROUPS:
Prof. Terpstran has defined culture as follows:
"The integrated sum total of learned behavioural traits that are manifest and shared by
members of society"
Culture, therefore, according to this definition, is not transmitted genealogically. It is not, also
innate, but learned. Facets of culture are interrelated and it is shared by members of a group
who define the boundaries. Often different cultures exist side by side within countries,
especially in Africa. It is not uncommon to have a European culture, alongside an indigenous
culture, say, for example, Shona, in Zimbabwe. Culture also reveals itself in many ways and
in preferences for colours, styles, religion, family ties and so on. The colour red is very
popular in the west, but not popular in Islamic countries, where sober colours like black are
preferred.
Much argument in the study of culture has revolved around the "standardisation" versus
"adaption" question. In the search for standardisation certain "universals" can be identified.
Prof. Murdock suggested a list, including age grading, religious rituals and athletic sport.
Prof. Levitt suggested that traditional differences in task and doing business were breaking
down and this meant that standardisation rather than adaption is becoming increasingly
prevalent.
Culture, alongside economic factors, is probably one of the most important environmental
variables to consider in global marketing. Culture is very often hidden from view and can be
easily overlooked. Similarly, the need to overcome cultural myopia is paramount.
Approaches to the study of culture:
Prof. Keegan has suggested a number of approaches to the study of culture including the
anthropological approach, Maslow's approach, the Self- Reference Criterion (SRC), diffusion
theory, high and low context cultures and perception. There are briefly reviewed here.
Anthropological approach
Culture can be deep seated and, to the untrained can appear bizarre. The Muslim culture of
covering the female form may be alien, to those cultures which openly flaunt the female
form. The anthropologist, though a time consuming process, considers behaviour in the light
of experiencing it at first hand. In order to understand beliefs, motives and values, the
anthropologist studies the country in question anthropology and unearths the reasons for
what, apparently, appears bizarre.
Maslow approach
Abraham Harold Maslow was an American psychologist who was best known for creating
Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate
human needs in priority, culminating in self-actualization.
In searching for culture universals, Maslow's hierarchy of needs gives a useful analytical
framework. Maslow hypothesised that people's desires can be arranged into a hierarchy of
needs of relative potency. As soon as the "lower" needs are filled, other and higher needs
emerge immediately to dominate the individual. When these higher needs are fulfilled, other
new and still higher needs emerge. The hierarchy is illustrated in the figure below.
Maslow hierarchy of needs
Physiological needs are at the bottom of the hierarchy. These are basic needs to be satisfied
like food, water, air, comfort. The next need is safety - a feeling of well being. Social needs
are those related to developing love and relationships. Once these lower needs are fulfilled
"higher" needs emerge like esteem - self respect - and the need for status improving goods.
The highest order is self actualisation where one can now afford to express oneself as all
other needs have been met.
Whilst the hypothesis is simplistic it does give an insight into universal truisms. In Africa, for
example, in food marketing, emphasis may be laid on the three lower level needs, whereas in
the developed countries, whilst still applicable, food may be bought to meet higher needs. For
example, the purchase of champagne or caviar may relate to esteem needs.
The Case Of Maize Meat In Africa
Introduced by the white settler, maize meat is the staple diet of the population of countries in
Eastern and Southern Africa, Zambia, for example is capable of producing over 30 million x
90 Kg bags with a marketable surplus of 20 million x 90 Kg bags, most of which goes to feed
the urban population. For a lot of people, unable to improve their lot, this remains as the
staple diet throughout their lives. However, many Africans who are able to improve their lot,
progress on to other forms of nourishment -fish. potatoes, good meat cuts and even fast foods,
some of this brought about by social interaction. Interestingly enough, maize is still often
eaten despite the social and economic progression that an individual may make.
The Self Reference Criterion (SRC)
Perception of market needs can be blocked by one's own cultural experience. Lee
(1965) suggested a way, whereby one could systematically reduce this perception. He
suggested a four point approach.
a) Define the problem or goal in terms of home country traits, habits and norms.
b) Define the problem or goal in terms of the foreign culture traits, habits and norms.
c) Isolate the SRC influence in the problem and examine it carefully to see how it
complicates the pattern.
d) Redefine the problem without the SRC influence and solve for the foreign market
situation.
The problem with this approach is that, as stated earlier, culture may be hidden or non
apparent. Uneartherning the factors in many therefore be difficult. Nonetheless, the approach
gives useful guidelines on the extent for the need of standardisation or adaption in marketing
planning.
Diffusion theory
Many studies have been made since the 1930's to assess how new innovations are diffused in
a society. One of the most prolific writers was Everett Rogers. In his book, "Diffusion of
Innovations" (1962) he suggested that adoption was a social phenomenon, characterised by a
normal distribution. (See the below figure)
Adopter categories
In this case the innovators are of small percent who like to be seen to lead, the others,
increasingly more conservative, take the innovation on. The adoption process itself is done in
a series of stages from awareness of the product, through to interest, evaluation, trial and
either adoption or rejection (in the case of non adopters). The speed of the adoption process
