GROUP 6TOPIC:

A) SOCIAL AND CULTURAL ENVIRONMENT.

B) TECHNOLOGICAL ENVIRONMENT.

C) COMPETITIVE ENVIRONMENT.

CULTURE

• Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving.

Meaning Of Culture

• Culture is a collective programming of the mind that distinguishes the members of one group or category of people from another.

• Culture is the sum of total of the learned behavior of a group of people that are generally considered to be the tradition of that people and are transmitted from generation to generation.

The Nature of Culture• Culture is based on the uniquely human capacity to classify experiences, encode such classifications symbolically, and teach such abstractions to others

• It is usually acquired through enculturation, the process through which an older generation induces and compels a younger generation to reproduce the established lifestyle; consequently, 

HOFSTEDE’S CULTURAL DIMENSIONS

• It is a framework for cross cultural communication, developed by Geert Hofstede.

• Hofstede studied how values in workplace are influenced by culture. According to him, there are five cultural dimensions.

• They are:-

1. Power Distance Index (PDI)2. Individualism v/s Collectivism3. Masculinity v/s Femininity (MAS)4. Uncertainty Avoidance Index (UAI)5. Long-Term Orientation (LTO)

Hofstede’s cultural dimensions

• PDI is inequality in power distribution in the society that establishes hierarchy and so is accepted by the lower degree of members of the society.

• This index define the society in integrated groups that emphasize on "I" versus "we" concept.

• A high individualism ranking of a country shows that individuality and individual rights are encouraged while, a country with low individualism ranking shows that the country follows collectivism.

Power Distance Index (PDI)

Individualism v/s Collectivism

• This index differentiates the two counterparts. Masculine for heroism, achievement and caring for weak whereas Feminine for modesty and caring views equally with men but notably less empathetic than men.

• This index defines society's tolerance for ambiguity in which people opt for something unexpected out of the status.

• A country with high uncertainty avoidance ranking show that the country has high tolerance for uncertainty and ambiguity, while a country with low uncertainty avoidance ranking show it has low tolerance.

Masculinity v/s Femininity (MAS)

Uncertainty Avoidance Index (UAI)

• This dimension connects past, present and future actions and challenges.

• Long-Term oriented societies give more importance to the future they have pragmatic values towards reward persistence, saving and capacity for adaptation.

• In short term oriented society values promoted are related to the past and the present. Short term oriented society is traditional. It believes in safety.

Long-Term Orientation (LTO)

• The value system of the Founders and Top management have a great effect on the choice of business. The Value System also has a great effect on the mission and objectives of the organization, business policies and practice values serve as basic guidelines for smooth functioning of business. The value system and ethical standards are the most important factors that determine a organizations strategy, business policies, practices, HRM, etc.

• All organizations have different values. The value system plays an important role in the success of an organization. The value system adopted by an organization determine how it will be perceived by people, how the society will react to its products, services, value for its customers, value for quality, value for reasonable pricing, value for morals, value for ethics, etc.

Traditional values and its impact

The value system of an organization includes the following:-

RESPECT FOR CUSTOMERS – Respecting the customer, treating them with utmost dignity, speaking to them with mannerism and considering the customer as god.

RESPECT FOR THE ENVIRONMENT – Creating eco-friendly products that good and not harmful to the environment.

DELIVERING PRODUCT OF SUPERIOR QUALITY – Creating good

quality goods for the consumers. VALUE TOWARDS EMPLOYEES – providing good environment to

the employees, providing a clean place, filtered drinking water, facilities for women, clean food, etc. to employees. Also providing bonus to employees.

SOCIAL AUDIT

• Social audit is a technique used for finding out how the social responsibilities are being fulfilled by the organisation. A social audit is a way of measuring , understanding ,reporting and improving the social and ethical performance of an organisation.

Social Audit

According to GEORGE STENIER • “Social audit is a report of social

performance in contrast to the financial report which is concerned with economic performance”

Definition

1.MULTI-PERSPECTIVE -Aims to reflect the views of all those people involved with Or affected by the programme.

2.COMPREHENSIVE -Aims to report on all aspects of the organizations work and performance.

3.PARTICIPATORY - Encourages participation of stakeholders and sharing of their values.

4.MULTIDIRECTIONAL - Stakeholders share and give feedback on multiple aspects.

5.REGULAR -Aims to produce social accounts on a regular basis so that the concept and the practice become embedded in the culture of the organization covering all the activities.

Features

.

6.COMPARATIVE - Provides a means whereby, the organisation can compare its own performance each year and against appropriate external norms or benchmarks, and provide for comparisons with organisations doing similar work and reporting in similar fashion.

7.VERIFICATION -Ensures that the social accounts are audited by a suitably experienced person or agency with no vested interest in the

organisation.8.DISCLOSURE -Ensures that the audited accounts are disclosed toStakeholders and the wider community in the interests

of accountability and transparency.

Benefits 1. PROVIDES BENEFITS TO CONSUMERS :Social audit makes an

organization responsible towards customers.

2.BENEFICIAL FOR THE EMPLOYEES -Social organization is beneficial

through increasing the efficiency of the employees and evaluating the

working ambience and wages, salaries and their welfare measures.

3.BENEFICIAL FOR THE SHARE HOLDERS-Social audit makes the

organization responsible to give reasonable return to

shareholders, through regular and interim dividend. 4.IMPROVES STANDARD OF LIVING- Social audit helps in increasing the

standard of living of people.

