The Changing Socio- Cultural Environment

In India and Its effects on Business

By:
Rajat Singla (21)
Rajesh Punia (22)
Ramneek Singh (23)
Ruchika Singh (24)
 Contents of the Presentation
 Socio-Cultural Environment
 Critical Elements of Socio-Cultural Environment of
Business
 Impact of Foreign Culture on Business
 Hofstede Index
 Family Life Cycle
 A Case Study on Maggi
 Changing trends in India due to Socio Cultural changes
& other Contemporary Issues
 Changing Trends in Society
Now, what exactly is Socio-Cultural
Environment
 Sociocultural Environment
 That part of the firm's external marketing environment in
which social or cultural changes (that is, changes to the
value system of a society) act to affect the firm's marketing
effort.
 The changing sociocultural environment may pose threats or
present opportunities for the business.

Socio -
Cultural

Society Culture
 SOCIETY
o Society or human society is the set of relations
among people, including their social status and roles.
o A society is a body of individuals outlined by the
bounds of functional interdependence, possibly
comprising characteristics such
as national or cultural identity, social
solidarity, language or hierarchical organization.
 CULTURE
 According to Hofstede, “ Culture is the software of the mind- the
social programming that runs the way we think, act and perceive
ourselves and others.”
 Culture is defined as a complex whole which consists of customs,
attitudes, beliefs and values of a society. The set of shared
attitudes, values, goals, and practices that characterizes an
institution, organization or group.
 It is the total way of life of people.
 Some concepts related to Culture
 Elements
 Knowledge and beliefs (Science, myth, metaphysics)
 Ideals (Right / Wrong)
 Preferences (Attractive/ Unattractive)
 Cultural Heritage
Cultural heritage is the legacy of physical artefacts and intangible
attributes of a group or society that are inherited from past
generations, maintained in the present and bestowed for the benefit of
future generations
 Cultural Adaptation

Culture is learned by each person in the course of his development in

the society.
 • Cultural Conformity:
It means following the culture blindly, doing what are
predessors have been doing without even knowing the
reason for it.

 Example
 Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and
place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb
towards the banana. As soon as he touches the stairs, all of the other monkeys are sprayed
with cold water.
 After a while, another monkey makes an attempt with the same result - all the other monkeys
are sprayed with cold water. Pretty soon, when another monkey tries to climb the stairs, the
other monkeys will try to prevent it.
 Now, put away the cold water. Remove one monkey from the cage and replace it with a new
one. The new monkey sees the banana and wants to climb the stairs. To his surprise and
horror, all of the other monkeys attack him. After another attempt and attack, he knows that if
he tries to climb the stairs, he will be assaulted.
 Next, remove another of the original five monkeys and replace it with a new one. The
newcomer goes to the stairs and is attacked. The previous newcomer takes part in the
punishment with enthusiasm!
 Likewise, replace a third original monkey with a new one, then a fourth, then the fifth. Every
time the newest monkey takes to the stairs, he is attacked. Most of the monkeys that are
beating him have no idea why they were not permitted to climb the stairs or why they are
participating in the beating of the newest monkey.
 After replacing all the original monkeys, none of the remaining monkeys has ever been sprayed
with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the
banana. Why not? Because as far as they know that‟s the way it‟s always been done around
here.
Origins of this story unknown
 Critical Elements of Socio-Cultural
Environment of Business

Social Institutions & • Caste System, Joint Family System, Patriarchal

Systems Family, Marriage, Religion

Social Values & • Customs & Superstitions, Traditions, Conventions,

Movers Manners, Attitudes

• Attitude towards Education, Business Morality &

Education & Culture Organisational Culture

Social Responsibility • Business Ethics, Social Welfare

• Urbanisation, Education, Cross Cultural Issues,

Others
Language, Cultural Shock
 Castes and Communities
 As we all know, Indian society, particularly the Hindu society, was
divided into four categories on the basis of caste.
 Economic pressures, spread of education, and other developments
have been breaking down slowly class distinctions and social
barriers.Industrialization has created new social and political
functions and new occupations.
 Vaishyas, Brahmins, and other ‘castes’ are no longer confined to
their original roles.
 Workforce Diversity
 When people from different cultures converge in a workplace,
Management will be required to manage diversity.
 Workforce diversity has important implications for
Management practices.
 Managers will be required to shift their philosophy from
treating everyone alike to recognising differences and
responding to those differences in manners that will ensure
employee retention and productivity.
 Family System
 Earlier, Joint Family System was prevalent.
 Now, Nuclear family is being preferred.
The joint family is being split into smaller units of nuclear
family.
Now, the impacts for Marketers:
 Increasing demand for Flats, Vehicles, Consumer Goods.
 Increasing demand for catering services (packed lunches),
baby sitters, creches.
 Religion and Religious Groups
 Religious beliefs, convictions, customs, rituals and festivals
differ from one group to another.
 Business firms can suffer heavy losses by ignoring religious
sentiments of customers, employees and others.
 Religious groups exert considerable influence on activities of
business groups.
 Thus, business must recognize and respect religious sentiments.
 Example, negative demand for beef products in India.
 Customs & Superstitions
 Many important business decisions in India are taken on
the advise of astrologers. (Location of business, time of
launch, name of enterprise, brand name etc.)
 Example, Business firms do brisk business on festivals such
as Deepavali, Christmas, Id, Guru Purab etc.
 No purchase of Iron & Steel goods by people on Saturday
as it is considered inauspicious.
 Superstitions (Contd.)
 Barber Shops & Chicken Shops don’t open on Tuesday due to
religious reasons. (Lord Hanuman’s Day)
 In most countries Sunday is a weekly holiday, but in Islamic countries
Friday is treated as a weekly holiday.
 Even acceptable colors depend on the culture sometimes.
 SINGH IS KINNG
The extra “N” in the word King in the title of movie
“Singh is Kinng” was due to astrological &
numerological reasons.

