Business Environment

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Social & Technological Environment : 

Social & Technological Environment Module-4

Social Environment : 

Social Environment Social environment refers to the nature of social organisation and development of social institutions like Caste, Religion, customs , and socio-economic factors like Class structure, Social mobility , women employment etc. Impact of Social environment on Business: Caste – Competitive trading , Weaving , Metal , finance communities Religion – Prohibition on Pork & Meat , Islamic finance Customs – Women employment, restriction on overseas employment Class Structure - Upper , Middle , Manual class Social mobility – Middle to upper , Manual to Middle etc. Poverty – Low purchasing power Education – Availability of Skill & its cost Health – Long life – more allocation to senior citizens & availability of knowledge 12/14/2008 2 Surana College PG_Centre

Social Environment : 

Social Environment Social Indicators : 1. Longevity & Health 2. Education 3. Standard of Living Social responsibility of Business: Business is affected by society and vice-versa. Society includes Internal & External segments. Internal segment - owners & employees. External segment – competitors , customers, suppliers , Government , Local community. No business can be in conflict with any of these segments. Hence the business has to take care of societal interets. Responsibility to Owners : Protect capital , provide fair return to owners , ensure longevity of business , Transparency in the operation of business Responsibility to Employees : Employees are key recourses of business. Hence fair compensation , welfare,trining, development have to be provided 12/14/2008 3 Surana College PG_Centre

Social Environment : 

Social Environment Responsibility to Consumers : Consumers are the foundation of business. A dissatisfied customer is a warning signal to business. The business has to ensure the following rights of customers : 1. Right to safety – Provide safe products 2. Right to product knowledge & Education – Provide through advertisements 3. Right to product choice – Avoid monopoly 4. Right to full value – Ensure product utility & performance as advertised 5. Right to justice – Through Consumer Protection Act Responsibility to Suppliers : A good relation with suppliers is essential for quality & continuous supply of raw materials & other inputs for continuous production. Responsible business avoid the following : 1. Unfair Practices – Break contract, Delay payment, take advantage of loopholes 12/14/2008 4 Surana College PG_Centre

Social Environment : 

Social Environment Responsibility to Competitors : To engage in healthy competition , the good business strategies & practices of competitors should be learned & should not engage in the following: 1. Competitors brand assassination 2. Restrictive trade practices – Price discrimination , tie-up sale, exclusive dealership 3. Unfair trade practices- misleading advertisement, tricky prices , unreasonable product guarantee. Responsibility to Government : Responsible companies are good corporate citizens. They contribute to the development of industry and economy. These responsibilities include: 1. Pay taxes 2. Provide data 3. Implement government schemes 4. Give preference to government companies These companies find easier to obtain license, credit from public and supply order from government. Responsibility to Local community : Local support is important . The local population suffers due to companies such as water, land,polution. Hence companies should compensate indirectly by providing infrastructure, education, forestation etc. 12/14/2008 5 Surana College PG_Centre

Social Environment : 

Social Environment Environmental Cost Audit It is the method to understand & evaluate 1. How the environment is affected by companies operation 2. What are the losses both in terms of money and resources that is getting affected by the companies operation 3. How company can contribute to mitigate the loss to society and 4. To assess the performance of organisations with respect to its social responsibility. This is done through reporting of various responsibilities undertaken by organisations. The reporting is done on various factors viz. 1. Social factors 2. Ecological factors 3. Geographical factors 4. Natural calamities 12/14/2008 6 Surana College PG_Centre

Social EnvironmentEnvironmental Cost Audit : 

Social EnvironmentEnvironmental Cost Audit Social factors: a. Consumer care Labeling Quality , quantity, price etc. b. Environmental care Upkeep waste, disposal , noise, etc C. Society care Contribution to education , health etc d. Community care Providing water , road , power , job etc Ecological factors: a. Natural resources Forestation , etc. b. Soil & Land Soil conservation, recycle products etc. C. Plant & Animal Forestation , relocating animals etc d. Forest Forestation , alternate Raw material , Carbon credit etc. 12/14/2008 7 Surana College PG_Centre

