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.

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

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

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.

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

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.

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 and Cyclones etc.