 BALAJI TELEFILMS
Balaji Telefilms names all its serials starting with the letter „K‟.
For e.g. Kyunki Saas Bhi Kabhi Bahu Thi, Kasauti Zindagi Kay etc
both which were superhit serials and a common topic of
discussion among the households.
 Kellogg‟s Failure in India
Reasons for Failure:
• The fact that the taste of its products did not suit Indian breakfast habits.
• The second mistake it made in the Indian market was its positioning front. Its
advertisements and promotions focused initially on the health aspects of the product which
was a fundamental departure from the successful ‘fun and taste’ positioning adopted in the
United States.
• High prices: At an average cost of Rs.21 per 100gm,Kellogg products were clearly priced way
above the product of its main competitor , Mohun Cornflakes (Rs16.50 for 100gm).Another
small-time brand, Champion was selling at prices almost half that of Kellogg’s. This gave
Kellogg a premium image and unattainable for the average Indian consumer.
 KFC‟s Failure in India
Reasons for Failure:
• KFC was banned in India in 1997 due to launching of Beef’s products in India.
• Beef products in India are totally unacceptable by the people of India as Cow is a
Holy Animal in Hindu Culture and it is worshipped.
• So, it hurt the religious sentiments of all the Hindu people in India and was
subsequently banned by the Government.
 Nimbu Pani To Nimbooz
• The PepsiCo identified the popularity of Nimbu Pani
among both Rural & Urban India so they launched
“Nimbooz” based on the traditional flavour of Nimbu
Pani which was readily accepted by the people.
 Marriage
 Marriage is one of the basic elements of culture and
people‟s attitude towards marriage influences culture a
lot.
 Marriage is a social event that concerns the whole
society.
 In India, marriages are a family affair. The marriage
season is a big opportunity for business.
 For e.g. Jewellery, Kitchen ware, Honeymoon Package,
Household Furniture, Vehicles etc have huge demand
during the marriage season.
 Attitudes
 Attitudes include things such as individual freedom, democracy, truth
and honesty, justice love and marriage to name a few.
 Attitude towards work is important as it determines motivation,
morale, job satisfaction, productivity etc.
 All sorts of attitudes exist, but the positive aspect of Indian attitude is
that generally, no worker or employee touches his/her tools of work,
without closing his/her eyes for a few minutes and thanking the
almighty for having bestowed his blessings in the form of work.
 Sincerity, hard work, loyalty and honesty are other aspects of the
Indian work culture.
 Language
 India is multi linguistic. (18 officially recognized languages and the census of
India identifies 1652 more.)
 Marketing plans become costlier and more complex due to this huge
diversity. The advertising campaigns have to been launched in National as
well as local languages.
 Pepsi‟s „come alive‟ slogan was considered offensive in some places as to the
locals it meant „come out of the grave‟.
 Parker Pen Company faced similar problems as in some countries „Ball Pen‟
meant „lie‟, „Obscenity‟, „fabrication‟, „revolution‟ etc.
 Reebok had to discontinue its „INCUBUS‟ brand as in medieval folklore,
Incubus was a devil who terrorized women.
 Ford Motor‟s truck named Fiera meant “Ugly old women” in Spanish.
 Segmentation can be done on the basis of linguistic groups.
 Cultural Shock
• A move from one country to another may create certain amount of confusion,
disorientation and emotional upheavel.
• This is called Cultural Shock.
• Organizations, particularly MNCs must be prepared to cope with the cultural
shock.
 Ethics
o Ethics in business deals with the ethical path business
firms ought to adopt.
o Jacques Cory, a noted business ethicist observes,
“companies should behave ethically and be profitable in
parallel, and even if ethics diminishes the profitability of
the company, they should still behave ethically”.
o Google Halts Censorship on Chinese Search
o Google announces a “new approach to China,” indicating
that China‟s behavior toward human rights activists and
other efforts “to further limit free speech on the web in
China” had led Google to stop censoring its search
services on the Google.cn site and instead redirect traffic
to its Hong Kong-based servers.
 Education
 Countries rich in educational facilities vastly attract high wage
industries.
 By investing in education, a country can attract “Brain-Power”
Industries.
 Market Potential of a country depends on education.
 The level of literacy determines the nature of advertising,
packaging, quality of marketing research and distribution
system.
Barack Obama has said in a recent address to the US Senate
that, “India is playing for the number one position. If they
keep producing more engineers, doctors and scientists than
us, we will not be number one for long.”
Kiryana Ki Dukan to Swanky Malls
 Earlier people used to go to Neighbourhood Kiryana
Shops, but now due to changing culture of working
people, these shops have given way to Swanky Malls like
Big Bazaar, Pantaloons, Trent, Westlife etc.
 The people have become more brand conscious.
Nowadays, people prefer more branded products over
the local products even if they are more expensive.
 From Scooter to Nano
 Nano - People's car
 The Dream of people to own a Car turned into true by Ratan Tata when he
launched Nano. The idea was based on the personal experience of Ratan
Tata when he saw two-wheelers - with the father driving, the elder child
standing in front and the wife behind holding a baby.
 The price of Rs. 1,00,000 was fixed keeping in mind the low budget of an
average Indian family and subsequently, it was the World‟s cheapest car.
 This triggered the revolution in the small car market.
 Studying in Same City to Studying
Abroad
 Earlier, people only sent their children to the same cities to study.
 But now their has been recent trend to send the children abroad to study.
For e.g. sending the children to Australia has become a trend.
 This has resulted in opening of Immigration & Consultancies agencies which
guarantee “Instant Visa” to the applicant.
 The trend of sending children abroad is so much popular that in the region
of Hoshiarpur and around in the Punjab state, almost all of the boys in the
families in this region have gone abroad to study.
 No Health Awareness to Health
Conscious People
 Now, people are more conscious about the calories in a particular product
and always check the nutritional values before purchasing any product.
 The business has responded to this situation by launching more health
conscious products.
 For e.g. Cold drinks like Pepsi and Coca Cola etc have given way to more
healthier drinks like fresh fruit juice like Real And Tropicana etc.
 Awareness regarding fitness in the people has made aerobics, going to gym
and weight loss programs a craze among Indians.
 For e.g. VLCC has been doing a brisk business.
 Bharatmatrimony.com
 A new trend of marriages being made online has emerged in India.
 People prefer to explore all the possible sources for marriage so they are
actively considering the online marriage sites.
 A host of match making sites have opened like bharatmatrimony.com,
shaadi.com, jeevansaathi.com etc.
 So, much so, that bharatmatrimony.com has special dedicated websites for
various segmentations based on language, religious groups like Punjabi,
Hindi, Assamese etc.
 Impact of Foreign Culture on
Business
Foreign culture has affected India in a significant manner :
For Example,
1. Our eating habits have changed dramatically.
2. Occasions Such as „Valentines day‟ have gained as much
importance as other major festivals and provide a huge
business opportunity to people all over the country.
3. The dressing and apparels segment is reaping benefits of the
changing Indian Culture.
Increasing exposure of media such as television and internet,
international travel etc. are responsible for this
transformation.
 Hofstede Index
Individualism vs. collectivism

