Page 180 - DMGT401Business Environment

Unit 7: Socio-cultural Environment

The Indian rural market with its vast size and demand base offers great opportunities to Notes
marketers. Two-third of the country's consumers live in rural areas and almost half of the
national income is generated here.

Business ethics refers to the measurement of business behaviour on standards of right and
wrong, rather than relying entirely on principles of accounting and management. Ethics is
not merely desirable but is also essential for the smooth functioning of a business.
Ethical decisions are voluntary human actions. A person cannot escape his personal liability
by saying he committed an act because of a senior's pressure.
People prefer doing business with an honest person. This means ethical companies attract
more suppliers and business contracts.
Corporate governance has in recent years succeeded in attracting a good deal of public
interest because of its apparent importance for the economic health of corporations and
society in general.
Good corporate governance is good business because it inspires investors confidence,
which is essential in attracting capital. In India corporate governance is not a new concept.
The socio-economic obligation of business refers to its responsibility in preventing to
prevent economic consequences of business from adversely affecting public welfare.
The primary responsibility of business is to increase shareholders' wealth, to give good
returns on investment, to give dividends at the proper time, to protect the interests of
even small shareholders, to listen to and respect shareholders, to regularly invite
shareholders to participate in decision-making.
Industrialisation is doing much irreparable harm to the environment. It is therefore an
obligation on them to not only morally, but also legally undo the damage by taking
serious and responsible steps to protect the environment and to keep it healthy condition.

7.9 Keywords

Business Ethics: Measurement of business behaviour on standards of right and wrong
CII: Confederation of Indian Industries

Corporate Governance: Framework of rules, relationships, systems and processes within and by
which fiduciary authority is exercised and controlled in corporations
Corporate Social Responsibility: Decision taken for reasons at least partially beyond the firm's
direct economic or technical interest
Cyclical Unemployment: Result of the trade cycle which is a part of the capitalist system
E Choupal: Initiative taken by ITC to smoothen the distribution network of agriculture produces

EVA: Economic Value Added
Involuntary Unemployment: When a person is willing to work, but is not getting work
Project Shakti: Rural self-help group initiative by HUL to push the penetration of its products
Seasonal Unemployment: When production season ends, the workers are rendered unemployed
Sudden Unemployment: Happens due to completion of work or some change in firm

Unemployment: State of no work for a man fit and willing to work
Voluntary Unemployment: Person is out of job of his own desire, doesn't work on the prevalent
or prescribed wages.

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