depends on the relative advantage provided by the product, how compatible or not it is with
current values or experiences, its complexity, divisibility (how quickly it can be tried) and
how quickly it can be communicated to the potential market. In international marketing an
assessment of the product or service in terms of these latter factors is very useful to the speed
of its adoption. Most horticultural products, for example, have no problem in transfer from
one culture to another, however specific types may have. It is unlikely that produce like
"squash" would sell well in Europe, but it does in Zimbabwe.
High and low context cultures
The concept of high and low context was introduced by anthropologist Edward T. Hall in
his 1976 book Beyond Culture, and it refers to the way cultures communicate of
understanding different cultural orientations. In low context cultures messages have to be
explicit, in high context cultures less information is required in the verbal message. In low
context cultures, for example like Northern Europe, a person's word is not to be relied on,
things must be written. On the other hand, in high context cultures, like Japan and the Middle
East, a person's word is their bond. It is primarily a question of trust.
Perception
Perception is the ability to see what is in culture. The SRC can be a very powerful negative
force. High perceptual skills need to be developed so that no one misperceive a situation,
which could lead to negative consequences
Many of these theories and approaches have been "borrowed" from other contexts
themselves, but they do give a useful insight into how one might avoid a number of pitfalls of
culture in doing business overseas.
Consumer products are likely to be more culturally sensitive than business to business
products, primarily because technology can be universally learned. However there are
dangers in over generalisations. For example, drink can be very universal and yet culture
bound. Whilst appealing to a very universal physiological need - thirst - different drink can
satiate the same need. Tea is a very English habit, coffee American but neither are universals
in African culture. However, Coca Cola may be acceptable in all three cultures, with even the
same advertising appeal.
Nationalism
Nationalism is a cultural trait which is increasingly surfacing. The break-up of Yugoslavia
and the USSR are witness to the fact. In Western, developed countries a high degree of
interdependence exists, so it is not so easy to be all that independent. In fact, blocs like
NAFTA and the EU are, if anything, becoming more economically independent. However,
less developed countries do not yet have the same interdependence in general, and so
organisations need to reassess their contribution to the development of nations to make sure
that they are not holding them "to hostage".
Culture is a very powerful variable and cannot be ignored. Whilst "universals" are sought
there is still a need to understand local customs and attitudes. These are usually no better
understood than by the making use of in country personnel.
The elements of culture
The major elements of culture are material culture, language, aesthetics, education, religion,
attitudes and values and social organisation.
Material culture
Material culture refers to tools, artefacts and technology. Before marketing in a foreign
culture it is important to assess the material culture like transport and communication. Input-
output tables may be useful in assessing this. All aspects of marketing are affected by
material culture like sources of power for products, media availability and distribution. For
example, refrigerated transport does not exist in many African countries. Material culture
introductions into a country may bring about cultural changes which may or may not be
desirable. (See case)
Case: Canned Drinks In Zimbabwe
Until the early 1990s, Zimbabwe did not allow both alcoholic and non alcoholic beverages to
be packed in cans. There were both economic and environmental reasons for this.
Economically, Zimbabwe did not have the production facility for canning. Environ mentally,
Zimbabwe had seen the litter in Botswana, caused by discarded empty cans. By putting a
deposit on glass containers they ensured the empties were returned to the retailer, thus
avoiding a litter problem.
However, with the advent of trade liberalisation under the Structural Reform Program, the
Government of Zimbabwe decided to allow the import of some 4 million cans as an
experiment, after which it would assess the environmental impact. The result was a huge
influx of canned alcoholic and other beverages not just from nearby Botswana and South
Africa but from Australia, USA and Europe
Language
Language reflects the nature and values of society. There may be many sub-cultural
languages like dialects which may have to be accounted for. Some countries have two or
three languages. In Zimbabwe there are three languages - English, Shona and Ndebele with
numerous dialects. In Nigeria, some linguistic groups have engaged in hostile activities.
Language can cause communication problems - especially in the use of media or written
material. It is best to learn the language or engage someone who understands it well.
Aesthetics
Aesthetics refer to the ideas in a culture concerning beauty and good taste as expressed in the
arts -music, art, drama and dancing and the particular appreciation of colour and form.
African music is different in form to Western music. Aesthetic differences affect design,
colours, packaging, brand names and media messages. For example, unless explained, the
brand name FAVCO would mean nothing to Western importers in Zimbabwe most people
would instantly recognise FAVCO as the brand of horticultural produce.
Education
Education refers to the transmission of skills, ideas and attitudes as well as training in
particular disciplines. Education can transmit cultural ideas or be used for change, for
example the local university can build up an economy's performance.
The UN agency UNESCO gathers data on education information. For example it shows in
Ethiopia only 12% of the viable age group enrol at secondary school, but the figure is 97% in
the USA.
Education levels, or lack of it, affect marketers in a number of ways:
