BBM 505: Unit 3: Reference handouts

Socio- Cultural Envt.

SOCIO-CULTURAL ENVIRONMENT:

HUMAN DEVELOPMENT:

International Transparency Index Indias rank has been 82nd.-91st (Very Low) HD index India ranks 128th 12 states within India have Naxlite terrorism. 2-3% of GDP on health in India. (World average is 6%) 3-4% of GDP on education (world: 10%) Per capita income in India: $ 850 By 2015, Indias poverty will remain 25% ($ 1.5/day) Chinas will reduce to 6% (though in 1990, India- 50%, China 60%) Rural poverty in India 21%, Urban 25%, Overall 19-20%

Social development Indicators: Capacity building Health Education Skill development Human development is about enlarging human choices in terms of long and healthy life, knowledge and decent living (Renowned social scientist- Maqbool Haqs Book: First thing first) WHO: 15% of total infant deaths in India are due to contamination of water. 73% deliveries without proper assistance In china, Bare foot doctors.

In HP, co-operative based hospital welfare society, standard treatment guidelines , purchase directly from producers (no intermediaries), restriction on private practices, user charges based (self-financing) India has 3 times more vulnerability as well immunity fro diseases like cardio vascular diseases, diabetes, National Rural Health Mission Integrated Child development Program (45% malnutrition in India in 0-3 years child) National rural employment guarantee scheme (NREGA)- Now contract payment through post-office or banks. Lahol spiti potato growers cooperatives- Most succeful in HP, unfortunately not for Apple.

In India total tax payers are 4 crores, out of whicj 3.5 are govt. employees. Potential tax payers are 20 crores. Only 70,000 showing their income more than 10 lakhs. Regional divide: USA (upper shimla area), UK (una & kangra) regions

. Education: 80,000 students moving overseas for higher education in return of only 8000 coming in. Only 8 % of eligible group (18-24 years) getting Higher education in India (Japan 40%, S.Korea 80%) Enrollment ratio is 10%. (National knowledge commission projects to increase 15%) Education is not of exportable quality. Spending only 3-4 % of GDP on higher education.
Social organisation Social organization refers to the ways in which people relate to one another, form groups and organize their activities, teach acceptable behavior and govern themselves. It thus comprises the social, educational and political systems of a society. The exporter's ability to communicate depends to some extent, on the educational level of the foreign market. If the consumers are largely illiterate, advertising materials or package labels may have to be adapted to the needs of the market. In this regard, however, a company marketing baby food in a certain African country put the picture of a smiling child on the outside of the jar. The local resident assuming there were preserved babies inside, avoided the product! In addition, there are unspoken signals which identify cultural differences, from certain taboos to less obvious practices like the time taken to answer a letter. In some societies, for instance, an important issue is dealt with immediately; in others, promptness is taken as a sign that the matter is regarded as unimportant, the time taken corresponding with the gravity of the issue. In a culture where great importance is attached to the family unit, promotional efforts should be directed at the family rather than the individual. The size of the family unit differs from one culture to another. It can range from the nuclear family, i.e. mother, father, and children, to the extended family which includes many relatives and whose role is to provide protection, support and economic security to its members. In the extended family, characteristic of developing countries,