Social EnvironmentEnvironmental Cost Audit : 

Social EnvironmentEnvironmental Cost Audit Geographical factors: a. Resource Endowment Use resources judiciously & Increase export b. Weather & Climate factors Minimize water contamination , air pollution , Global warming Natural Hazards: The companies should support government & people in the event of Earthquakes, Cyclones ,Draughts, Flood. 12/14/2008 8 Surana College PG_Centre

Technological Environment : 

Technological Environment Technology refers to the application of knowledge , skill, ideas to the production or improvement of goods and services. Indicators of Technological development Trends in the Science & Technology expenditure Total number of technical foreign collaborations Assistance by financial institutions for technological development & upgradation Total value of foreign outward remittances towards foreign technology like royalties, technical fees etc. Investment in R&D infrastructure -- 12/14/2008 9 Surana College PG_Centre

Technological Environment : 

Technological Environment India’s R&D expenditure – 0.8 % of GDP - $ 3.2 Bn 80 % India’s R&D expenditure is made by Government Science & Technology Policy – 2003 Advancing scientific temper in the society and integrating it with all national activity Strengthening mechanisms relating to technology development , its evaluation & upgrading Ensuring food , agricultural , nutritional , water and energy security Providing autonomy to all academic and R&D institutions Promoting empowerment of women to all science & technology activities Accomplishing national strategy & security strategies using technological advancement. 12/14/2008 10 Surana College PG_Centre

Technological Environment : 

Technological Environment India’s Tech. Environment Poor infrastructure for R&D Low govt. Expenditure Inadequate incentives Low remuneration Weak IP protection Competition from MNC India’s R&D Institutions & programs Indian Council for Scientific Research ( ICSR ) Department of Science & Technology ( DST ) Indian Council for Medical Research ( ICMR ) Indian space program Indian power program R&D by Industry Research Labs: BITS, Pilani – Material science , IT, Robotics, Biotech IISc – Bangalore – Organic,Inorganic,Physical chemistry IIT, Kanpur – CAD/CAM , Semi-conductor 12/14/2008 11 Surana College PG_Centre

Technological Environment : 

Technological Environment Inentives for R&D Income tax relies on R&D expenditure Tax deduction for sponsored program Exemption on customs duty Excise duty waiver for 3 years Depreciation for plant & Machinery Direct financial support Technology development for self reliance: Schemes are 1. PASER – Program Aimed at Technological Self Reliance partial financial assistance for technology that support self reliance 2. TATT – Transfer and Trading in Technologies To promote & support activities relating to export 8. Consultancy Support CDC ( ConsultanctyDevelopment Centre ) – Provides computerised database Provides Training Sponsor Development programs 12/14/2008 12 Surana College PG_Centre

Technological Environment : 

Technological Environment Inentives for R&D 12/14/2008 13 Surana College PG_Centre

Technological Environment : 

Technological Environment Technology Transfer It is the sale, licensing of all forms of industrial property except trade mark Channel of Technology Flow: Foreign Direct Investment in Green field investment Purely Technical Collaborations Technical –Cum – Financial collaborations Agencies facilitating Technology flow are: 1. Foreign Investment promotion Board ( FIPB ) 2. Foreign Investment promotion Council ( FIPC ) 3. Investment promotion & Infrastructure Development Cell ( IP&ID) 4. Secretariat for Industrial Assistance ( SIA ) 5. RBI Based on the type of collaboration approval will be given by RBI’s Automatic Route SIA / FIPB Route 12/14/2008 14 Surana College PG_Centre

Technological Environment : 

Technological Environment Technology Transfer Methods of Technology Transfer: Training or employment of technical experts Supply of components , machinery etc. Licensing agreement Design transfer Turn-key project - Build , transfer as per MOU 12/14/2008 15 Surana College PG_Centre

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