GROUP-8

ANIRUDHA-5052

The term Business Environment is composed of two words Business and Environment . In simple terms, the state in which a person remains busy is known as Business. The word Business in its economic sense means human activities like production, extraction or purchase or sales of goods that are performed for earning profits. On the other hand, the word Environment refers to the aspects of surroundings.

Therefore, Business Environment may be defined as a set of conditions Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization.

Internal Environment: It includes 5 M s usually within the control of business. 1. Man 2. Material 3. Money 4. machinery and 5. Management Business can make changes in these factors according to the change in the functioning of enterprise.
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External Environment: Those factors which are beyond the control of business enterprise are included in external environment. These factors are: Government and Legal factors, GeoPhysical Factors, Political Factors, Socio-Cultural Factors, Demo-Graphical factors etc. It is of two Types: 1. Micro/Operating Environment 2. Macro/General Environment

Micro/Operating Environment:
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The environment which is close to business and affects its capacity to work is known as Micro or Operating Environment. It consists of.... Suppliers Customers Market Intermediaries Competitors Public.

1. 2. 3. 4. 5.

Macro/General Environment: The factors that create opportunities and threats to business units is known as macro environment. Following are the elements of Macro Environment: Economic Environment Non Economic Environment Political Environment Technological Environment Socio-cultural Environment Demographic Environment International Environment

1. 2. A. B. C. D. E.

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Business environment is compound in nature. Business environment is constantly changing process. Business environment is different for different business units. It has both long term and short term impact. Unlimited influence of external environment factors. It is very uncertain. Inter-related components. It includes both internal and external environment.

The totality of socially transmitted behaviour patterns, arts, beliefs, institutions, and all other products of human work and thought.

LANGUAGE SOCIAL COLLECTIVES RELIGION

VALUES

SATUSES AND ROLES

NORMS
RITUALS

CULTURAL INTEGRATION

Language: The various languages are essentially an important part of the culture. Norms: Every society or every civilization has a set of norms, which are an inseparable part, and an important element of the culture. This can include the folkways, mores, taboos and rituals in a culture.

Values: The social values of a particular civilization are also considered as an element of the culture. The values of a culture often refer to the things to be achieved or the things, which are considered of great worth or value in a particular culture. Religion and Beliefs: The religion and the beliefs of the people in a civilization play an important role in shaping up of the culture as well. Read information about world religions.

Social Collectives: Social collectives refer to the social groups, organizations, communities, institutions, classes, and societies, which are considered as symbolic social constructions. Statuses and Roles: A status or a social role is nothing but a slot or position within a group or society, which gives an overall idea of the social structure and hence is an important element of culture. This can also include traditional gender-based or age-based roles.

Cultural Integration: This includes the degree of harmony or integration within the various elements of culture. This can include elements like sub-cultures, local cultures and the difference between historical and cultural traditions. Rituals: Rituals are processes or sets of actions which are repeated in specific circumstances and with specific meaning.

As with other aspects of the environment, the relationship between business, culture involves a two-way interaction. Although we tend to think of business as operating according to a distinctive instrumental rationality of pro tand-loss and the bottom line it is also in uenced by the social-cultural setting in which it is embedded. At the same time business affects the wider culture and society profoundly.

For example, a good deal of what we think of as making up the culture of modern society consists of the outputs of private sector businesses in what might be called the culture industries, such as popular music, lms, literature, newspapers and magazines. These in uences can be seen as either positive or negative. For example, aspects of the culture of a society might be seen as hindering or assisting business performance.

Therefore governments might be interested in promoting cultural change as a way of boosting economic competitiveness. On the other hand business might be seen as having harmful or bene cial effects on the wider society or culture, and governments might want to in uence or regulate business behaviour for this reason.

PRAVIN KUMAR-

27

India is a culturally rich and diverse country where one can see varied array of language, religion, caste and regionalism. While doing business in India, every organization has to consider all these factors before formulating their business plans and take necessary actions accordingly.

The India Business Culture is an extension of the common culture of the society. It is unique in its own way. However, in Indian business culture, the behaviour, etiquette and approach of organizations and its professionals change according to the addressee and the context of address.