consumption decision-making takes place in a larger unit and purchasing power patterns may be different from those evident in western cultures. In any society, certain occupations carry more prestige, social status and monetary reward than others. In India, for example, there is a strong reluctance amongst people with university education to perform 'menial' tasks using their hands, even answering the telephone. In many countries, including France, Italy and Singapore, financial independence is considered essential for occupation-related prestige. In Japan, however, the majority of university-educated professionals tend to prefer working for large multinational firms than for themselves. Social organisation is also evidenced in the operation of the class system, e.g. the Hindu caste system and the grouping of society members according to age, sex, political orientation, etc. Religious beliefs, attitudes, values, space and time While language, material culture, aesthetics and social organisation are outward manifestations of a culture, it is a society's religious beliefs, attitudes and values that dictate the behaviour of its members. Religious beliefs A religious system refers to the spiritual side of a culture or its approach to the supernatural. Western culture is accepted as having been largely influenced by the Judeo-Christian traditions, while Eastern or Oriental cultures have been strongly influenced by Buddhism, Confucianism, Taoism and Hinduism. Although very few religions influence business activities directly, the impact of religion on human value systems and decision-making is significant. Thus, religion exerts a considerable influence on people's actions and outlook on life, as well as on the products they buy. In certain part of the world, such as Latin America, the influence of religion extends even beyond the individual or family and is manifested in a whole community's deep involvement in, and devotion to, the church. A society's religious belief system is often dependent on its stage of human or economic development. Primitive tribesmen tend to be superstitious about life in general while people in technologically advanced cultures seem to have dismissed the notion of traditional religious worship and practice in favour of a more scientific approach to life and death. To disregard the significance of religious beliefs or superstitions evident in a potential export market could result in expensive mistakes. The failure to consider specialised aspects of local religions has created a number of difficulties for firms. Companies have encountered problems in Asia when they incorporated a picture of a Buddha in their promotions. Religious ties are strong in this area, and the use of local religious symbols in advertising is strongly resented - especially when words are deliberately or even accidentally printed across the picture of a Buddha. One company was nearly burned to the ground when it ignorantly tried such a strategy. The seemingly minor incident led to a major international political conflict remembered for years. (Source : D.A. Ricks, Big business Blunders) Attitudes

Attitudes are psychological states that predispose people to behave in certain ways. Attitudes may relate, for example, to work, wealth, achievement, change, the role of women in the economy, etc. Western cultures, for example, value individualism and promote the importance of autonomy and personal achievement needs. In contrast, in many eastern and developing countries, there is a strong sense of collectivism and the importance of social and security needs. For instance, the Hindu religion imparts a type of work ethic that considers work central to one's life but maintains that it must be performed as a service to others, not for one's own personal achievement. Stereotypes are sets of attitudes in which one attributes qualities or characteristics to a person on the basis of the group to which that person belongs. An international businessperson's tendency to judge others by his or her personal and cultural standards instead of attempting to understand others in the context of their unique historical, political, economic and social backgrounds could, for example, be termed an undesirable attitude. Values Values are judgements regarding what is valuable or important in life, and they vary greatly from one culture to another. People who are operating at a survival level will value food, shelter and clothing. Those with high security needs, on the other hand, may value job security, status, money, etc. From its value system, a culture sets norms, i.e. acceptable standards of behaviour. Pepsodent reportedly tried to sell its toothpaste in regions of south-east Asia through a promotion which stressed that the toothpaste helped enhance white teeth. In this area, where some local people deliberately chewed betel nut in order to achieve the social prestige of darkly stained teeth, such an ad was understandably less than effective. The slogan "wonder where the yellow went" was also viewed by many as a racial slur. Some time ago, an American lost a major contract in Greece because he did not appreciate the Greek concept of time. The Greek executive could not understand the American's insistence on setting time limits on the length of their business meetings - he and his colleagues were prepared to spend as much time in discussion as they felt was necessary. The American also insisted that the senior managers involved in the transaction be responsible only for working out the general principles of the deal, with the actual details being left to subordinates. Suspicious that this represented a lack of commitment on the part of the American, the Greek called off the deal. Many factors continuously produce cultural changes in a society - new technology, population shifts, availability of scarce resources and changing values regarding the role of education or women. Culture is thus dynamic, and exporters, particularly those involved in international travel and marketing, need to regularly assess what new products and service needs have been created, who the potential buyers and users are, and how best to reach them.

