Society and Business

IIM - Kozhikode

Mala Narang Reddy

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Evaluation

● Mid Term Exam - 35 %

● End Term Exam - 40 %
● Group Presentation - 25 %

Exam to be based on readings and class discussions.

Group presentation: on a social issue, policy, social

businesses, impact of business on society, etc.

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Course objectives

● Provide overview of socio-cultural, political, economic

changes
● Help develop critical ways of thinking
● Encourage engagement in informed analysis of various
issues in Indian society
● Provide social science perspective to understand issues
and aid in decision making as managers

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Significance of the Course
● Perspectives from different disciplines - give
management students a holistic understanding of issues
that are relevant for businesses / enable them to
function effectively and meaningfully
● Social science perspective is important for understanding
social problems - Looking at problems from different
perspectives; No particular viewpoint is right
● No universal laws can predict human behaviour

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Significance of the Course

● Management Science is concerned with human behaviour

● A broad knowledge of society - useful in dealing with
labor issues, HRM, understanding markets
● This understanding of society can guide our decision
making, impact the solutions we offer

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Significance of the Course

● Businesses / Industry operate in a social context

● Better understanding of the essential features of society
and key social problems / development related challenges
● Important to know the process of change in our society
and possible future trends
● Know about some social and economic policies that have
shaped the country; Domestic and global drivers of change
● Sustainability concerns

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Role of Business in Society

● Profit drives business: One of the main purpose of

business - earn income by way of profit.
● It is being increasingly realised nowadays that business
enterprises are part of the society and need to fulfill
several objectives, including social responsibility, to
survive and prosper in the long run.
● Too much emphasis on profit leads to the exclusion of
other objectives and this can be dangerous for good
business.

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Role of Business in Society

Social Responsibility: The obligation of business firms to

contribute resources for solving social problems and work in
a socially desirable manner

Is business a force for the good of the society?

Should businesses have this obligation?

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Role of Business in Society

Conventional view - as long as businesses act legally and

ethically, they need not concern themselves with larger
social goals.

Contemporary view - businesses have to be more conscious of

environmental and social sustainability, while acting
legally and ethically, and also try to avoid adverse impacts
on society and consumers.

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Profit or Social Goals - Conventional View

● A general increase in the wealth of a nation

results in a redistribution of overall wealth
● Businesses do not need to focus especially on
social goals / social responsibility
● Job creation is a very important social goal
● Businesses should avoid fraud, engage in open and
free competition
● Businesses should only do what they know best -
create products and services - value for customers
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Profit or Value

● Businesses make the world a better place to live in

● By creating things that customers value
● Businesses operate for profit, in a free market system.
● Have the right to earn profits on capital, own private
property
● For example - Bill Gates Microsoft and Foundation

Do businesses always create things that people value /

need?

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Profit or Value

Pharmaceutical companies - less investment in research on

diseases that affect developing world

Agriculture companies - more investment in research on pest

resistant varieties; not adequate funding for developing
drought resistant varieties
TED Talk

The social responsibility of business

By Alex Edmans

https://www.youtube.com/watch?v=Z5KZhm19EO0

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Other views

How businesses can fulfil a social role -

- Corporate social responsibility

- Philanthropy
- Active involvement in society (greater power should be
matched by greater social responsibility - recapture high
moral ground )
- Creating shared values
- Triple bottom line
Philanthropy

Reduced role of state

Ability to deliver good management

Partnership between private, public and civil society

organisations
Role of businesses (Indian Context)

● Businessmen have a great influence on the economy, on

employment, government policy, and politics
● India has high income inequality
● Extreme poverty
● Growing protests against businesses - related to land,
mining, minerals, displacement
● Large number of scams
● Difference between civil society and businesses is
growing

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Role of businesses (Indian Context)

Need for greater involvement

Business must drive sustainability

Increase interactions with stakeholders/communities

Poverty, climate, water, food, etc. - numerous challenges

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Nature of Indian Society
Significance of Caste
Processes of Change

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Indian Society

● We generally define societies on the basis of economy,

political system, culture, religion, population, family,
marriage, development parameters, etc.
● Distinct categories in India :
➔ Castes
➔ Tribes
➔ Peasants

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Caste
● Term originally used by Westerners
● Some scholars see India’s caste system as the defining
feature of ‘Indian culture’
● Native term - Jati
● There are over 3000 jatis in India

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Questions for discussion
● What is the functional aspect of caste in India?
● What is the idea of purity and pollution in caste? Or the
ritual aspect of caste?
● What is the position of women in the caste system?
● What is the nature of caste based oppression /
discrimination? Does it exist in today’s society?
● What are the factors responsible for change in the hold of
caste on Indian society?
● In what ways is caste important today?
● Can India become a casteless society in the future?
● What is the role of businesses in addressing caste
inequality? 21
Caste in India

Andre Beteille: Importance of caste in everyday lives has

reduced.