Small vs. large power distance

Masculinity vs. femininity

Weak vs. strong uncertainty

Long vs. short term orientation

 Individualism
Vs

Collectivism
 Individualism/Collectivism is the relationship
between individuals and their fellow individuals.
Hofstede said that individualism stands for a society
in which the ties between individuals are loose.
Everyone is looking after him or herself and their
immediate families only.

 Collectivism stands for a society in which people

are integrated into strong cohesive groups, which
protect them throughout their lives.
 Individualism is often regarded as the characteristic
of a modernizing society, while collectivism reminds
us of both more traditional societies and the failure of
the communist experiments.
 Doing business in India involves building relationships.
Indians only deal favorably with those they know and trust
- even at the expense of lucrative deals.
 It is vital that a good working relationship is founded with
any prospective partner. This must take place on a
business level, i.e. demonstrating strong business acumen,
and at a personal level, i.e. relating to your partner and
exhibiting the positive traits of trustworthiness and honour.
 Canada has Individualism as the highest ranking in
Hofstede‟s Dimension.
 Power Distance
 Hofstede proposed Power Distance as the
extent to which the organizations expect
and accept the unequal distribution of
power.

 A high Power Distance ranking indicates

that inequalities of power and wealth
have been allowed to grow within the
society. These societies are more likely to
follow a caste system that does not allow
significant upward mobility of its citizens.
 A low Power Distance ranking indicates
the society de-emphasizes the differences
between citizen's power and wealth. In
these societies equality and opportunity
for everyone is stressed.
 The Hofstede analysis for India suggests a large power
distance society and all other measures are relatively
moderate. This would be indicative of the fact that India is in
the midst of change. The traditional caste systems has been
outlawed, however the large power distance score indicates
that the attitudes still remain.
 India’s Power Distance score was very high for culture,
with a ranking of 77 compared to a world average of 56.5.
 This Power Distance score for India indicates a high level of
inequality of power and wealth within the society.
In India, social hierarchies are very much in place and even at
work it is not easy to be friendly with one‟s boss in most
organizations. Calling one‟s boss by his first name is rare in
India. In fact abuse by seniors is also common and usually the
employee is helpless and his only recourse is to leave.
 Canada's Power Distance is relatively low, with an index of
39, compared to a world average of 55.
 Masculinity/Feminine
 This Hofstede Dimension concept of a culture refers
to the distribution of roles between the men and
women in a cultural society. Studies revealed that
men‟s values differ from those of the women.
 The assertive aspect of a culture has been named
masculine and the caring modest aspect has been
termed as feminine.
 In a masculine society men are supposed to be
tough, focused and assertive while women are
supposed to be more modest and caring. Masculine
individuals are characterized as aggressive and money
oriented.
On the other hand in a feminine society
both men and women are supposed
be modest, tender and concerned
with the quality of life.
 Feminine individuals are characterized
as people oriented and less interested
in personal recognition.
 India has Masculinity as the third
highest ranking Hofstede Dimension
at 56, with the world average just slightly
lower at 51. The higher the country ranks
in this dimension, the greater the gap
between values of men and women.
 It may also generate a more competitive
and assertive female population, although
still less than the male population.
 Uncertainty Avoidance
 This dimensions focuses on the level of tolerance
for uncertainty and ambiguity within the society -
i.e. unstructured situations. A high Uncertainty
Avoidance ranking indicates the country has a low
tolerance for uncertainty and ambiguity.
 A low Uncertainty Avoidance ranking
indicates the country has less concern
about ambiguity and uncertainty
and has more tolerance for a variety
of opinions.
 This is reflected in a society that is
less rule-oriented, more readily accepts
change, and takes more and greater risks.
 India's rank in the Uncertainty Avoidance
dimension is 40, compared to the world average of
65.
 On the lower end of this ranking, the culture may be
more open to unstructured ideas and situations. The
population may have fewer rules and regulations with
which to attempt control of every unknown and
unexpected event or situation, as is the case in high
Uncertainty Avoidance countries.
 Normally a low score is „good‟, as it means that the
society has fewer rules and does not attempt to
control all outcomes and results. It also means a
greater level of tolerance for a variety of ideas,
thoughts, and beliefs and a high tolerance for
ambiguity.
 Long Term Orientation
 It measures the importance
attached to the future versus
the past and present.
 Values associated with Long
Term Orientation are thrift
and perseverance; values
associated with Short Term
Orientation are respect for
tradition, fulfilling social
obligations, and protecting
one's 'face'.
 India's Long Term Orientation Dimension rank is
61, with the world average at 48.