Language Language is central to the expression of culture. Within each cultural group, the use of words reflects the lifestyle, attitudes and many of the customs of that group. Language is not only a key to understanding the group, it is the principal way of communicating within it. A language usually defines the parameters of a particular culture. Thus if several languages are spoken within the borders of a country, that country is seen to have as many cultures. In Canada, for instance, both English and French are spoken; in Belgium, French and Flemish; while in South Africa there are 11 official languages with a number of other African languages also spoken by the population. In addition, there are often variations within a language - different dialects, accents, pronunciations and terminology may distinguish one cultural group from another, e.g. Englishspeaking South Africans, the British, Americans and Australians. Learning some of the subtleties of a language can assist greatly in avoiding confusion: Several brief examples of mistranslated English idioms or expressions can be cited to illustrate how often blunders have been made. One European firm certainly missed the point when it translated the expression "out of sight, out of mind" as "invisible things are insane" in Thailand. There is also the story of the phrase "the spirit is willing, but the flesh is weak" being translated to "the liquor is holding out all right, but the meat has spoiled". And consider, finally, a translation of "Schweppes Tonic Water" to the Italian "ii water". The copy was speedily changed to "Schweppes Tonic" because 'il water" idiomatically indicates a bathroom. (Source: D A Ricks, Big Business Blunders) The importance of being able to understand other languages cannot be over-emphasised - this is particularly relevant when executives travel abroad and are negotiating with people of different language groups. Because English is the predominant language of business in the western world, people with English as a home language are usually reluctant to learn foreign languages and tend to expect others to converse with them in English. In contrast, European and Far Eastern businesspersons have been willing to learn and converse in the language of their trading partners, leading inevitably to a better understanding and better rapport between the parties concerned. If exporters do not speak the language of the country they plan to visit, they should at least establish the extent to which their own language is spoken there and, if necessary, engages the services of an interpreter during discussions or negotiations. If promotional material needs to be prepared in a foreign language, it is important to ensure that none of the meaning is lost or distorted when the information is translated. Thus, translations should be undertaken within the country concerned or at least by a native of the country in question.

CSR: Corporate social responsibility (CSR, also called corporate responsibility, corporate citizenship, responsible business and corporate social opportunity is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; still others argue that it is an attempt to preempt the role of governments as a watchdog over powerful multinational corporations. All organisations have an impact on society and the environment through their operations, products or services, and through their interactions with key stakeholder groups including employees, customers/clients, suppliers, investors and the local community. While traditional business models primarily emphasise the economic aspects of organizational activity (e.g. profitability and growth), more modern conceptions of organizational behaviour lay equal stress on social, ethical and environmental impacts as exemplified by the notion of corporate social responsibility. It would be fair to say that while some business organisations remain to be convinced that social responsibility is compatible with value creation, a growing number accept that they can and should manage their social and environmental impacts in ways which benefit both the organisation and the wider society.

Definitions: There is no single, commonly accepted definition of the notion of corporate social responsibility and the concept is often used interchangeably with other terms including corporate citizenship, corporate accountability, business ethics, corporate responsibility and sustainability. Moreover definitions vary in different cultural and national settings. In the United States, for example, CSR has traditionally been defined in more of a philanthropic way. Under the American model companies make profits and donate a certain share of these profits to charitable causes. Gaining organisational benefit from such donations is seen as tainting the act of giving. By comparison the European model is much more focused on operating the core business in a way that is regarded as socially responsible, and which is complemented by investing in communities in ways that simultaneously yield business benefits. According to the World Business Council for Sustainable Development (WBCSD), corporate social responsibility is

The continuing commitment by business to behave ethically and to 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 Business for Social Responsibility (BSR) suggests that the idea of corporate social responsibility relates to business decision-making linked to ethical values, compliance with legal requirements and respect for people, communities and the environment, in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of businesses (www.bsr.org). CSR is taken to be: A voluntary activity in excess of legal compliance Concerned with the social and environmental as well as economic aspects of Organizational behavior Rooted in ethical values Central in shaping stakeholder relationships. At an organizational level, each enterprise will have a unique response to CSR, according to factors such as its resources, core competencies, management preferences and stakeholder interests, as well as the broader historical, cultural and social environment in which it exists and operates. The examples discussed in this report illustrate this diversity of response. Social Accounting & Auditing: Social accounting and auditing is a way of measuring and reporting on an organisation's social and ethical performance. An organisation which takes on an audit makes itself accountable to its stakeholders and commits itself to following the audits recommendations. Social accounting (also known as Social and Environmental Accounting, Corporate Social Reporting, Corporate Social Responsibility Reporting, NonFinancial Reporting, Sustainability Accounting) is the process of communicating the social and environmental effects of organisations' economic actions to particular interest groups within society and to society at large. Social accounting is commonly used in the context of business, or corporate social responsibility (CSR), although any organisation, including NGOs, charity and government agencies may engage in social accounting. Social accounting emphasises the notion of corporate accountability. D. Crowther defines social accounting in this sense as "an approach to reporting a firms activities which stresses the need for the identification of socially relevant behaviour, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques."[2] Social accounting is often used as an umbrella term to describe a broad field of research and practice. The use of more narrow terms to express a specific interest is thus not uncommon. Environmental accounting may e.g. specifically refer to the research or practice of accounting for an organisation's impact on the natural environment. Sustainability accounting is often used to express the measuring and the quantitative analysis of social and economic sustainability.

