SOCIETAL ENVIRONMENT

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

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

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

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

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

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Ideals: ideals refer to the societal norms which define what is expected, right or proper in a given situation. Norms are enforced by sanctions, i.e., by rewarding the right behavior & punishing the wrong behavior. Preferences: preferences refer to societys defination of those things in life which are attractive or unattractive. Preferences may differ between cultures.

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