Unit IV: Social Environment

Business Environment
BBA LLB
Social Environment
 Social Responsibility
Meaning & Various Social Responsibility of Business.
Business Ethics:
Meaning and Importance.
Consumerism:
Concept, Consumer Rights and Consumerism in India.
Social Responsibility of Business
Meaning
Various Social Responsibility of
Business
Social Responsibility: Meaning
Social responsibility of business refers to
what the business does, over and above the
statutory requirement, for the benefit of the
society.
The word responsibility connotes that the
business has some moral obligations to the
society.
Responsibilities of Business
Social Orientations and Involvement of Business
Claimants of Social Responsibility of Business
Tata’s Vision for Better Tomorrow
“At a time when Max Weber, the great German Sociologist, was
advocating his theory of transforming a traditional society into a
modern one through industrialisation and modern management,
little did he know that in the jungles of Bihar an Indian visionary
had already planned the establishment of the first Steel City (not a
mere factory) in Asia.
Before he passed away, Jamsedji Tata had in a letter to his son Dorab
instructed him: “Be sure to lay out wide streets planted with shady
trees, every other one of a quick growing variety. Be sure there is
plenty of space for lawns and gardens. Reserve large areas for
football, hockey and parks. Earmark areas for Hindu temples,
Mohammedan mosques and Christian churches.” No wonder
Jamshedpur emerged as a beautiful and well developed city.
Healing Eyes of the World
An organization serves 4,00,000 People annually and
majority of them free and still make profit.
No Government donation
Gave away their core systems and processes and still
thrive
Aravind Eye Care System
Principles
We Wont turn anyone away
We Won’t compromise on quality
We must be self reliant

Mission
Eliminate needless blindness through compassionate and quality eye care
affordable to all

Aravind annually handles over 3.5 million outpatient visits and performs over
400,000 surgeries or laser procedures with over 50% of them free or steeply
subsidized. In addition to patient care, Aravind has substantial training
initiatives, a manufacturing unit (Aurolab), research and a consulting arm
(LAICO) to propagate best practices.
Factors Affecting Social Orientation
Promoters and Top Management
Board of Directors
Stakeholders and Internal Power Relationship
Societal Factors
Industry and Trade Associations
Government and Laws
Political Influences
Competitors
Resources
Ethical Influences
Pehchan Kaun
Why am I dying?
Darlene Coker knew she was dying. She just wanted to know
why.
She knew that her cancer, mesothelioma, arose in the delicate
membrane surrounding her lungs and other organs. She knew
it was as rare as it was deadly, a signature of exposure to
asbestos. And she knew it afflicted mostly men who inhaled
asbestos dust in mines and industries such as shipbuilding that
used the carcinogen before its risks were understood.
Coker, 52 years old, had raised two daughters and was running a
massage school in Lumberton, a small town in eastern Texas.
How had she been exposed to asbestos? "She wanted answers,"
her daughter Cady Evans said.
Business Ethics
Meaning
Importance
Business Ethics
The term business ethics refers to the system of moral
principles and rules of conduct applied to business.
In the 1930s, Rotary International developed its Code of
Ethics that is still used extensively. It uses four questions
that are called the four way ethical behaviour for any
ethical issue a business faces.
 Is it the truth?
 Is it fair to all concerned?
 Will it build goodwill and better friendship?
 Will it be beneficial to all concerned?
Ethical Principles
Do not deceive or cheat customers by selling
substandard or defective products.
Do not resort to hoarding, blackmarketing or
profiteering
Do not destroy or distort competition
Ensure sincerity and accuracy in advertising, labelling
and packaging
Consumerism Concept,
Consumer Rights and
Consumerism in India
Consumerism Definition
Philip Kotler defines Consumerism as “a social
movement seeking to augment the rights and powers
of the buyers in relation to sellers”.
Boyd and Allen state that “although often abused as a
term, consumerism may be best defined as the
dedication of those activities of both public and
private organisations which are designed to protect
individuals from practices that impinge upon their
rights as consumers.”
Consumerism Concept
Exploitation of consumer and neglect of consumer
rights lead to consumerism - a social movement to
protect consumer rights.
Consumerism implies encouraging consumption of
goods and services in an economy. It is also used to
reflect on the protection of consumer rights.
Awareness of consumer rights and demand for
consumer protection are growing all around the world
Consumerism
Consumerism is an important social movement which
aims at protecting the consumers against unethical or
immoral marketing practices of private companies as
well as public enterprises. It is neither opposed to
profits or monopoly, not antagonistic to the large
companies or big business houses.
Consumerism
An important socio-political environment confronting
the business is the growth of consumerism and the
legislative measures to protect the consumers.
Consumer movement had its conspicuous beginning
and development in the United States. There has been
a growth of consumer awareness in most countries
leading to growth of consumerism and growing
demand for consumer protection.
Consumer Rights
Important consumer rights include:
1. Right against exploitation by unfair trade practices.
2. Right to protection of health and safety from the goods and services
the consumers buy or are offered free.
3. Right to be informed of the quality and performance standards,
ingredients of the product, operational requirements, freshness of the
product, possible adverse side-effects and other relevant facts
concerning the product or service.
4. Right to be heard if there is any grievance or suggestions.
5. Right to get the genuine grievances redressed.
6. Right to choose the best from a variety of offers.
7. Right to a physical environment that will protect and enhance the
quality of life.
Consumerism -India
The major causes of consumerism in India
Rising prices,
Poor product performance and service quality,
Product shortages
Deceptive advertising
Consumerism India
Slow Consumer movement
Lack of education and information, generally the
poor economic condition and poor enforcement of
laws, make Indian consumers very vulnerable to
exploitation
 Consumer Guidance Society of India (CGSI),
Mumbai, and the Consumer Education and
Research Centre (CERC), Ahmedabad
Consumer Protection Act, 1986
Act has provided various rights and responsibilities to
consumers.
Provides safeguard to customers against defective
goods, deficient services, unfair trade practices and
other forms of their exploitation.
Act has provided three tier redressal agencies where
consumer can file complaints. These are District
forum, State Commission and National Commission.
Consumer Protection Council
The objects of these Councils are to promote and protect the
rights of the consumers such as:
Right to be protected against marketing of hazardous goods
and services;
Right to be informed about the relevant factors about the
goods and services so as to protect the consumer against
unfair trade practices;
Right to reasonable choice;
Right to be heard;
Right to seek redressal of legitimate complaints; and
Right to consumer education.
Consumer Protection
Consumerism
A well developed consumerism is essential for the protection of
consumer rights. Consumerism has the following important roles to
play:
1. Consumer Education: The consumer is given information about
various consumer goods and services. This relates to prices, what the
consumer can expect, standard trade practices, etc. Consumers are also
made aware of their rights and responsibilities and the ways of getting
the grievances redressed.
2. Product Rating: In order to guide the consumer in his choice of
products, some of the agencies (for example, CERS, Ahmedabad) carry
out tests and reports the results of such tests.
3. Liaison with Government and with Producers: Another important role
of consumer organisations is to maintain liaison with, producers on
the one hand and Government authorities on the other. As
Government has a key role in protecting consumer rights, the
consumer organizations have an important role to see that government
plays its role.