Purpose of Social Accounting Social accounting challenges conventional accounting, in particular financial accounting, for giving a narrow image of the interaction between society and organisations, and thus artificially constraining the subject of accounting. Social accounting, a largely normative concept, seeks to broaden the scope of accounting in the sense that it should:

concern itself with more than only economic events; not be exclusively expressed in financial terms; be accountable to a broader group of stakeholders; broaden its purpose beyond reporting financial success.

It points to the fact that companies influence their external environment (both positively and negatively) through their actions and should therefore account for these effects as part of their standard accounting practices. Social accounting is in this sense closely related to the economic concept of externality. Social accounting offers an alternative account of significant economic entities. It has the "potential to expose the tension between pursuing economic profit and the pursuit of social and environmental objectives".[3] The purpose of social accounting can be approached from two different angles, namely for management control purposes or accountability purposes.

Business Ethics: Business ethics is a form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions (known as ethicism) is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher UK road tax for higheremission vehicles). Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have redefined their core values in the light of business ethical considerations (e.g. BP's "beyond petroleum" environmental tilt).

Corporate governance:

Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. The principal stakeholders are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large. Corporate governance is a multi-faceted subject. An important theme of corporate governance is to ensure the accountability of certain individuals in an organization through mechanisms that try to reduce or eliminate the principal-agent problem. A related but separate thread of discussions focus on the impact of a corporate governance system in economic efficiency, with a strong emphasis on shareholders welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view and the corporate governance models around the world (see section 9 below). There has been renewed interest in the corporate governance practices of modern corporations since 2001, particularly due to the high-profile collapses of a number of large U.S. firms such as Enron Corporation and Worldcom. In 2002, the US federal government passed the Sarbanes-Oxley Act, intending to restore public confidence in corporate governance. CONSUMER PROTECTION: Under the Consumer Protection Act 1986, a consumer is guaranteed the following rights:

Right to be protected against the marketing of goods and services which are hazardous to life and property Right to be informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumer against unfair trade practices Right to be assured , wherever possible , access to a variety of goods and services at competitive prices Right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums Right to seek redressal against unfair trade practices and unscrupulous exploitation of consumers Right to consumer education.

Introduction The Consumer Protection Act 1986 is a social welfare legislation, which was enacted as a result of widespread consumer protection movement. The main object of the legislature in the enactment of this act is to provide for the better protection of the interests of the consumer and to make provisions for establishment of consumer councils and other authorities for settlement of consumer disputes and matter therewith connected. In order to promote and protect the rights and interests of consumers, quasi judicial

machinery is sought to be set up at district, state and central levels. These quasi judicial bodies have to observe the principles of natural justice and have been empowered to give reliefs, of specific nature and also to impose penalties for non compliance of the orders given by such bodies. The main object of these bodies is to provide speedy and simple redressal to consumer disputes. It is one of the benevolent pieces of legislation intended to protect the consumers at large from exploitation.

Consumer Protection Councils Sections 4,5,6,7 & 8 of the Act makes provision for the establishment of Consumer Protection Councils. The State Government is authorized by the Act to establish by notification, councils at the Central, State & District levels to be known as Central Consumer Protection Council, Consumer Protection Council & District Consumer Protection Council respectively. It also lays down the objects of the said councils. It also makes provisions for appointment of Chairman & other official and non-official members of the said council. Consumer Disputes Redressal Agencies This part of the Act contains 22 sections i.e. Sections 9 to18, 18-A, 19 to 23, 24-A, 24-, 25, 26 and 27. This part provides for establishment of consumer disputes redressal forum at district level, state level and central levels known as District Forum, State Commission and National Commission. It also makes provisions regarding the composition, jurisdiction, procedure to be followed by the District forum, State commission & National commission. Any person aggrieved by an order of the District forum may appeal to the State commission & an order of the State commission can be challenged before the National Commission. Any person aggrieved by the order of the National Commission can resort to the Supreme court as the last remedy. It also provides for a limitation period for preferring appeals to the State Commission, National Commission and Supreme Court. District forum, State Commission or National Commission shall not entertain any appeal filed after expiry of 2 years from the date on which the cause of action has arisen. However, the forums have the power to condone the delay in preferring appeals within such time limit if sufficient cause is shown for not filing the appeal within the prescribed time limit. What is sufficient cause will depend on the facts and circumstances of every particular case. It also makes provisions regarding enforcement of the orders of the District forum, State Commission and National Commission and penalties to be levied under the Act.