LANGUAGE MEETING ROOM GREETINGS

MEETING

RELATIONSHIP

TIME
DECISION

BUSINESS ATTIRE

India is a multilingual country with each of its states having different official languages. However, Hindi is the only officially recognized language in the country. While talking on India business culture, English is the most preferred language, which is followed religiously in every industry.

In India, people greet each other by saying 'Namaste', while conjoining the palms together below the chin and nodding the head. One can also do this while saying good-bye. Use of the namaste will show that you have understandings of Indian culture. While greeting superiors or showing respect to someone, a slight bow is added.

In Indian business culture, people also greet each other by a handshake. In a one-to-one meeting with a male counterpart, a woman usually initiates a handshake. While greeting an individual, people use appropriate formal title. While meeting a person or client for business purpose, always exchange business cards at the first meeting. You must exchange the cards with your right hand only. Cards must be put away with due respect.

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In India business culture, business development largely depends upon relationship building. Indians tend to give favorable deal to those whom they know and trust. Hence, a good way to earn business is to earn the trust of the customers first. You can earn the trust of people by demonstrating strong business insight, showing honesty and respect.

Any business meeting has to be arranged well in advance. These have to be fixed in writing and confirmed by phone. It is better to avoid fixing meetings on or near national holidays like Independence Day, Republic Day, Gandhi Birthday or either of the two Eids. People often club their leaves to enjoy extended holidays during this time.

Indians value punctuality in others, but they often lag behind the schedule themselves. A 10-minute late is acceptable in most of the cases. It can also be seen that family responsibilities getting preferences over business, which leads to last minute cancellation of meetings, though not quite often.

After entering into the meeting room, one must approach and greet the senior-most figure first. Every meeting usually has some 'getting to know you' process, where the meeting starts with some initial conversation. The favorite topics are business news, how stock market is doing, or the game of cricket.

It is good to avoid discussing personal matters. If you are new to India, it is always better to refrain from commenting on volatile issues like poverty or beggars.

Statistics, data or PowerPoint presentation cannot solely influence the business decision. Indians tend to reckon the intuitions, feelings and faiths before they reach at any decision. You must show your patience and good character before any final verdict comes out. You cannot afford to show frustration or anger.

Business culture in India demands formal attire. Men usually wear formal shirts and pants. Suits or Blazers are also quite worn, often during the winter. Women wear saris or suits. On the last working day of the week, people often wear casuals. However, that has to be a decent one.

PRATHAMESH-5008

Geert Hofstede is an influential Dutch organizational sociologist. He studied the interactions between national culture and organizational culture. He is the author of books which include Culture's Consequences Cultures and Organizations

POWER DISTANCE INDEX

INDIVIDUALISM

MASCULINITY

LONG TERM ORIENTATION

UNCERTAINITY AVOIDANCE INDEX

This refers to the degree of inequality that exists and is accepted among people with and without power. A high PDI score indicates that society accepts an unequal distribution of power and people understand "their place" in the system. Low PDI means that power is shared and well dispersed. It also means that society members view themselves as equals.

In a high PDI country you would probably send reports only to top management and have closed door meetings where only a select few, powerful leaders were in attendance. Lowest PDI is 11 in Austria and Highest PDI is 104 in Malaysia

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CHARACTERISTICS
y

TIPS
y

Centralized companies Strong hierarchies

Acknowledge a leader's power Be aware that you may need to go to the top for answers Use teamwork Involve as many people as possible in decision making.

High PDI
y

Large gaps in compensation, authority, and respect. Flatter organizations Supervisors and employees are considered almost as equals.
y

Low PDI

This refers to the strength of the ties people have with others within the community. A high IDV score indicates a loose connection with people. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after themselves and their own family.