Methods 1.SOCIAL PROCESS AUDIT-Social audit is a process to monitor any organization indulged in social Programmes.

2.COMPREHENSIVE SOCIAL AUDIT

3.FINANCIAL STATEMENT FORMAL AUDIT

4.CONSTITUENCY GROUP AUDIT-The audit comprehensive which includes financial statement and constituency group.

5.CORPORATE RATING APPROACH-This audit can also demand a corporate rating

CORPORATE GOVERNAN

CE

• “Corporate Governance is concerned with holding the balance between economic & social goals & between individual & community goals. The corporate governance framework is there to encourage the efficient use of resources & equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporation and society.”

Introduction

Meaning • Corporate governance is a term that refers broadly to the rules, processes, or law by which business are operated, regulated, and controlled. The term can refers to internal factor defined by the officers, stockholders or constitution of a corporation, as well as to externals forces such as consumers groups, clients and government regulation.

Benefits • Good corporate governance ensures corporate success and economic growth.

• It lowers the capital cost.

• Good corporate governance also minimizes the wastages, corruption, risks, and mismanagement.

• It helps in brand formation and development.

Role and Importance •FINANCIAL REPORTING AND DISCLOSURES : According to SEBI Committee appointed under the chairman of Shri. Kumar Mangalam Birla, “Adequate financial reporting and disclosure is the stone’s of good corporate governance.”•ACCOUNTABILITY AND RESPONSIBILITY : Corporate governance fixes responsibilities on the Board of Directors and management and holds them accountable for the task .•SEPARATION OF OWNERSHIP AND MANAGEMENT : The need of Corporate Governance is mainly due to separation of ownership and management control in the modern corporate firms.•PRACTICALS IN NATURE : Corporate Governance is less in academic relevance and more in practicals relevance.•STAKEHOLDERS : Corporate Governance looks at all the stakeholders instead of just at the shareholders.

SOCIAL RESPONSIB

ILITY

• Social responsibility of business means duties of an organization towards the upliftment of people and for the benefit of the society.

•Social responsibility is an ethical or ideological theory that an entity whether it is a government, corporation, organization or an individual has a responsibility towards the society.

•It is the obligation to take those decisions and to perform those actions which are desirable in terms of the objectives and value of the society

Introduction

EMPLOYEES

CONSUMERS

GOVERNMENT

SHAREHOLDERS

SOCIETY SOCIAL

RESPONSIBILITY

• TOWARDS THE SHAREHOLDERS : A business enterprise has the responsibility to provide a fair return to the shareholders or owners on their capital investment and to ensure the safety of such investment.   The corporate enterprise on a company form of organization must also provide the shareholders with regular, accurate and full information about its working as well as schemes of future growth.

• TOWARDS THE EMPLOYEES : Management of an enterprise is also responsible for providing opportunities to the workers for meaningful work. It should try to create the right kind of working conditions so that it can win the cooperation of workers.

• TOWARDS THE CONSUMERS : Supply of right quality and quantity of goods and services to consumers at reasonable prices constitutes the responsibility of an enterprise toward its customers. 

• TOWARDS GOVERNMENT : An enterprise must respect the laws of the country and pay taxes regularly and honestly. It must behave as a good citizen and act according to the well accepted values of the society.

• TOWARDS SOCIETY : It must protect the natural environment and should avoid bad, effluent, smoky chimneys, ugly buildings dirty working conditions. It must also develop a proper image in society through.

TECHNOLOGICAL ENVIRONMENT

• Technological environment is the state of technology prevailing in a business.

• A slight change in this environment hinders the company’s smooth functioning.

Introduction

Features•Includes techniques of productions, innovations & inventions.

•Optimum use of resources.

•Matches consumers’ expectations.

•Change is the main feature.

•Wide spread.•It makes technology possible.•Requires research & development.•Increasing importance.•Shows country’s progress too.

Impacts

•Increased productivity.•Need of professionals & skilled employees.•Huge investment.•It creates substitutes.

•Increased business mobility.•Entering different markets at low costs.•Provides security to the business.•High expectation.

COMPETITIVEENVIRONMENT

Meaning• Competitive environment means the immediate competitive factors in which an organization conducts it activities.

• A competitive environment in business is the dynamic external system in which it competes and functions

Michael porters five forces analysis :•Rivalry among existing competitors.•Threat of new entrants.•Threat of substitutes.•Bargaining power of buyers.•Bargaining power of suppliers

• Large number of firms• Slow growth of market• High fixed costs• High storage cost of perishable products• Less product differentiation• High exit barriers• Diversity of competitors

Rivalry among existing competitors

the factors influencing rivalry are as follows:

• Government Policy and laws• Capital Requirement• Economies Of Scale• Product differentiation• Barriers To Exit

Threat of new entrants

Entry barriers are as follows: :

• Substitutes means the products of other firms.

• So, threat of substitutes means the threat when the demand for product of firm gets affected because the price of the substitute product of other firm gets changed.

Threat of substitutes:

• Number Of Buyers• The Size Of Orders• Potential Of Backward Integration By Buyers• Number Of Firms Selling The Same Product• Cost Of Switching

Bargaining power of buyers

factors determining the bargaining power of buyers are as follows:

• Number And Size Of The Suppliers• Scarcity Of Resources• Cost Of Switching• Importance Of buyer To The Seller• Unique Product

Bargaining power of suppliers

the factors determining the bargaining power of suppliers are as follows::