Types of Orders:

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(a) To remove the defect pointed out by the appropriate laboratory from the goods in question; (b) To replace the goods with new goods of similar description which shall be free from any defect; (c) To return to the complainant the price, or, as the case may be, the charges paid by the complainant; (d) To pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party. (e) To remove the defects in goods or deficiencies in the services in question; (f) To discontinue the unfair trade practice or the restrictive trade practice or not to repeat it; (g) To not to offer the hazardous goods for sale; (h) To withdraw the hazardous goods from being offered for sale; (ha)to cease manufacture of hazardous goods and to desist from offering services which are hazardous in nature; (hb)to pay such sum as may be determined by it if it is of the opinion that loss or injury has been suffered by a large number of consumers who are not identifiable conveniently: (hc)to issue corrective advertisement to neutralize the effect of misleading advertisement at the cost of the opposite party responsible for issuing such misleading advertisement; Jurisdiction of agencies: Districy Forum: Upto 20 Lakhs The State Commission: 20L-1 Crore National Commission: Above 1 Crore

Other details: The Consumer Protection Act, 1986 (in short, the Act), is a benevolent social legislation that lays down the rights of the consumers and provides their for promotion and protection of the rights of the consumers. The first and the only Act of its kind in India, it has enabled ordinary consumers to secure less expensive and often speedy redressal of their grievances. By spelling out the rights and remedies of the consumers in a market so far dominated by organized manufacturers and traders of goods and providers of various types of services, the Act makes the dictum, caveat emptor (buyer beware) a thing of the past. The Act mandates establishment of Consumer Protection Councils at the Centre as well as in each State and District, with a view to promoting consumer awareness. The Central Council is headed by Minster, In-charge of the Department of Consumer Affairs in the Central Government and the State Councils by the 11

Minister In-charge of the Consumer Affairs in the State Governments. It also provides for a 3-tier structure of the National and State Commissions and District Forums for speedy resolution of consumer disputes. To provide inexpensive, speedy and summary redressal of consumer disputes, quasi-judicial bodies have been set up in each District and State and at the national level, called the District Forums, the State Consumer Disputes Redressal Commissions and the National Consumer Disputes Redressal Commission respectively. At present, there are 604 District Forums and 34 State Commissions with the National Consumer Disputes Redressal Commission (NCDRC) at the apex. NCDRC has its office at Janpath Bhawan, A Wing, 5th Floor, Janpath, New Delhi. Each District Forum is headed by a person who is or has been or is eligible to be appointed as a District Judge and each State Commission is headed by a person who is or has been a Judge of High Court. The National Commission was constituted in the year 1988. It is headed by a sitting or retired Judge of the Supreme Court of India. The provisions of this Act cover goods as well as services. The goods are those which are manufactured or produced and sold to consumers through wholesalers and retailers. The services are in the nature of transport, telephone, electricity, housing, banking, insurance, medical treatment, etc. A written complaint, can be filed before the District Consumer Forum for pecuniary value of upto Rupees twenty lakh, State Commission for value upto Rupees one crore and the National Commission for value above Rupees one crore, in respect of defects in goods and or deficiency in service. The service can be of any description and the illustrations given above are only indicative. However, no complaint can be filed for alleged deficiency in any service that is rendered free of charge or under a contract of personal service. The remedy under the Consumer Protection Act is an alternative in addition to that already available to the aggrieved persons/consumers by way of civil suit. In the complaint/appeal/petition submitted under the Act, a consumer is not required to pay any court fees but only a nominal fee. Consumer Fora proceedings are summary in nature. The endeavor is made to grant relief to the aggrieved consumer as quickly as in the quickest possible, keeping in mind the provisions of the Act which lay down time schedule for disposal of cases. If a consumer is not satisfied by the decision of a District Forum, he can appeal to the State Commission. Against the order of the State Commission a consumer can come to the National Commission. In order to help achieve the objects of the Consumer Protection Act, the National Commission has also been conferred with the powers of administrative control over all the State Commissions by calling for periodical returns regarding the institution, disposal and pendency of cases. The National Commission is empowered to issue instructions regarding (1) adoption of uniform procedure in the hearing of the matters, (2) prior service of copies of documents produced by 12