In countries with a high IDV score there is a lack of interpersonal connection and little sharing of responsibility, beyond family and perhaps a few close friends. A society with a low IDV score would have strong group cohesion, and there would be a large amount of loyalty and respect for members of the group. Highest IDV is 91 in US Lowest IDV is 6 in Guatemala

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CHARACTERISTICS
y

TIPS
y y

High valuation on people's time and their need for freedom An enjoyment of challenges, and an expectation of rewards for hard work Respect for privacy

Acknowledge accomplishments Don't ask for too much personal information Encourage debate and expression of own ideas

High IDV

Emphasis on building skills and becoming masters of something Work for intrinsic rewards Harmony more important than honesty

y y

Show respect for age and wisdom Suppress feelings and emotions to work in harmony Respect traditions and introduce change slowly

Low IDV

y y

This refers to how much a society sticks with, and values, traditional male and female roles. High MAS scores are found in countries where men are expected to be tough, to be the provider, to be assertive and to be strong. If women work outside the home, they have separate professions from men.

Low MAS scores do not reverse the gender roles. You see women and men working together equally across many professions. Men are allowed to be sensitive and women can work hard for professional success.

In a MAS workplace, there is a high level of male dominance and less gender equality. In a low MAS workplace, there is greater equality between males and females. Highest MAS is 95 in Japan Lowest MAS is 5 in Sweden

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CHARACTERISTICS TIPS
y

There is a well defined distinction between men's work and women's work.

Be aware that people may expect male and female roles to be distinct. Advise men to avoid discussing emotions or making emotionally-based decisions or arguments.

High MAS

A woman can do anything a man can do. Powerful and successful women are admired and respected.

Avoid an "old boys' club" mentality. Ensure job design and practices are not discriminatory to either gender. Treat men and women equally.

Low MAS

It refers to the culture's tolerance for ambiguity, unstructured situations & unplanned events.

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Highest UAI is 112 in Greece Lowest UAI is 8 in Singapore

People with high UAI work well within a structured environment, under strict laws, rules and guidelines. In a high UAI workplace, employees perform at their best with clear directives and follow standards & procedures. High UAI-scoring nations try to avoid ambiguous situations whenever possible. They are governed by rules and order and they seek a collective "truth".

People with low UAI can tolerate uncertainty and welcome freedom of opinions, try to have as few rules as possible. In a low UAI workplace, employees tend to "go with the flow," are more flexible and do not require instructions and rules to perform well. Low UAI scores indicate the society enjoys novel events and values differences. There are very few rules and people are encouraged to discover their own truth.

CHARACTERISTICS TIPS
y

High UAI
y

Very formal business conduct with lots of rules and policies. Differences are avoided.

Be clear and concise about your expectations and parameters. Express your emotions through hands gestures and raised voices. Do not impose rules or structure unnecessarily. Express curiosity when you discover differences.

Informal business attitude. More concern with long term strategy than what is happening on a daily basis. Accepting of change and risk.

Low UAI

LTO refers to the degree to which the society upholds traditional values. Hofstede created a Chinese value survey which was distributed across 23 countries In a nation with low LTO you can pretty much expect anything in the culture in terms of creative expression and novel ideas.

In a low LTO workplace, a society change can occur faster since long term traditions do not impede them. In a high LTO workplace, the society is entrenched in traditions, which often means that long term commitments and hard work as a plan for future rewards outweigh the need for rapid change. Highest LTO is 118 in China Lowest LTO is 16 in Nigeria

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Long term orientation ` persistence ` ordering relationships by status ` thrift ` having a sense of shame Short term orientation ` personal steadiness and stability ` protecting your face ` respect or tradition ` reciprocation of greetings, favors, and gifts

CHARACTERISTICS
y

TIPS
y

Family is the basis of society. Strong work ethic. High value placed on education and training.

Show respect for traditions. Reward perseverance, loyalty, and commitment.

High LTO
y

Promotion of equality. High creativity, individualism. Self-actualization is sought.

Be respectful of others. Do not hesitate to introduce necessary changes.

Low LTO

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INDIA- 77 World Average- 56.5 Higher inequality of wealth & power India is developing Caste system Accepted by the people

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INDIA- 56 World Average- 51 Higher gap. Generates more competitive and assertive females.

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INDIA- 40 World Average- 65 More open to unstructured ideas and situations. Fewer rules and regulations . Accepting of change and risk.

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INDIA- 61 World Average- 48 Culture is perseverant

KIRAN-

11

There are many things like culture, economy, politics, etc. that impact the working of international businesses in today's world. When the two aspects of human society, culture and business, interact with each other, it leads to the development of interesting conditions or scenarios. different cultures converge at a common point with business as the platform, the clashes are bound to take place.