 advertising programmes and labelling
 girls and women excluded from formal education (literacy rates)
 conducting market research
 complex products with instructions
 relations with distributors and,
 support sources - finance, advancing agencies etc.
Religion
Religion provides the best insight into a society's behaviour and helps answer the question
why people behave rather than how they behave.
A survey in the early 1980s revealed the following religious groupings the below table.
Table 3.1 Religious groupings
Groups Million
Animism 300
Buddhism 280
Christianity 1500
Hinduism 600
Islam 800
Shinto 120
Religion can affect marketing in a number of ways:
 religious holidays - Ramadan cannot get access to consumers as shops are closed.
 consumption patterns - fish for Catholics on Friday
 economic role of women – Islam caste systems - difficulty in getting to different costs
for segmentation/niche marketing
 joint and extended families - Hinduism and organizational structures; institution of the
church - Iran and its effect on advertising, "Western" images market segments - Maylasia
- Malay, Chinese and Indian cultures making market segmentation sensitivity is needed
to be alert to religious differences.
Attitudes and values
Values often have a religious foundation, and attitudes relate to economic activities. It is
essential to ascertain attitudes towards marketing activities which lead to wealth or material
gain, for example, in Buddhist society these may not be relevant.
Also "change" may not be needed, or even wanted, and it may be better to relate products to
traditional values rather than just new ones. Many African societies are risk averse, therefore,
entrepreneurialism may not always be relevant. Attitudes are always precursors of human
behaviour and so it is essential that research is done carefully on these.
Social organisation
Refers to the way people relate to each other, for example, extended families, units, kinship.
In some countries kinship may be a tribe and so segmentation may have to be based on this.
Other forms of groups may be religious or political, age, caste and so on. All these groups
may affect the marketer in his planning.
There are other aspects of culture, but the above covers the main ingredients. In one form
or/and other these have to be taken account of when marketing internationally works.
Hofstede's contribution
One of the most prolific writers on culture is Hofstede, a Dutchman. Working with two
colleagues Franke and Bond (1991) he sought to explain why "culture" could be a better
discriminator than "material" or "structural conditions" in explaining why some countries
gain a competitive advantage and others do not.
They noted that in Michael Porter's 1990 book on the "Competitive Advantage of Nations" he
popularized the idea that nations have competitive advantage over others. Unfortunately he
stopped short of the key question as to why certain nations develop competitive advantage
and others do not. In their study Hofstede, Franke and Bond sought to answer that question in
research entitled "Cultural Roots of Economic Performance". They hypothesized that
differences in cultural values, rather than in material and structural conditions (the private and
state control) are ultimate determinants of human organization and behaviour, and thus of
economic growth.
They took two examples of 18 and 20 nations, comparing rich countries like the USA, UK,
Canada and Australia, to poor countries like India, Pakistan and Thailand and those on the
rich/poor dividing line like Hong Kong, Taiwan and Singapore. Nigeria and Zimbabwe were
in the study.
In order to understand the results a word of explanation is needed on what the authors mean
by "cultural variables". There are as follows:
1. "Power distance" - Society's endorsement of inequality, and its inverse as the expectation
of relative equality in organizations and institutions
2. "Individualism" - The tendency of individuals primarily to look after themselves and
their immediate families and its inverse is the integration of people into cohesive groups
3. "Masculinity" - An assertive or competitive orientation, as well as sex role distribution
and its inverse is a more modest and caring attitude towards others
4. "Uncertainty Avoidance" - Taps a feeling of discomfort in unstructured or unusual
circumstances whilst the inverse show tolerance of new or ambiguous circumstances
5. "Confucian Dynamism" - Is an acceptance of the legitimacy of hierarchy and the valuing
of perseverance and thrift, all without undue emphasis on tradition and social obligations
which could impede business initiative.
6. "Integration" - Degree of tolerance, harmony and friendship a society endorses, at the
expense of competitiveness: it has a "broadly integrative, socially stabilizing emphasis"
7. "Human Heartedness" - Open-hearted patience, courtesy and kindness.
8. "Moral Discipline" - Rigid distancing from affairs of the world.
Now, the results of the culture have a revealing, and sobering effect on economies seeking
economic growth via structural or material changes viz:
a) "Confucian dynamism" is the most consistent explanation for the difference between
different countries' economic growth. This index appears to explain the relative success of
East Asian economies over the past quarter century.
b) "Individualism" is the next best explanatory index. This is a liability in a world in which
group cohesion appears to be a key requirement for collective economic effectiveness.
c) In extrapolations on the data after 1980 economic growth seems to be aided by relative
equality of power among people in organizations (lower power distance) and by a tendency
towards competitiveness at the expense of friendship and harmony (lower integration).
In conclusion, therefore, "better" economic growth can be explained more by culture than
structural or material changes. Economic power, from this study, comes from "dynamism" -
the acceptance of the legitimacy of hierarchy and the valuing of perseverance and thrift, all
without undue emphasis on tradition and social obligations which could impede business
initiative; "individualism" - the tendency of individuals primarily to look after themselves and