one party to the opposite parties, (3) speedy grant of copies of documents, and (4) generally over-seeing the functioning of the State Commissions and the District Forums to ensure that the objects and purposes of the Act are best served, without interfering with their quasi-judicial freedom. The Registry of the National Commission is on the 7th Floor, B Wing, Janpath Bhawan, Janpath, New Delhi which remains open on all working days. For any enquiry with the Registry of the National Commission, one can contact on Telephone Nos. 011-23712109, 23712459, 23389248 and Fax No. 23712456. The filing timings are from 10.00 a.m. to 4.30 p.m. Every matter filed with the Registry is listed on the 7th day of its filing for admission before the National Commission. Functioning of District Forum, State Commission and National Commission is consumer friendly, and thus a consumer can file a complaint and also address arguments in person. In genuine cases where the complainant / appellant / petitioner before the National Commission is unable to engage the services of an advocate legal aid is provided by the Commission free of charge.
CONSUMERISM: In the good olden days the principle of Caveat emptor', which meant buyer beware governed the relationship between seller and the buyer. In the era of open markets buyer and seller came face to face, seller exhibited his goods, buyer thoroughly examined them and then purchased them. It was assumed that he would use all care and skill while entering into transaction. The maxim relieved the seller of the obligation to make disclosure about the quality of the product. In addition, the personal relation between the buyer and the seller was one of the major factors in their relations. But with the growth of trade and its globalization the rule no more holds true. It is now impossible for the buyer to examine the goods before hand and most of the transactions are concluded by correspondence. Further on account of complex structure of the modern goods, it is only the producer / seller who can assure the quality of goods. With manufacturing activity becoming more organized, the producers / sellers are becoming more strong and organised whereas the buyers are still weak and unorganized. In the age of revolutionized information technology and with the emergence of e-commerce related innovations the consumers are further deprived to a great extent. As a result buyer is being misled, duped and deceived day in and day out. Mahatma Gandhi, the father of nation, attached great importance to what he described as the "poor consumer", who according to him should be the principal beneficiary of the consumer movement. He said "A Consumer is the most important visitor on our premises. He is not dependent on us we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favour to a consumer by giving him an opportunity. He is doing us a favour by giving an opportunity to serve him." Inspite of these views consumerism is still in its infancy in our country, thanks to the sellers market and the government monopoly in most services. Consumer awareness is low due to the apathy and lack of education among the masses. No one has told them

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about their rights - to be informed about product quality, price, protection against unsafe products, access to variety of goods at competitive prices, consumer education etc. What consumerism lacks here is education and information resources, testing facilities, competent leadership, price control mechanism, and adequate quasi-judicial machinery. The providers of goods and services have been reluctant to give due consideration to consumer interest protection. In present situation, consumer protection, though as old as consumer exploitation, has assumed greater importance and relevance. Consumerism is a recent and universal phenomenon. It is a social movement. Consumerism is all about protection of the interests of the consumers. According to McMillan Dictionary (1985)"Consumerism is concerned with protecting consumers from all organisations with which there is exchanged relationship. It encompasses the set of activities of government, business, independent organisations and concerned consumers that are designed to protect the rights of consumers". The Chamber's Dictionary (1993) definesConsumerism as the protection of the interests of the buyers of goods and services against defective or dangerous goods etc. "Consumerism is a movement or policies aimed at regulating the products or services, methods or standards of manufacturers, sellers and advertisers in the interest of buyers, such regulation maybe institutional, statutory or embodied in a voluntary code occupied by a particular industry or it may result more indirectly from the influence of consumer organisations" As commonly understood consumerism refers to wide range of activities of government business and independent organisations designed to protect rights of the consumers. Consumerism is a process through which the consumers seek redress, restitution and remedy for their dissatisfaction and frustration with the help of their all organised or unorganised efforts and activities. It is, in-fact a social movement seeking to protect the rights of consumers in relation to the producers of goods and providers of services. Infact consumerism today is an all-pervasive term meaning nothing more than people's search for getting better value for their money. Consumer is the focal point of any business. Consumers' satisfaction will benefit not only business but government and society as well. So consumerism should not be considered as consumers' war against business. It is a collective consciousness on the part of consumers, business, government and civil society to enhance consumers' satisfaction and social welfare which will in turn benefit all of them and finally make the society a better place to live in. Components of Consumerism: There are various components of consumerism. First and foremost is self-protection by consumers. Consumer must be aware of his rights, raise voice against exploitation and seek redressal of his grievances. Consumers' consciousness determines the effectiveness of consumerism. It is the duty of the consumer to identify his rights and to protect them. Voluntary Consumer Organisations engaged in organising consumers and encouraging them to safeguard their interests is another important element of consumer movement The success of consumerism lies in the realisation of the business that there