What was the importance of caste in everyday life in the

past? The functional aspect?

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Caste in Everyday Life

Occupational specialization

Varnas, hierarchy

Economic interdependence

Purity and pollution (commensality; untouchability)

Rules of marriage (endogamy)

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Caste system

● Caste system is a form of social stratification in which

castes are hierarchically organized and separated from
each other by rules of ritual purity. (Penguin’s
Dictionary of Sociology)
● Caste system is based on economic / occupational
specialization, but rooted in concept of ritual purity
● Interdependence among castes
● Surname reflects jati association and occupation - Teli
(oil presser); lohar (blacksmiths); sonar (goldsmith)

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Caste System -
Occupational Specialisation
● The four caste groups: the
Brahmins; the Kshatriyas;
the Vaishyas; the Shudra
● Lowest caste group - the
untouchables (performed only
the most degrading, ritually
impure/polluting tasks) -
manual scavengers,
washermen, sweepers,
fishermen, leather workers

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Business Communities in India

Marwaris

Jains

Aggarwals

Khatris

Parsis

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Occupational Specialisation and Interdependence of Castes
- Jajmani System
● Each caste has an occupational speciality, and offers
this to other castes in exchange for food, products, or
services.
● Foodgrains provided by the land-controlling dominant
caste or families (jajman / yajman) to the landless
servant, artisan, and lower castes (kamin).
● Exchange of food, goods and services is a ritual system
concerned with purity and population as well as an
economic system.
● It functions so that the highest castes remain pure while
the lower castes absorb pollution for them.
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Untouchability and Oppression of Lower Castes

- Social restrictions
- Separate hamlets
- Forbidden entry to many temples, schools
- Separate wells
- Nocturnal existence in some cases - untouchables
- Denied access to education
- Severe punishments for not adhering to social norms

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Lower Castes
● Subjugated lower castes, accept their subjugated
position, and they participate in the process. They
accept that they deserve to be there.
● That is why Indian caste system is perplexing.

(Races that are subjugated, do not accept their subjugation;

they see it as a political agenda)

● Under Article 341 of the Constitution the untouchable

castes were declared as scheduled castes.
● Over 500 scheduled castes in India (16.6 % of India’s
population)
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The areas where caste has become weaker

- Observance of rules of purity and pollution

- Observance of rituals
- Regulation of marriage - caste endogamy
- Occupational specialisation

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Forms of caste discrimination / untouchability today

● Dalits continue to suffer from the stigma of lower caste

due to their untouchable past
● Dalits remain social backward.
● Dalits continue to face exclusion, rejection and violence
in contemporary India.
● In rural India, despite the decline of the traditional
subsistence economy, caste continues to have a strong
presence
● New forms of untouchability

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The areas where caste has become stronger

- Caste Identity (horizontal solidarity among castes)

- Caste consciousness
- Caste in Politics - the idea of social justice
- Competition among castes
- Changing nature of dominant castes
- Conflict among castes
- Consolidation of lower castes

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Some ongoing conflicts

The Patels (or Patidars) Demand for BC status

Jat Reservation Protest

Kapu Reservation Demand

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Jat Reservation Agitation 2016

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Factors responsible for this change
● Individual Identity
● Industrialization, Urbanization, Westernization
● Modern Education
● Protection for SC (Constitution provide for some special
privileges to the Scheduled Castes to enable them to come up
to the level of other upper- castes)
● Laws (uniform legal system - equality to all; protection of
scheduled castes and other backward classes)
● Reform movements / non-Brahmin movements / backward class
movements
● Role of Media
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Special Provisions for lower castes

Affirmative action

Reservations in education and employment and political

representation
Reservation debate

Who deserves these constitutionally sanctioned privileges /

reservations today?

Do reservations compromise merit? Create a divide in

society?

Creamy layer

Who have benefited from reservations and development ?