their immediate families (its inverse is the integration of people into cohesive groups) and
finally a tendency towards competitiveness at the expense of friendship and harmony.
Whilst debatable, this research may attempt to explain why the Far East, as compared to say
Africa, has prospered so remarkably in the last ten years. The cultural values of the
populations of the East may be very different to those of Africa. However, further evidence is
required before generalisation can be made.
Culture has both a pervasive and changing influence on each national market environment.
Marketers must either respond or change to it. Whilst internationalism in itself may go some
way to changing cultural values, it will not change values to such a degree that true
international standardisation can exist. The world would be a poorer place if it ever happened.
Types of Groups
Sociologist Charles Horton Cooley (1864–1929) suggested that groups can broadly be
divided into two categories: primary groups and secondary groups (Cooley 1909).
According to Cooley, primary groups play the most critical role in our lives. The primary
group is usually fairly small and is made up of individuals who generally engage face-to-face
in long-term, emotional ways. This group serves emotional needs: expressive
functions rather than pragmatic ones. The primary group is usually made up of significant
others—those individuals who have the most impact on our socialization. The best example
of a primary group is the family.
Secondary groups are often larger and impersonal. They may also be task focused and time
limited. These groups serve an instrumental function rather than an expressive one,
meaning that their role is more goal or task oriented than emotional. A classroom or office
can be an example of a secondary group. Neither primary nor secondary groups are bound by
strict definitions or set limits. In fact, people can move from one group to another. A graduate
seminar, for example, can start as a secondary group focused on the class at hand, but as the
students work together throughout their program, they may find common interests and strong
ties that transform them into a primary group.
Peter Marsden (1987) refers to one’s group of close social contacts as a core discussion
group. These are individuals with whom you can discuss important personal matters or with
whom you choose to spend your free time. Christakis and Fowler (2009) found that the
average North American had four close personal contacts. However, 12 percent of their
sample had no close personal contacts of this sort, while 5 percent had more than eight close
personal contacts. Half of the people listed in the core discussion group were characterized as
friends, as might be expected, but the other half included family members, spouses, children,
colleagues, and professional consultants of various sorts. Marsden’s original research from
the 1980s showed that the size of the core discussion group decreases as one ages, there was
no difference in size between men and women, and those with a post-secondary degree had
core discussion groups almost twice the size of those who had not completed high school.
Factors Influencing the Social Environment in an Organization:
The relationships between individuals in an organization are influenced by many factors.
Personalities, ways of working and cultural backgrounds all combine to create a workplace
that can be vibrant and exciting or stressful and alienating, depending on how people cope
with the challenges of working together. A commitment from all parties to developing
positive working relationships is key to creating a successful workplace.
Job Satisfaction
The social environment of any organization is heavily influenced by the levels of satisfaction
experienced by individuals. People who are unhappy at their jobs may still make an effort to
reach others well, but will just as frequently become sullen, uncooperative and
counterproductive. When job dissatisfaction leads to poor interpersonal relationships, those
relationships can then contribute to a poor working environment, creating a downward spiral
in the social environment. Conversely, when the majority are happy and satisfied at their
jobs, they are more likely to contribute positively to company culture and help to create a
mutually agreeable environment for everyone involved.
Teamwork
Cooperation in the workplace helps to create a supportive social environment. When people
work together on projects rather than competing, they learn that their best interests are shared
together, and that what benefits their co-workers also benefits them. Progressive corporate
managers are aware of this fact and go to great lengths to foster teamwork amongst their
employees. While some jobs will always be more efficiently done by individuals, a dominant
culture of teamwork within a workplace helps to create a social environment that is
conducive to good work, whether it is done in a team or individually.
Politics
Office politics are notorious for undermining a healthy social environment. Sensitive issues
can range from gender relations to religion to race to actual politics, such as co-workers who
become excessively adamant about supporting different political parties. Most workplaces
have guidelines and rules of conduct designed to prevent this kind of disruption and
interpersonal tension. In work situations, employees are expected to refrain from sexist
language, aggressive behaviour, and demeaning comments about any aspect of other people
whom they do not like. The cliche of "not saying anything at all" when you have nothing
good to say is very applicable to organizational environments where people need to get along.
Conflict
When conflict does erupt, it has a major effect on the social environment of an organization.
Ongoing feuds between one or more people can disrupt the work of everyone around them
and lead to decreased productivity, lowered job satisfaction and damaged morale. When
friends of conflicting individuals begin to jump into the fray, it can sometimes lead to an
office-wide feud that can be very difficult for management to handle. Talented managers are
able to sense the seeds of these sorts of conflicts and resolve them quickly before they get out
of hand.