 A higher Long Term Orientation score can be indicative

of a culture that is perseverant and parsimonious. India
has a very high score meaning that their culture is more
persistent and thrifty.
 Indian‟s have a sense of shame that is shared amongst a
group of people and relationships are viewed by order of
status. It is expected that the Indian businessperson will
need to plan further out in their business plans because
of their need for Long-Term Orientations.
 HOFSTEDE INDEX COMPARISON
INDIA
• Power Distance Index
(PDI) - 77
• Individualism (IDV) - 48
• Masculinity (MAS) – 56
• Uncertainty Avoidance
Index (UAI) – 40
• Long-Term Orientation
(LTO) - 61
WORLD
• Power Distance Index
(PDI) - 56.5
• Individualism (IDV) –
56.5
• Masculinity (MAS) – 51
• Uncertainty Avoidance
Index (UAI) – 65
• Long-Term Orientation
(LTO) - 43
HOFSTEDE INDEX COMPARISON

INDIA WORLD

Source: http://www.geert-
hofstede.com
 INDIA vs USA  INDIA vs CHINA

 Source: http://www.geert-hofstede.com
 Family Life Cycle
• It is a way of segmenting the Family Market
at different stages of life cycle to determine
the products and services that people buy at
each stage.
• This model describes the stages which
consumer happen to be in their lives as they
have families.
• The model was developed by Wells and
Gruber in 1960s.
 Young Singles
 Young singles who live alone or
with their family.
 Low individual income and less
financial burden.
 Fashion and recreation oriented.
BUY:- Two Wheelers, Gift Items,
Movies, Computers, Mobile Phones
etc.
 Note: The current proportion of
population under 25 years in India is
51% and the proportion under 35
is about 66%.
source - http://www.youthportal.gov.in/statistics.htm
 Newly Married Couples
Young families, No Children.
High Income.
High level of purchase of
homes durable goods.
BUY:- Spend heavily on Cars,
clothing, Vacations & Leisure
activities, highest average
purchase of durable goods
especially furniture and
appliances.
 Full Nest 1
 First Child arrives.
 Home purchasing at peak.
 Spending dominated by
children needs.
 BUY:-Furniture for the baby‟s
room and other furnishings
are bought, as well such
appliances as a washer, dryer,
and television set. In addition,
many child related expenses
are now added, including
baby food, baby medicines,
doctor‟s visits and toys of all
sorts.
 Full Nest 2
 Youngest child reaches school.
 Family spending is children centred.
 Families in this stage are still new product
oriented but tend be less influenced by
advertising because they have more buying
experience.
 BUY:- Money invested in financial
instruments for future of their children and
themselves.
 Full Nest 3
 Older married couples with dependent
children.
 School and exam dominated household.

 Expenditure to support children‟s education.

 BUY:- Expenditure on children and their

belongings like motorbikes, computers,
fashion etc
 Empty Nest 1
 Children leave home and establish their
own nest.
 Income at highest level and expenses low.
 Spending on newly married children.
 BUY:- luxuries and home improvements etc

Empty Nest 2
 Reduction of income for individuals.
 Get dependent on their children and
spending is on their health.
 Corruption
 Corruption may be defined as any conduct which
amounts to influencing the decision-making process of a
public officer or authority, or influence peddling
 dishonesty or breach of trust, by a public officer, in the
exercise of his duty;
 insider dealing.
 India has been
 ranked at 74.

 Source: Wallstreet Journal

 What is black money?
• Black money is the sum total of transactions deliberately kept out of
the books of accounts by household and business in the economy.
• Dishonest industrialists, scandalous politicians and corrupt
IAS, IRS, IPS officers have deposited in foreign banks in
their illegal personal accounts a sum of about $1500 billion,
which have been misappropriated by them.
• This amount is about 13 times larger than the country's
foreign debt.
• With this amount 45 crore poor people can get Rs 1,00,000
each.

• Once this large amount of black money and property comes back to
India, the entire foreign debt can be repaid in 24 hours.
 Causes of black money

 Corrupt business practices

 Political and bureaucratic corruption
 Prohibited trades like liquor and drugs
 Manipulation of public expenditure
 Inadequacy of power to the tax authority
 Ineffective enforcement of the tax law
 Implications on our economy

 Black money generated every year in

India accounts for 20 % of GDP which will
be around 160 billion US dollars.
 Black money is like block money.
 Creation of a Parallel Economy
 Used now days in financing terrorist‟s
activities and also put in “hawala” for
illegal transactions
 Maggi in India
 Nestle India Ltd. (NIL) the Indian subsidiary of
the global FMCG major, Nestlé SA, introduced
Maggi brand in India in 1982.
 Maggi is the iconic brand of Nestle.
 With the launch of Maggi noodles, NIL created
an entirely new food category – Instant
Noodles – in the Indian packaged food market.
 Being the first mover, NIL successfully managed
to retain its leadership in the instant noodles
category even until the early 2000s.
 Initial Strategies of Maggi-The

Culture Effect…
Maggi had to fight hard to be accepted by Indian consumers with
their hard-to-change eating habits. At that time, Indian
consumers were rather conservative in their food habits.
They preferred to eat traditional Indian dishes rather than
canned or packaged food.

► Snacks like samosas are usually bought out, and outside food is
generally considered unhygienic and unhealthy. The other
competitor, „homemade‟ snacks overcame both these problems but
had the disadvantage of extended preparation time at home.
 Maggi was positioned as the only hygienic home made snack!
 Maggi was positioned as „2-minute noodles‟ under the instant
food category .And this gave the implied understanding to the
consumer that it was a „between meals‟ snack. The company
could have easily positioned the product as a meal, either
lunch or dinner. But, it chose not to do so, because the
 Indian consumer mindset did not accept anything other than
rice or roti as a meal .
 Initial Strategies of Maggi-The
Culture Effect…
• The firm did not position it as a „ready-
to-eat‟ meal either, as the housewife
prefers to „make‟ a meal for her kids
rather than buy it for them.
• And if she can make it in two minutes
with very little effort, then obviously it‟s a
hit with her!
• What‟s more, if kids also love the taste,
the product is as good as sold! So the
„2-minute‟ funda coupled with
the „yummy taste worked!
Changing trends in India due to
Socio Cultural changes
 Social networking as a Marketing Tool
Marketers‟ main business purpose is building brand equity and
influencing consumers to buy their products or services.

The social dimension of marketing however needs to be

integrated into the complete marketing strategy of businesses.

