SOCIETAL ENVIRONMENT

BUSINESS AND SOCIETY:

Changing concept and objectives of business:
Davis and Blomstorm observe, business is social institution,
performing a social mission and having a broad influence on
the way people live and work together
In taking an ecological view of business in a systems
relationship with society, three ideas that significantly
emerge are:
1. Values: business like other social institutions, develops
certain belief systems & values for which they stand, &
these beliefs are a source of institutional drive.
2. Viability: drive to live & grow, to accomplish the potential
not yet reached, & to achieve all that a living system is
capable of becoming.
3. Public Visibility: refers to the extent that an organizations
activities are known to persons outside the organization.

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PROFESSIONALISATION:
Here, Peter Drucker observes:
Management is independent of ownership,
rank or power.
It is objective function and ought to be
grounded in the responsibility for performance.
Professional management is a task to be
done.
The welfare of his client sets limits to his
deeds and words.
Professionalization makes business more
efficient, dynamic and socially responsible.

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BUSINESS ETHICS:
Ethics refers to the system of moral principles and
rules of conduct applied.
Business, being a social organ, should be
conducted according to certain universal moral
standards.
In the 1930s, Rotary international developed its
following code of ethics that is still used
extensively.
1. Is it the truth?
2. Is it fair to all concerned?
3. Will it build goodwill and better friendship?
4. Will it be beneficial to all concerned?

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Role of trade association:
Trade associations which are voluntary organizations of
businessmen can promote business ethics in three
important ways:
1. Education and Persuasion: Trade associations can
promote business ethics by educating the members
about the business ethics & persuading them to
give due regard to ethical principles.
2. Code of ethics: Trade Association can formulate a
code of conduct & which should also contain the
code of ethics. The code of conduct will guide &
regulate the conduct of business.
3. Moral Sanctions: sanction refers to the ways in
which moral conduct is rewarded or misconduct is
punished. Such incentives & punishment should be

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BUSINESS AND CULTURE:
Culture refers to that part of the total repertoire of
human action which is socially transmitted.
Culture consists of both material culture and nonmaterial culture.
Material culture involves man-made things, and
man-made alterations in the environment.
Non material culture includes such factors as
language, ideals, beliefs, values, music etc.
Elements of Culture:
Knowledge and beliefs: the knowledge & beliefs
refer to a peoples prevailing notions of reality.
They include myths & metaphysical beliefs.

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Ideals: ideals refer to the societal norms
which define what is expected, right or
proper in a given situation. Norms are
enforced by sanctions, i.e., by rewarding
the right behavior & punishing the wrong
behavior.

Preferences:
preferences refer to
societys defination of those things in life
which are attractive or unattractive.
Preferences may differ between cultures.

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Culture Shock: Environmental changes
sometimes produce culture shock- a feeling
of confusion, insecurity & anxiety caused by
the strangeness of the new environment.
Example: if a youngster, born & brought up
in a large city; is posted to a bank office in a
remote village, he may experience a culture
shock. Similarly a villager may experience a
culture shock when he takes up a job in a
large modern company.