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Chapter 8 SOCIETAL ENVIRONMENT BUSINESS ENVIRONMENT PART 2 : BUSINESS AND SOCIETY

Business and Society As 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’’1 As Calkins remarks: ‘’It is now recognised that the direction of business is important to the public welfare, that businessmen perform a social function.”2 Davis and Blomstorm point out that, in taking an ecological view of business in a systems relationship with society, three ideas are significant in addition to the systems idea. The three ideas are values, viability and public visibility.5

Business Ethics The term business ethics refers to the system of moral principles and rules of conduct applied to business. In the 1930s, Rotary International developed its Code of Ethics that is still used extensively. It uses four questions that are called the four way ethical behaviour for any ethical issue a business faces. Is it the truth? Is it fair to all concerned? Will it build goodwill and better friendship? Will it be beneficial to all concerned?

Business and Culture Culture consists of both material culture and non-material culture. Material culture involves man-made things ( e.g., automobile, television, telephone, etc.) and man-made alternations in the environment. Non-material culture includes such factors as language, ideals, beliefs, values, music, etc.

Elements of Culture Knowledge and Beliefs Ideals Preferences

Organisation of Culture The term organisation of culture refers to the social structure and the integration of traits, complexes and patterns that make up the cultural system.

Cultural Adaptation The term cultural adaptation refers to the manner in which a social system or an individual fits into the physical or social environment. The social system may be a small group, such as the family or a larger collectivity, such as an organisation, or even a total society, like a tribal society.

Cultural Shock Environmental changes sometimes produce culture shock – a feeling of confusion, insecurity, and anxiety caused by the strangeness of the new environment.

Cultural Transmission A very important character of culture is its transmissive quality. The elements of culture are transmitted among the members of the culture, from one generation to the next, and to the new members admitted into the culture. Some of the aspects of a culture may be transmitted to other cultures also.

Cultural Conformity Individuals in a culture tend either to conform to the cultural norms or to deviate from them. If the culture endures as it is, most people would conform to the norms.

Cultural Lag various parts of modern culture do not change at the same rate. For example, in some cultures social inertia and religious sentiments come in the way of population control, though a variety of techniques are available for birth control.

Cultural Traits Low-Context and High-Context Cultures Masculine and Feminine Cultures Monochronic and Polychronic Societies Universalism vs. Particularism Individualism vs. Communitarianism Neutral vs. Emotional Specific vs. Diffuse Achievement Vs. Ascription

Religion Different peoples have their own religious convictions, beliefs, sentiments, customs, rituals, festivals etc. The cost of ignoring certain religious aspects could be very high, sometimes even fatal, in business.

Ethnodomination In many countries one or other industry or trade is dominated by certain ethnic groups. This is particularly true of trade. There are a number of cases of ethnodomination in India. For example, the automobile spare parts business is dominated by the Sikhs. There is domination of some communities in the wholesale trade in several products. In several parts of the country, there is dominance of some or other community in banking and money lending like the Chettiars in Tamil Nadu and Vysyas in Karnataka and other places.

Language Differences in the language is a very important problem area in business. India has numerous languages and their dialects, besides the 18 officially recognised languages. Of the 1652 mother tongues listed by the Census of India, 33 are spoken by people numbering a lakh or more.

Other Social/Cultural Factors Consumer Preferences, Habits and Beliefs Etiquettes

Technological Developments and Social Change Technology is one of the important determinants of social change. “The rapid changes in our society are obviously related to, and somehow dependent upon, the development of new techniques, new inventions, new modes of production, new standards of living.”

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Ch 8 soc. envt.

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