Marketers are looking at ways to build environments in which

they engage users to the extent that they become passionate
advocates of the brand and in this way attract and influence other
users to buy the product or service.

In 2009, 34% of companies where using blogs, compared to 21%

in 2008.
Wikis were used by 32% in 2009, and 24% in 2008 .
Social Networking was used by 28% in 2009 and 27% in 2008.

Source : Building the web2.0 enterprise. McKinsey Global Survey, June 2009.
 How does social marketing contribute
to the business objectives?
B2C Marketing C2C Marketing
 Brands using C2C marketing
techniques
Adidas

EA Sports

BMW

Crest

P&G

Jeep
 Youth Empowerment
Products are catered at
Youngistan.

Job Hopping is a common trend.

Goal oriented

Technocrats. More open to new

technologies and products.

Aware of their rights.

 Changing Face of Indian
Entertainment Industry
 From K-Serials to
Reality Shows &
Socially oriented serials
such as “Balika Vadhu”.
 Movies have been
made on more
contemporary issues.
 Single screens to
Multiplexes.
 Corporate houses are
funding movies.
Change in the way cricket is
played

Indian Premier League

 IPL (Indian Premier
League)
A huge cultural change.

India moving from test cricket to club cricket.

Page 3 Is The Way To Be: In a country obsessed with Bollywood & cricket,
IPL has just the right mix. The star quotient in sports has never been so
high.

The stands packed mostly with young males 15-25 years , having the time
of their lives.

The best players from across the world, the cheerleaders flown in, the best
brands offering customized merchandise.

Unlike their parents, today‟s Indians are familiar with the world‟s best &
latest. And they will not settle for less
 Contd..
Metros Going Global: Mumbai, Chennai, Kolkata are no longer about the
Ghats, the Madrasis & the Bongs.

The IT & ITeS boom has made our metros into multicultural,
multilanguage, multiethnic, melting pots, with enough Gora presence.

Homogeneous yet heterogeneous: Saurabh Tiwari, Manish Pandey &

Harbhajan‟s being on the Mumbai Indians team will be giving sleepless
nights to Raj Thackery & his MNS. But that‟s what our cities are today &
that‟s what we have come to accept.

Fast & Furious: Time is at premium & patience a forgotten virtue. For a
young India, IPL is instant gratification. Three hours of excitement &
fast-paced action.
 Business Aspect of IPL T20
IPL salaries higher than English Premier League footballers.

Second only to the American National Basketball Association (NBA) league

IPL‟s average salary, calculated over a year, is 2.5 million pounds whereas
Average salary is 2.62 million pounds.

Indian Premier League would generate a revenue of $1 billion(about Rs

4,700 crore) this season.

In the 211-team list currently monitored by average first-team pay, Royal

Challengers Bangalore comes in at 12th, at an average of 57,833 pounds
a week, standing two places above Manchester United.

Source : The Economic Times 24/03/2010 & 29/03/2010

Changing Social & Ethical
beliefs
Homosexuality is generally considered a taboo subject by
both Indian civil society and the government.

On 2 July 2009, a Delhi High Court ruling decriminalized

homosexual intercourse between consenting adults and
judged Section 377 of the Indian Penal Code to be conflicting with
the fundamental rights guaranteed by the Constitution of India.

International pressure
The United Nations urged India to decriminalize homosexuality by
saying it would help the fight against HIV/AIDS by allowing
intervention programs, much like the successful ones in China and
Brazil.
 contd…
 The Supreme Court on Tuesday verdict that live
in relationship i.e. living with one another
without marriage is not illegal and cannot be
defined as “criminal offence”.
Implication:
 Population Control.
 Higher Adoption Rate.
 Higher Adoption Rate would lead to decrease
in Beggary.
 Higher Decision making power leading to
independent thought process.
 Changing Business
Environment

Corporate Social Responsibility

Introduction

CSR is about how

companies manage the
business processes to
produce an overall positive
impact on society.

The continuing commitment by business

to behave ethically and contribute to
economic development while improving
the quality of life of the workforce and
their families as well as that of the local
community and society at large.
 Definition

World Business Council for Sustainable

Development:

“Corporate Social Responsibility is

the continuing commitment by
business to behave ethically and
contribute to economic development
while improving the quality of life of
the workforce and their families as
well as of the local community and
society at large”.
Market forces driving the need for
organizations to address CSR
1) Economic considerations
2) Ethical considerations
3) Innovation and learning
4) Employee motivation
5) Reputation or brand
6) Market position or share
7) Strengthened supplier
relationships
8) Cost savings
Source: KPMG's International Survey of CSR
Reporting (2009).
Which areas are covered by CSR?
Responsibility towards
Shareholders.

Responsibility Towards
Employee

Responsibility Towards
Consumer.

Responsibility Towards
Community

Human Rights
 CSR in India

Nearly all leading corporates in India are involved in corporate social

responsibility (CSR) programmes .

The leading areas that corporations are working on are education, health,
environment, livelihood promotion and women's empowerment. .

Microfinance, slum improvement and agricultural development issues are

also gaining prominence as CSR activities.

Over 90% of all major organizations surveyed were involved in CSR

initiatives.

The private sector is more involved in CSR activities than the public/
government sector.
 Contd..

CSR activity in India picked up after the liberalization of the economy in 1991.

Most companies initiated action in the early 90's and now have a formal policy in place.
One third or more still do not have a policy but do pursue CSR actively.

Notable efforts have come from the Tata Group, Infosys, Bharti Enterprises, Coca
Cola India, Pepsico and ITC Welcome group, among others.

Four Indians, including Sunil Mittal, Chairman and Managing Director of the Bharti
Group, non -resident Indian (NRI) businessman Anil Agarwal, Shiv Nadar, HCL
Technologies Chairman and non government organization (NGO) activist Rohini
Nilekani were featured in the Forbes list of '48 Heroes of Philanthropy'.
 Contd..
Some 300 corporate houses, on an aggregate, have identified 26
different themes for their CSR initiatives. Of these 26 schemes,
community welfare tops the list, followed by education, the
environment, health, as well as rural development.