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is no substitute for voluntary self-regulations. Little attention from the business will not only serve consumers interest but will also benefit them. Some businesses in India have come together to adopt a code of conduct for regulating their own activities. Regulation of business through legislation is one of the important means of protecting the consumers.Consumerism has over the time developed into a sound force designed to aid and protect the consumer by exerting, legal, moral and economic pressure on producers and providers in some of the developed countries. ******************************

I. Political Environment:
Political Variables Sovereignty Forms of Govt. Political Risks Political Strategies Sanctions Planned domestication Confiscation Broad basing Expropriation Pay-offs Nationalization Parliamentarian Lobbying Domestication Absolutist Political Economic (price, bargaining exchange, taxesPolitical Parties & control Insurance ideologies (SINGLE Political activism Local content DUAL-MULTIPARY) Political Stability

Political activism:
Political violence loss of assets or income due to o war and revolution, o insurrection or politically motivated civil strife, o terrorism and sabotage o K&R, kidnap & ransom, o extortion and theft o forced support of a political party (give us money for the XYZ Party or we will cut off the electrical power to your factory)

According to the Multilateral Investment Guarantee Agency (MIGA), a foreigninvestment insurance agency run by the World Bank, political risk concerns helped cut the flow of investments in the developing world by 23% to US$135 billion in 2003, compared with just two years earlier. While economies gained steam in 2004, politicalrisk premiums remained high, as companies stayed on the sidelines as opposed to investing abroad, according to MIGA.
o Political Risk - the risk that politics in the host country will develop in a way which makes it difficult for you to profitably carry on your business.

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How managing political risk improves global business performance: Situation Companies doing business internationally are grappling with political issues that sometimes surprise even the most experienced. A new study by PricewaterhouseCoopers and Eurasia Group shows that despite current efforts, a high percentage of multinational companies believe they are not doing all they could to manage political risk effectively. PricewaterhouseCoopers and Eurasia Group believe that more effective management of political risk can help companies protect their investments and take advantage of new opportunities, thereby improving global business performance. In our view, this requires leaving behind fear and uncertainty and integrating political risk management into a systematic process embedded in a companys other business processes. Companies doing business internationally are, by nature, willing to take big risks. We believe that big risk takers should be informed risk takersand political risk management is an essential element of risk-taking savvy. Implications When it comes to improving global business performance, managing political risk helps in two fundamental ways. First, it protects new and existing global investments and operations by helping management anticipate the business risk implications of political change or instability. Prepared and aware, management is more likely to be able to exit markets that are in danger of growing too unstable. Where short-term instability does not dampen the appetite to pursue long-term opportunity, management can implement risk mitigation and operational oversight to control against shocks. Second, for a company constantly on the lookout for new opportunities, monitoring political risk within target regions or across continents can help management hone in on political developments that foretell a business boom, beating competitors to the punch.
Successful Business Management is based on solving problems. If there were not a lot of problems, you wouldn't need managers - but because there are lots of problems, you need managers to analyze the problem, craft a solution, and monitor how the solution is carried out. Part of being a successful Int' Business Manager (especially after 911) is recognizing that risk and threat situations effect int'l business in many ways, and, these situations have to be dealt with, and "managed", or your company will be compromised and subsequently uncompetitive. In the emerging economies of Central and South America, Eastern Europe, the former Soviet Union, Asia and Africa, new business opportunities are continuing to present themselves on a daily basis as privatization takes hold, infrastructure needs grow and restrictions on foreign trade are lowered. While the potential rewards from doing business in these countries are tremendous, so are the risks. The companies that expand into these new markets with the greatest degree of success are those that do so cautiously and prudently, with the understanding that they may face political and economic risks that can cause unexpected and catastrophic losses. The possibility of loss resulting from political events such as changes in government policy, economic instability or acts of terrorism can be great." James F. Quirk, a vice president of Marsh & McLennan