Do we need reservations today?

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Forms of caste discrimination today

Has economic mobility been possible for the historically

disadvantaged castes?

Discrimination in urban labour markets

● Pre-market discrimination
● Job market discrimination (occupational and wage
discrimination)

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Discrimination in employment in rural areas

A 2013 study

● A primary survey conducted by the Indian Institute of Dalit

Studies
● Carried out among 1992 households in 80 villages across the
states of Maharashtra, Tamil Nadu, Haryana and Uttar Pradesh in
2013.
● A study of 441 farm wage labourers indicates that about 41 per
cent were denied work by the high castes due to caste prejudice

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Discrimination in employment in rural areas

● Of the total 389 non-farm wage worker, about 52 per cent

reported denial of work due to caste background.
● The caste restrictions are mostly in domestic work such -
● cooking at high caste homes
● serving food in restaurants
● work in construction of temples
● Work in cultural and religious ceremonies
● Rural private sector - 22 percent respondents reported that high
caste employers gave preference to persons of their own caste in
employment

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Discrimination in urban labor markets

● SCs largely are a part of the unorganised sector.

● 32 % of casual labourers in the country are SCs
● Discrimination in assignment to jobs
● Unemployment rates much higher for SCs
● Latent support for caste ideology in urban areas
● Thorat and Attewell, 2010: Existence of discriminatory processes
that operate at the very first stage in the job application
process

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Unemployment rates

https://www.hindustantimes.com/india-news/sche
duled-castes-among-worst-sufferers-of-india-s-job
-problem/story-Qh0hyHy9UUTg1cIOpi5l2K.html#:
~:text=According%20to%20the%202011%2D12,a
nd%2046%25%20for%20the%20rest.
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Caste and Entrepreneurship in India

Lakshmi Iyer, Tarun Khanna, Ashutosh Varshney (2013)

● OBCs / SCs / STs - politically stronger; representation in state

assemblies and Parliament
● Has this political revolution been accompanied by corresponding
changes in the economic sphere?
● SCs / STs - underrepresented in ownership of enterprises
● OBCs - greater representation in South India
● Numerous factors responsible for low representation (network,
finance, skill, land ownership, discrimination)

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How do we address this issue?

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How do we address this problem?

To reduce discrimination in jobs

- Reservations
- Reducing differences in access and quality of education
between dalits and upper castes
- Reduce favoritism
- Reduce economic exploitation

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Readings

- Caste and Entrepreneurship in India - 2013

- The Eternal Debate - 2006

- Scheduled Castes among worst sufferers of India’s job problem - Sukhdeo

Thorat
(https://www.hindustantimes.com/india-news/scheduled-castes-among-worst-suffer
ers-of-india-s-job-problem/story-Qh0hyHy9UUTg1cIOpi5l2K.html)

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Lecture 5 Group Presentations on -

● A social issue / problem

Evaluation ● A policy
● A social enterprise
1. Mid term exam 35% ● Impact of business on society
2. End term exam 40% 20 marks - content, analysis,
3. Group Presentation 25% conclusion, time limit (15 minutes)

5 marks - engaging in Q and A

(specific groups will be assigned)

Finalize topics by 15 February and

send an email (malanarang@gmail.com)

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Role of Businesses
Caste and Business

● Income and social inequality is not good for the growth and
development of any society, and eventually impacts business
enterprises.
● Business enterprises should respect human rights
● Business operations in India are based on the economic
exploitation or seclusion of subjugated communities / lower
castes.
● Hiring, Favouritism and Social Exclusion
● The model of global supply chains is based on low wages,
insecure and often unsafe work

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Caste and Business
● Due to a lack of knowledge of the realities of caste, even
progressive, responsible businesses may undermine their own
efforts to protect the rights of workers
● Businesses need to proactively counter caste-based
discrimination, respect fundamental human rights, and
advance access to decent work for all
● Need to reduce favoritism and enhance universalistic hiring
- Reliance on exams or tests, formalised collective
decision-making, etc.
● Inclusive growth
● Diversity in the workforce at all levels serves the purpose
of social justice and also increases productivity.
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Role of Business

Disadvantaged groups : migrants, women, children, persons

with disabilities, ethnic and religious minorities, and
indigenous peoples

Follow international standards - Adhere to the International

Labour Organisation and the UN Guiding Principles on
Business & Human Rights