India has been named among the top ten Asian countries paying
increasing importance towards corporate social responsibility (CSR)
disclosure norms.

India was ranked fourth in the list, according to social enterprise

CSR Asia's Asian Sustainability Ranking (ASR).

Source: http://www.ibef.org , ASSOCHAM's 'Eco Pulse Study' on CSR

for 2009-10
Indian Companies implementing CSR
 CSR at TATA
JAMASETJI TATA - A visionary ahead of his times.
AREAS OF IMPACT
• Environment
• Employee Relations
• Stimulating Economic Growth
• Civic Amenities & Community Service
• Population Management
• Sports and Adventure
• Health for All
• Relief During Natural Calamities
• Education / Arts and Culture
Implementing these principles over 100 years are
part of organizational development
 1912 - 8 hour workday
 1916 - Social Welfare Scheme launched for employees
 1920 - Leave with pay
 1934 - Profit Sharing bonus
 1934 - Tata Steel responded to earthquake in its Bihar
province with relief supplies
 1951 - Planned family norms promoted at community level
 1970 – Included Corporate Social Responsibility in its Articles
of Association
 1979 - Launched concerted rural development initiatives
Founder member of the Global Business Coalition on
HIV/AIDS
First Indian company to publish Corporate Sustainability
Report as per G R I guidelines
 Stimulating Economic Growth
Tata Steel and its subsidiaries provide business opportunities to
ancillary units

Institutions such as National Institute of Technology, R.D.Tata

Technical Education Center, and Savak Nanavati Technical
Institute provides technical and job oriented training

Promoting rural economy through natural resource

management, micro financing and credit, and training for
gainful employment

Tata Steel caters to over 600 villages and several company

towns, in the provinces of Orissa and Jharkhand
 Hindustan Unilever
Limited
 HUL‟s Corporate
purpose-
“ The Highest standard
of corporate behavior
towards everyone we
work with, the
communities we
touch, and the
environment on which
we have an impact”
 Project Shakti
Lifebuoy
Swasthya
Objective is to Chetana Program
 To create income  Single largest rural
generating capabilities for
underprivileged rural
health, hygiene
woman by providing a programme.
sustainable micro
enterprises opportunity  To educate people
 To improve rural living about basic Hygienic
standard through health habits.
and hygiene awareness.
 Shakti is pioneering effort in  Covered 15000
creating livelihood for rural villages,8 states and
woman.
70 million people.
 Other efforts of CSR at HUL
Ankur – ( seeding)
 Started for Handicapped children.
 Aim was to provide special education , services to children.
Kappagam – ( shelter) Same as Ankur.
Asha Dhan
 Supported Mother Teresa, Missionaries.
 Mother Teresa‟s Mission – Serve poorest of poor
 Helped abandoned, challenged and HIV patients.
Disaster relief – Rebuilding Lives
 Reconstructed a village in Kachch District.
 Provided with School, Playground, community center.
 Renamed as “ yashodadham”
 ITC E-Choupal
 Started in the year 2000
 Target Area so far 38,000 villages, 6500 kiosks, 9 states
 Wholly owned by ITC
Why it become a success ?
 Only initiative to attempt to combine Services and an
Effective Business Model successfully
Designed to address the issues such as:
1. Fragmented farms
2. Weak institutions
3. Involvement of intermediaries
4. Information Asymmetry
 Other CSR Initiatives and
Green Measures
 Coca-Cola India has started with a corpus of
US$ 10 million for its CSR activities in 2008. It
has undertaken US$ 25–30 million a year project
on water conservation, and the project "Elixir of
life" to provide drinking water to nearly 30,000
school children. Coca-Cola India won the 'Golden
Peacock Global Awar for Corporate Social
Responsibility – 2008' for these initiatives.
 Contd..
• ArcelorMittal will spend about US$ 500 million as part of
its CSR initiatives inJharkhand and Orissa.

• Bajaj Auto, Ashok Leyland, Tata Motors, Mahindra & Mahindra

and Eicher Motors have come together to develop hydrogen-
Bajaj blended compressed natural gas (HCNG)-run vehicles to tackle
Auto,Ashok the problem of rising pollution.
Leyland,Tata
Motors,M&M

• Tata Motors and space agency ISRO are likely to launch the
prototype of the world's cleanest vehicle that will run on
hydrogen and leave behind nothing more than a trail of
water vapour
 Contd..
• Global Compact, in association with FICCI, is also organising the first ever
• national convention on 'Excellence in Corporate Citizenship and Global
• Compact'.

• Pepsico India has signed the CII-Code for Ecologically Sustainable

Business
• Growth recently

• BHEL has joined hands with a UN body 'Global Compact„ for greater focus
on corporate social responsibility.
 Women Empowerment
1 ) Industrial zones were being set up. As a result of the
extensive use of machines particularly in the field of textile
and clothing, manpower was greatly needed to work in
factories.
 Thus, female labour was absorbed by this industry.

 Today more than 75% of women work in textile factories.

2 ) Change in the structure of the family unit,more nuclear

families  the traditional role of women began to lose
importance
 trade unions began to fight for equal wages ,thus authorities
concerned were pressurized to change those obsolete laws
and replace them with more equal ones.
 Contd..
 3) Another factor, which has played a major role in boosting up
the status of the women, is education

 4) Media keeps us informed about changes occurring in

western society where women are gaining an increasing
respect, thus affecting mentality of Indian women.

 5) Modernization is taking place, the role of the women will

keep changing. Many young women are postponing their
marriages to lay more emphasis on their personal career.
 The Business tree

WOMEN

FAMILY
STRUCTURE

CHILDREN
Business
EDUCATION
 WOMEN
 In 2009, the Male to Female ratio
was 1.06 male(s)/female

 Employment of Women in organized sector was

18.8% in 2002 which rose to 18.8% in 2004

 Female literacy rate was 54.5% as

compared to Male Literacy rate which is
76.9% in 2009
 Women in all walks of life
 A women's role has changed tremendously and is making
its greatest impact in our society today.