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Case-Study:

Risky business: political risks still abound for foreign companies in Latin America, and insurers are there to profit They tell you in business school that reward loves risk and, apparently, that's the case in Latin America for multinational companies.Despite a wholesale move to democratic capitalism across the region, political crises in Venezuela, Bolivia, and Ecuador are creating untold hazards that may well lead to significant business losses.Expropriation, foreign exchange moratoriums, political violence--the list goes on. According to the Multilateral Investment Guarantee Agency (MIGA), a foreign-investment insurance agency run by the World Bank, political risk concerns helped cut the flow of investments in the developing world by 23% to US$135 billion in 2003, compared with just two years earlier. While economies gained steam in 2004, political-risk premiums remained high, as companies stayed on the sidelines as opposed to investing abroad, according to MIGA. U.S. insurance giant Aon says the number of large-scale confiscations of private properties from governments has tapered off dramatically in the last 20 years, but instability still exists.To mitigate potential losses, companies are turning to political risk insurance. MD International, a mid-size medical products exporter in Doral, Florida, recently purchased a policy because the company's lender required it before financing a transaction in Latin America. "We would not have been able to do the transaction without it," says Maggie Morales-Perez, chief financial officer of MD International, without giving details. "It's not something we could finance ourselves," In countries where MD International has not been able to get political risk insurance "we are out of the picture," Morales-P6rez says. As a result the company has not been able to compete in Argentina, Ecuador and Venezuela. "We have had to pass on some of the deals because we can't get insurance, which is affecting our competitiveness," she says.Some companies are finding that turmoil, whether political or economic, reduces the availability of risk insurance. "In the difficult markets, coverage is being written on a selected basis" says Matt Handwork, a partner in the Columbus, Ohio office of IRC North America, a specialty broker of political risk and trade insurance that helped MD International get its policy. "Often, many small transactions are difficult to provide coverage for because on the political risk side, if they are too small to generate enough premiums, then the insurers are not interested." While numerous factors, such as the amount of exposure and type of coverage, play a role in pricing, premiums normally range from 0.5% up to 3% a year on exposed limits. For example, the cost on a $100 investment would run from $0.45 to $2.70, based on insuring 90% of the transaction. However, rates have been known to go as high as 5% in regions where volatility is greater. Of Latin America's major economies, only Chile is considered to be a low-risk country, according to Aon, a U.S. insurance giant. Venezuela, Colombia and Ecuador are considered to be high-risk countries while Peru, Bolivia, Uruguay, Paraguay and Argentina are considered medium-high risk countries.Despite the region's volatility, insurance companies and brokers say that demand is high. "We had significant growth last year," says Dan Riordan, executive vice president and managing director at Zurich North America. "There is enough going on in the emerging markets to keep us busy for some time to come. Large multinationals that have operations throughout the world are coming back into the market rather than self-insure." Zurich North America writes up to $75 million per risk covering up to 15 years. "We cover large and we cover long," Riordan says. "Our industry doesn't have a high frequency of loss, but it does have a high severity. That's how we look at price risk."Political risks can shift rapidly, disrupting business and leading to unexpected losses. Different businesses can react in different ways, and that's why underwriters first look closely at a company seeking risk insurance and at its experience in a particular region. "We look at the project specifics, how well that project has been

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vetted, structured and organized," says Riordan.Insurers also look at how a company will deal with problems should they arise. Will a change in government affect its industry? Does it have a strong joint venture partner? Does it have dispute resolution agreements built into contracts? "If that's not been addressed, then those are risks we would not consider," Riordan says. Availability also depends on a company's industry. For example, general manufacturing plants are considered less risky than companies extracting more politically sensitive products such as oil, gas or silver.Bolivia is a prime example, says V. Manuel Rocha, former United States Ambassador to Bolivia and managing director of Globis Group, a Miami global business development company. "Bolivians feel gas and oil should be developed by a public, national company, not a private company. So when private companies move into those areas, they become vulnerable," says Rocha.

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