Social responsibility of business

Social responsibility in business or corporate social responsibility (CSR) pertains to people
and organizations behaving and conducting business ethically and with sensitivity towards
social, cultural, economic, and environmental issues.

The social responsibility of business means various obligations or responsibilities or duties

that a business-organization has towards the society within which it exists and operates from.
Generally, the social responsibility of business comprises of certain duties towards entities,
which are depicted and listed below.
1. Shareholders or investors who contribute funds for business.
2. Employees and others that make up its personnel.
3. Consumers or customers who consumes and/or uses its outputs (products and/or
services).
4. Government and local administrative bodies that regulate its commercial activities in
their jurisdictions.
5. Members of a local community who are either directly or indirectly influenced by its
activities in their area.
6. Surrounding environment of a location from it operates.
7. The general public that makes up a big part of society.
The social responsibility of business comprises of the following obligations:
1. A business must give a proper dividend to its shareholders or investors.
2. It must provide fair wages and salaries with good working conditions.
3. It must provide a regular supply of good quality goods and/or services to its
consumers/customers at reasonable prices.
4. It must abide by all government rules and regulations, supports its business-related
policies and should pay fair taxes without keeping any delays or dues.
5. It must also contribute in betterment of a local community by doing generous activities
like building schools, colleges, hospitals, etc.
6. It must take immense care to see that its activities neither directly nor indirectly create a
havoc on the vitality of its surrounding environment.
7. It should maintain a stringent policy to curb or control pollution in regard to
contamination of air, water, land, sound and radiation leakages. Here, to do so, it must
hire experienced professional individuals who are experts in their respective fields.
8. It should also offer social-welfare services to the general public.
The core objectives of social responsibility of business are as follows:
1. It is a concept that implies a business must operate (function) with a firm mindset to
protect and promote the interest and welfare of society.
 2. Profit (earned through any means) must not be its only highest objective else
contributions made for betterment and progress of a society must also be given a prime
importance.
3. It must honestly fulfill its social responsibilities in regard to the welfare of society in
which it operates and whose resources & infrastructures it makes use of to earn huge
profits.
4. It should never neglect (avoid) its responsibilities towards society in which it flourishes.
Now let's discuss, how the survival, growth and success of business are linked and dependent
on sincere execution of its social responsibilities.
Note: Refer above figure and try to co-relate articles given in this image with following
points of justification.