 Women's role has changed at an accelerating rate and

have part in areas such as Politics, Professional Training
Jobs, Medicine, Business and Law.

 Discriminating women on the basis of gender diminished,

as women won applauds in all the fields of life including
politics, sports and even in defense services.
Taking Over Male-Dominated Industries
Ritu kumar, The fashion
designer queen.

Outstanding Women
Entrepreneur Award
Managing Director,
Britannia Industries

CEO of JP Morgan Asia Pacific

Kalpana Morparia

11th Rajiv Gandhi

Awards

Chairman,
Vandana Luthra
Curls and Curves
(VLCC)
  The film industry too has a seen an increase in
number of actresses and starlets

Sports

Politics

Sunita Narain,
Environmentalist
From housewife to corporate
women tycoon
Transition Miss Universe Miss
world  Mrs India
From Purdah system to becoming
the Face of the world
 The changing trends in Rural Area
Samaj Driven to Self Driven

Restricted to kitchen
Starting cottage industry
Women Empowerment and micro credit
Self Help Group Model:
Savings

Credit

SHG members Savings SHG group

Trainings
Support and
Job work
linkage
Credit services Business
development

NGOs
Support and
Banks linkage
services
Beauty Culture class – Quite popular
Typing classes – Job Oriented course
enabling them to get wage employment
 Various steps taken by
Selp Help Gropus
Rural women in Tamil Nadu are
independently participating in the
business of making chapattis under
the guidance of self-help groups.
A group of 20 women are working under
the self-help group Shivaskathi Mahalir
Sangam.
SHG – Poverty eradicators “We have received an order of 3000
chapattis from the TVS Company near
Kothandapalli. Earlier, we used to face lot
of difficulties, but now we are earning
2000 out of these 3000 chapattis. We have
received 22650 rupees from the Central
Government funds as the loan from the
banks,” said Laxmi, member of the
Shivasakti Women Group.
URBAN CONTRIBUTION TO RURAL:
 Modern agricultural inputs
 Tools and implements for rural industries, transport and
communication
 Goods and services for rural housing, construction of social
infrastructure and electrification
 Education, health and medical services
 Food processing
 Marketing services
 Demand for rural products
 Various Social schemes
 Annapurna Scheme
 Assistance to NGOs
 CAPART Sponsored
 Freedom Fighters Pension Scheme
 Growth Center Scheme
 Liberation and Rehabilitation Scheme
 Maternity Benefit Scheme
 Members of Parliament Local Area Development Scheme
 National Family Benefit Scheme
 National Old Age Pension Scheme Others Prohibition and
Drug Abuse Prevention Scheme
 Short Stay Homes Social Defence Scheme
 Socio-Economic Programme
 Women reservation bill,2010
 One-third of the total available seats would be reserved for women in
national, state, or local governments.
 And this number will be 181 . The Bill seeks to reserve for women 181 of
the 543 seats in the Lok Sabha and 1,370 out of a total of 4,109 seats in the
28 State Assemblies.

 The women‟s reservation Bill was finally passed in the Rajya Sabha with 186
members voting for it and only one voting against it.

Now the bill will be introduced in the Lok Sabha

 EDUCATION
 A person is said to be literate if he/ she is 15 years and
above and can read and write
 Approximately 35% of illiterate world population is of India
 In 2007, adult literacy rate is 66% from 12% in 1947
 In 2009 Literacy rate for men was 76.9% for men and
54.5% for women
 Kerala is the most literate state in India, with 90.86%
literacy and Bihar is the least literate state with 47%
literacy.
 To promote Education Govt. launched Sarva Shiksha
Abhiyan to provide free and compulsory education for age
group 6–14 years, Mid Day Meal scheme etc.
Educational interventions – preventing
deviancy at the very onset

 Balwaris

 GaliSchools
 Learning Centers
 Continued…
 7 Balwaris catering to 175 children for early childhood
care and education
76 gali schools catering to 1750 children who have never
been to school to prepare them for mainstream
50 learning centers catering to 1000 children for out of
school children to minimize their loss
A Balwari Class
A Gali School
Primary Education at the Rural
Development Complex
 An audio visual class in progress in the
community

The overall Plan budget for higher education is to be increased by Rs.2,000 crore over
Interim B.E. 2009-10.
Children During their Computer Class
Education Free and Compulsory Education Act 2009 to provide
for free and compulsory education for all children o
the age 6 to 14 years, was published in the Gazette
of India on August 27, 2009

19 per cent of World‟s

Children live in India .

Children in the age group of

5-14 constitute about 253
Million (24.6 Per cent)

87 Million children (34 per

cent of total population of
children in the country) are
not attending educational
institutions Mid Day Meal scheme
Children continue to form a sizeable portion of labor
force in several fields of employment around the world.

Not in Labor
Force In Labor force All children

Schooling status No of children

Not Attending 41041287 7678681 48713707
Attending 221878607 1371027 223263012
All children 262919894 9049708 271976719
Percentage of
children
Not Attending 15.09 2.82 17.91
Attending 81.58 0.5 82.09
All children 96.67 3.33 100
 Regional Distribution of child labour

 Distribution of child labor is not uniform across different

states.
 The highest percentage is in Andhra Pradesh ( around
6.6%)
 The lowest percentage is in Kerala ( around 0.2%)

 Most of the poorer

states have higher

no of child workers.
Women groups – acting as agents of change

Nine Adult Education Group Catering to

120 women
 . . . Treatment and awareness camps
As far as Child Health is concerned, India today has disturbing figures like
5000 children under 5 dying every single day
. . Mobile health services
 Some rural areas are still behind and
devoid of major advancements
 Indian village marks 25 years in dark despite
electric posts February 14, 2010,CNN world

 For a village in India's faraway northeast, it is time for an unusual jubilee: Posts to
convey electrical power arrived in Kanugaon in 1985. In 2010, residents still find
themselves without electricity -- leading them to mark the 25th anniversary of what
they refer to as a life in darkness.
 The district of Mainpuri in Uttar Pradesh, is also one such unfortunate village
 A degree college in a village which does not
have a proper primary school

 Village is about 30 km from Etawah

 Points out a District administration official.

