BUSINESS ENVIRONMENT

ACCORDING TO KEITH DAVIS: Business environment is an aggregate of all

conditions, events and influences that surround and affect it. It is broad and everchanging as it separate elements interact with one another. It is broadly divided into internal environment and external environment

 INTERNAL ENVT.
It is related to those

EXTERNAL ENVT.
It is related to those

factors which are internally related to business It is controllable

factors which are external to the business It is further divided into two parts: Micro envt.
Macro envt.

External envt.
MICRO

MACRO

ENVIRONMENT Customers Suppliers Marketing intermediaries Competitors society

ENVIRONMENT Political envt. Economic envt. Regulatory envt. Technological envt. SOCIO-CULTURAL ENVT. Demographic envt. Natural envt. Global envt.

SOCIO CULTURE

Meaning: Culture includes several behavioral factors shared by the members of a society and passed through generations.

IMPACT OF CULTURE ON BUSINESS

Culture creates people:
The concept of the culture is important to

the business, because it is the culture that determines the ethos of people
Organizational culture has functional and

disfunctional consequences.

Culture and Globalization:

Understanding and appreciating the cultural differences is

essential. When the people from the different cultures converge in a work place, the problem of managing diversity comes in.
If the diversity is not managed it results in increasing

turnover, reducing communication and interpersonal conflicts.

Any move from one country to the another will create a

certain amount of confusion, disorientation and an emotional upheaval.

CULTURE DETERMINES GOODS AND SERVICE

Culture determines the type of goods

and services a business should produce. Business should realise the cultural differences and bring out the desired products accordingly.

Marriage Customs And manners

Language

BUSINESS DECISION Family Attitude

Religion

Ambitious and complacent

Ambitious and complacent:

Ambitions to grow and remain

complacent depend on the culture. Majority of people are known to be complacent.

Religion:
Religion refers to the specific an institutionalized

set of beliefs and practices generally agreed upon by a number of persons.

People go to any extent and practice abnormal

activities in the name of religion.

Attitude:
Attitude is the positive or negative

evaluation which makes an individual in a particular way. Culture determines the attitude of the people towards the business.

Family:
Family plays an important role for the

development of a personality. The joint family system was extremely popular in ancient times, but has given way to the nuclear family in the modern times.

Marriage:
Traditionally marriage has 3 objectives:

performances of household sacrifices, progeny and the sexual pleasure. A single may spark off protest from women and approval from men.

Customs and manners:

Customs are established practices, manners

and behaviors that are regarded as appropriate in the particular society. The business man should understand manners and customs of his or her country citizen.

For examples:
Indian culture does not prefer drinking

liquor. Many people do not touch it, because in our societys definitions of liquor is unattractive and not preferred, like many people steal things this is not preferred but still since they like it they do it. Hence what is always considered (preferable/ideal or proper) may not always match with our views of enjoyable.

 In italy, a US company that set-up a corn-

processing plant found that it,s marketing efforts failed because italians thought of corn as pig food.

 The nestle makes a variety of instant coffee to

satisfy tastes of different countries because in every country people prefer a different tastes of coffee.

 In many countries green colour is considered

as a sign of prosperity in others it is not considered good and is related to illness.

 Even small mistake in studying socio-culture

environment can lead to big problems in the survival of the business. Procter and gamble had to face problems due to culture differences. They ran into big losses, learnt a lesson and came out of them.

CULTURAL BLUNDER
CASE STUDY SOME YEARS BACK, JAPANESE TELEVISION AUDIENCES WATCHED AS A JAPANESE WOMANS HUSBAND WALKED INTO THE BATHROOM AS SHE WAS BATHING. WHILE SHE TOLD HIM ABOUT THE NEW BEAUTY SOAP SHE WAS USING, HE STROKED HER SHOULDER AND

HINTED THAT HE WAS INTERESTED IN MORE THAN HER SOAP . MANY JAPANESE VIEWERS , DID NOT LIKE IT , THEY FELT OFFENDED . THEY FELT THAT THE MAN WAS SHOWING BAD MANNERS TO ENTER IN HIS WIFES BATH . PROCTOR AND GAMBLES EFFORT TO SELL ITS CAMAY SOAP TO JAPANESE CONSUMERS WERE SET BACK BY THIS ADVERTISEMENT . P&GS STAFF FINALLY SOLVED THE BLUNDER AND ENTERED FOREIGN MARKETS SO WELL THAT THE COMPANY EXPECTED OVER HALF OF ITS

TOTAL INCOME FROM FOREIGN SALES IN THE 1990S . THEY LEARNT A LESSON FROM THE ABOVE MISTAKES . THEY LEARNT A LESSON THAT SUCCESFUL MARKETING NEEDS A PROPER KNOWLEDGE OF DIFFERENT CULTURAL ATTITUDES AND DIFFERENT CULTURAL PRACTICES
(SOURCE : W.C.FREDRICK , ET.AL. , BUSINESS AND SOCIETY)