1. Shareholders or investors
Social responsibility of business towards its shareholders or investors is most important of all
other obligations.
If a business satisfies its funders, they are likely to invest more money in a project. As a
result, more funds will flow in and the same can be utilized to modernize, expand and
diversify the existing activities on a larger scale. Happy financiers can fulfill the rising
demand of funds needed for its growth and expansion.

2. Personnel
Social responsibility of business towards its personnel is important because they are the
wheels of an organization. Without their support, the commercial institution simply can't
function or operate.
If a business takes care of the needs of its human resource (for e.g. of office staff, employees,
workers, etc.) wisely, it will boost the motivation and working spirit within an organization.
A happy employee usually gives his best to the organization in terms of quality labor and
timely output than an unsatisfied one. A pleasant working environment helps in improving
the efficiency and productivity of working people. A good remuneration policy attracts new
talented professionals who can further contribute in its growth and expansion.
Thus, if personnel is satisfied, then they will work together very hard and aid in increasing
the production, sales and profit.

3. Consumers or customers
Social responsibility of business towards its consumers or customers matters a lot from sales
and profit point of view. Its success is directly dependents on their level of satisfaction.
Higher their rate of satisfaction greater are the chances to succeed.
If a business rolls out good-quality products and/or delivers better quality services that too at
reasonable prices, then it is natural to attract lots of customers. If the quality-price ratio is
maintained well and consumers get worth for their money spend, this will surely satisfy them.
In a long run, customer loyalty and retention will grow, and this will ultimately lead to
profitability.

4. Government
Social responsibility of business towards government's regulatory bodies or agencies is quite
sensitive from the license's point of view. If permission is not granted or revoked abruptly, it
can result in huge losses to an organization. Therefore, compliance in this regard is necessary.
Furthermore, a business must also function within the demarcation of rules and policies as
formulated from time to time by the government of state or nation. It should respect laws and
abide by all established regulations while performing within the jurisdiction of state.
Some examples of activities a business can do in this regard:
 Licensing an organization,
 Seeking permissions wherever necessary,
 Paying fair taxes on time,
 Following labor, environmental and other laws, etc.
If laws are respected and followed, it creates a goodwill of business in eyes of authorities.
Overall, if a government is satisfied it will make favorable commercial policies, which will
ultimately open new opportunities and finally benefit the organization sooner or later.
Therefore, satisfaction of government and local administrative bodies is equally important for
legal continuation of business.

5. Local community
Social responsibility of business towards the local community of its established area is
significant. This is essential for smooth functioning of its activities without any agitations or
hindrances.
A business has a responsibility towards the local community besides which it is established
and operates from. Industrial activities carried out in a local-area affect the lives of many
people who reside in and around it. So, as a compensation for their hardship, an organization
must do something or other to alleviate the intensity of suffering.
As a service to the local community, a business can build:
 A trust-run hospital or health center for local patients,
 A primary and secondary school for local children,
 A diploma and degree college for local students,
 An employment center for recruiting skilled local people, etc.
Such activities to some-extend may satisfy the people that make local community and hence
their changes of agitations against an establishment are greatly reduced. This will ensure the
longevity of a business in a long run.

6. Environment
Social responsibility of business with respect to its surrounding environment can't be
sidelined at any cost. It must show a keen interest to safeguard and not harm the vitality of
the nature.
A business must take enough care to check that its activities don't create a negative impact on
the environment. For example, dumping of industrial wastes without proper treatment must
be strictly avoided. Guidelines as stipulated in the environmental laws must be sincerely
followed. Lives of all living beings are impacted either positively or negatively depending on
how well their surrounding environment is maintained (naturally or artificially). Humans also
are no exception to this. In other words, health of an environment influences the health of our
society.
Hence, environmental safety must not be an option else a top priority of every business.

7. Public
Finally, social responsibility of business in general can also contribute to make the lives of
people a little better.
Some examples of services towards public include:
 Building and maintaining devotional or spiritual places and gardens for people,
 Sponsoring the education of poor meritorious students,
 Organizing events for a social cause, etc.
Such philanthropic actions create a goodwill or fame for the business-organization in the
psyche of general public, which though slowly but ultimately pay off in a due course of time.
The world is recognizing the importance of social responsibility of business.

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