„„People first need primary schools. The literacy

level in the entire district is extremely poor.
What will people do with a college,‟‟
 Child marriage is still prevalent
in India.

 One such gory incident recently came to

the fore in a remote village of Kathua
district, in Jammu and Kashmir (J & K),

 where a 10-year-old girl of class IV was

„sold‟ to a man three times of her age.
The blog of the Lutheran World Federation (LWF) Youth Desk
 Changes in marketing Practices
 CHILDREN
 How children are affecting business dicisions.

• SAFFOLA
• My Daddy Strongest
• Though Saffola‟s target market is not children.

• Esteem: My papa‟s big car

 Lilliput Kidswear Ltd. had an annual turnover of Rs 182
crores in FY 06-07. Lilliput is currently growing @ 88.5%

Babies are the most adorable ones that any parent

can have.

project sales in the babycare

supplies market shall touch $6.6
Billion by 2010.
TO Tap the Rural market: Project Shakti

 Hindustan Unilever Limited (HUL) to tap this market conceived

of Project Shakti.
 This project was started in 2001 with the aim of increasing the
company‟s rural distribution reach as well as providing rural
women with income-generating opportunities.

 This is a case where the social goals are helping achieve

business goals.
 The recruitment of a Shakti Entrepreneur or Shakti Amma (SA)
begins with the executives of HUL identifying the uncovered
village.
The representative of the company meets the panchayat and the village head
and identify the woman who they believe will be suitable as a SA.

After training she is asked to put up Rs 20,000 as investment which is used to

buy products for selling. The products are then sold door-to-door or through
petty shops at home. On an average a Shakti Amma makes a 10% margin on
the products she sells.
Commercialized beauty
 Commercialised beauty

 Earlier

 Women used to utilize household products

like : Turmeric, Besan, multani mitti, lemon,
rose leaves,orange peel off.
 Now..
 Uncountable creams, shampoos,
 soaps, hair-oils etc

 Cream itself has uncountable varieties anti

wrinkle cream
 Sunscreen
 Anti –ageing
 Fairness cream
 Moisturizing lotion
No wonder the Indian beauty market is growing
at 13% P.A and valued at $8.3 bn

 Numerous fitness centres

 Saloons are mushrooming in every corner.
 Spa‟s increasing demand
 The metrosexual man wants it all
 It‟s not a woman‟s domain anymore. Men staying glued to
mirror or hopping to beauty salons to enhance their looks is
becoming quite common.
 Whether he is an executive, a college student or an
entrepreneur, he is very much into the „endlessly-admiring-
oneself‟ syndrome.
 Due to globalization in the last two decades, people have
become more aware.
Earlier there were only few advertisements targeting men -
soaps, shaving foams - but now you see so many ads
targeting men like fairness creams, deodorants and
apparels.

As the media reaches every corner of India and so these

products find a place in every household.”
 Increasing awareness among
Indians
 The Indians today are becoming Health conscious.

 No doubt there has been an increasing rate of fast food

joints in the country, but the awareness regarding fitness
has made gyming and weight loss programs a craze
among Indians.

Size zero craze

 Facts on Social sector development
Fiscal 2009-10 saw the strengthening of several public initiatives and programmes with
a view to cushioning the impact of the global slowdown on the more vulnerable
segments of the population in the country.

While some of these programmes were a part of the ongoing interventions to give effect
to a more inclusive development strategy.

Thus emphasis in favour of higher allocation to social-sector development given in

recent years continued to be reflected in the allocations under the Union Budget
2009-10.

 The share of Central Government expenditure on social services including rural

development in total expenditure (Plan and non-Plan) increased to 19.46 per cent in
2009-10 from about 10.46 per cent in 2003-04
 Contd..
 Sector-specific increases including in education,
health and rural development were
reinforced in the Budget allocations for 2009-10
 Contd..
 Of the total number of 7,073 sanctioned ICDS(Integrated
Child Development Services) projects,6,196 were
operational by September 30, 2009.
 Thank You
 Conclusion
o Socio- Cultural factors influence business and managerial decision making
to a large extent.
o An organization which ignores these factors is moving towards its own
doom.
o One cannot expect loyal customers until one conforms to their social and
cultural norms.
 We need bold, vigorous and proportional allocations to combat
issues like Child Labor, School dropouts, Infant mortality,
Malnutrition etc.

 However, the allocation of 40,100 crores to the NREGA and the

7,266 crores drought relief package for Bundelkhand is laudable.
 This allocation to Bundelkhand will revive the hopes of a better
future for thousands of children affected by the severe drought in
the belts of Uttar Pradesh and Madhya Pradesh.
 References:
 http://www.babylon.com/definition/Sociocultural_Environment/Engl
ish
 http://en.wikipedia.org/wiki/Society
 http://ignitethemind.today.com/2009/01/04/cultural-conformity-a-
necessary-evil-or-a-tool-of-survival-2/
 Economic Survey 09-10
 The Economics times
 The Indian Express.com
 Blog of the Lutheran World Federation (LWF) Youth Desk.
 The Hindu Business Line Women mean business.
 Globalshiksha.com
 http://www.scribd.com
 Indian Labor Journal October 2009 (Anoop K Satpathy)
 Economic & Political Weekly – Child Labor – a vicious cycle (Kiran
Bhatty)
 Modern Child Slavery ( Youth Advocate Program )
 References:
 Economictimes.com
 Hindustantimes.com
 KPMG International Survey of CSR Reporting (2009)
 www.youthportal.gov.in
 Wall Street Journal
 McKinsey Global Survey June 2009
 IBEF.org
 Indianstats.com
 Reuters.com
 http://www.geert-hofstede.com
 ASSOCHAM‟s “Eco Pulse Study” on CSR 2009-10
 FORBES list.