Introduction
Business operates within the social system and is influenced by societal elements. Business, in turn, has an impact on society. Great businesses contribute to a prosperous society. The social environment includes the cultural dimensions of society. Cultural aspects are important for business aspects such as product development, promotion, business negotiations, human resource management, and product marketing. When negotiating with foreign companies, cultural aspects of society are also important. As a result, cultural factors influence how businesses are conducted in any country. A variety of factors influence social change, including technological, cultural, demographic, biological, economic, environmental, political, and psychological factors.
Business and Society
The social system and the business environment are inextricably linked. The way a business operates influences the types of products it produces, how it should be organized, the marketing strategies it should employ, and the values and norms it should adhere to. The way a business operates, its innovations, and the products it offers have an impact on society and influence social attitudes, values, customs, and so on. A business must adapt to these uncontrollable social environment elements. The term "business social environment" refers to all of the factors that have a social impact on the business.
Changing Concept of Business
Profit maximization was the traditional goal of business. The modern perspective, on the other hand, is quite different. Profit is now secondary for many businesses. A narrow definition of business is a commercial activity conducted solely for profit. Today, business is a social institution that is an essential component of the social system. It has a significant impact on how people live and work. Business cannot exist in isolation from the rest of society. Today, the entire society is regarded as the business environment. There are three key ideas that link society and business.
Values: Each business organization develops certain beliefs, systems and values for which they stand and which is a source of institutional drive. These are determined by:
- Mission of business as a social institution
- The nation/region where the business is located
- The type of industry
- Nature of its employees
These values become the guides and motivators for decision making within the organization.
Viability: The defining factor that drives us to live, grow, and achieve the best we can is viability. This means that rather than firms adjusting to external forces, firms must initiate forces that can cause changes in the environment.
Public visibility: The extent to which an organization's activities are known to people outside the organization is referred to as public visibility. While public image refers to how people perceive an organization's actions, public visibility refers to how well those actions are known. As a result, they are distinct. The significance of public visibility is that it exposes business activities to public scrutiny and judgments.
Thus, business, according to modern thinking, is an essential component of the social system. It is a social organ that aids in the achievement of social goals.
Effect of Society on Business
There are three major societal elements that have a direct impact on the business environment in a specific region. Every business operates within a society. As a result, various societal factors such as family, educational institutions, and religion have an impact on business. These may differ from one country to the next, from one state to the next, or from one city or town to the next.
Family: From a person's birth until his death, family is an essential part of society. Because a person lives in a family, personal decisions about buying and selling goods are influenced by the family's viewpoint. For example, in a family's culture, it is possible that parents do not support the use of a certain product, and thus sales of such a product will decrease if the majority of families in a certain region think in a certain way. As a result, businessmen must assess the needs of their families. Many events, such as the marriage of a family member, can increase the demand for goods.
Educational Institutions: Educational institutions play an important role in society. They offer information, education, and awareness. Thinking about what students should or should not buy can be beneficial when starting production. Assume a student is accustomed to drinking tea; if his teacher advises him that this is harmful to his health, the student may refrain from drinking tea, resulting in a decrease in tea sales.
Religion: Religion has an impact on society. Different ways of life are imposed by religious traditions and rituals. Certain products and food substances may be avoided by adherents of a particular faith. When marketing or introducing new products, businesses must consider religious sentiments.
Professionalization
A professional is someone who has the systematic knowledge and skills needed to carry out certain responsible functions with authority and ethics. A professional bears enormous responsibilities because he or she cannot use knowledge, skill, or authority unethically. He shall not intentionally cause harm to his customers. Thus, professionals are those who:
- Who have formally acquired the specialized knowledge and skill for management;
- Who have authority and freedom to take the right decision;
- Who have no ideological bias in the discharge of functions; and
- Whose decisions and actions are guided by certain ethical considerations.
Professionalization improves business efficiency, agility, and social responsibility. The expansion of management education has aided in the advancement of business professionalism.
Business Ethics
Business ethics is a set of moral principles and rules of conduct that apply to business. Business should not act in ways that are harmful to society's interests. Professionalization includes certain ethical principles and rules of conduct that are bound by a profession. Every member of society should follow certain moral codes and norms that comprise business ethics. Rotary International created its Code of Ethics, which employs four questions to address any ethical issue that a business may face.
- Is it the truth?
- Is it an unbiased decision?
- Will it build goodwill and better environment?
- Will it be beneficial to all concerned?
- Given below are some unethical practices that a business should avoid.
- Deceiving customers by selling sub-standard or defective items, by underestimation or any other means is not to be done.
- Hoarding, black-marketing is not to be done.
- Destroying or distorting competition is not to be done.
- Honesty should be shown while advertising, labeling and packaging.
- The image of the competitors cannot be tarnished by unfair practices:
- Accurate business records should be made.
- Taxes and other obligations should be paid promptly.
- No cartel agreements formal or informal should be formed to control price etc.
- Kickbacks or payoffs to politicians are to be refrained from.
- Payment of fair wages and fair treatment to all employees should be ensured.