Most importantly, such a scenario helps us adapt to challenging situations. Different communities or countries in the world follow different mannerisms and etiquette. The way or view to see a problem might change from country to country, across the globe. The international business culture as a whole, is a congregation of various business practices, cultural influences and the thought processes followed in different nations.

With today's businesses entering a 'globalized' world, the interaction between different cultures is bound to happen. Merely learning different languages, won't be enough. It is necessary for corporate houses to understand the social conditions of different countries, to successfully tap the respective markets. Being sensitive to the values and beliefs of different cultures of the world, is necessary.

International businesses are not only a way of making profits by the exploitation of international talent, but also a bridge between different nations of the world. Tomorrow's world will rely more on a symbiotic relationship between international businesses and cultures as a whole.

Every nation has a separate culture; a part of which is reflected in the behaviour and the body language of the people. In an international business, understanding the undercurrents beneath the mannerisms or gestures become necessary. There are chances that behaviour might get misinterpreted by people from different cultures. Thus, it requires a skilled coordinator to handle challenging situations during meetings.

The way of communicating could be different in different cultures. The terms used by some might sound harsh to others. The way in which words are pronounced to impact the intercultural communication in the corporate houses. In fact, it is one of the major hindrance in the process of business communication.

People from Britain and Germany are keen on following the time-bound schedules.

The different 'time-cultures' might be the reason behind

clashes, between people from diverse cultures. The way in which the boardroom meetings are handled, is also a reason behind differences in opinions. Corporate houses from western countries stick to the schedules during meetings. They get down to business in an outright manner. Other cultures may differ in this aspect of business.

The culture a person is born into goes a long way toward determining that individual's behaviour patterns, beliefs and values. Marketers, analysts and consumers themselves use an awareness of culture to learn how and why consumers in a particular culture behave the way they do.

Culture is an important factor in determining consumer behaviour. It explains why some products sell well in certain regions or among specific groups, but not as well elsewhere. Besides purchasing decisions, culture also affects how consumers use the products they buy and how they dispose of them.

Product use helps marketers position their products differently in each market, while the culture's effects on product disposal can lead governments to adopt more effective recycling and waste reduction strategies. Consumers can examine how members of other cultures use the same products, or fulfil the same needs with different products, as a way to find more efficient, cost-effective options in the marketplace.

Traditions are central to the ways that culture influences consumer behaviour. Other countries have traditions that put special demands on the suppliers and retailers that serve those markets. Traditional patterns change over time as a culture evolves, but marketers who study and understand such patterns have an advantage.

For example, in mainstream American culture, turkey is a traditional food for Thanksgiving. This culturally specific behaviour allows companies that produce poultry, along with the retailers who sell it, to prepare for increases in demand near the Thanksgiving holiday, but only in the United States.

Culture exerts different levels of influence on members. Age, language, ethnicity, gender and education level all affect which consumer behaviours a member of a given culture demonstrates. Young people may not adopt cultural practices that are common for adults, and may develop practices unique to their own subculture.

This can involve everything from new buying trends to new product use trends. As people relocate and cultures come together in new ways, the intensity of culturally determined consumer behaviour changes even more.

Marketers spend a great deal of time and money studying the effects of culture on consumer behaviour. This is especially true for multinational companies that have customers from a diverse series of cultural backgrounds. A strong marketing strategy in one culture might be unappealing, or even offensive, to members of another culture. Marketers cater to specific cultural behaviours by offering different versions of the same product that are tailored to appeal to the target audience.

Cross-cultural marketing is defined as the effort to determine to what extent the consumers of two or more nations are similar or different. This will facilitate marketers to understand the psychological, social and cultural aspects of foreign consumers they wish to target, so as to design effective marketing strategies for each of the specific national markets involved.

KETAN-

International marketing.

The Terpstra and Sarathy Cultural Framework.

Eight categories in analysis

LANGUAGE SOCIAL ORGANIZATION

EDUCATION

RELIGION

LAW
AESTHETICS

TECHNOLOGY