CHARUTAR VIDYA MANDAL’S

SEMCOM
Vallabh Vidyanagar

Faculty Name: Dr. Shuvasri Das February 5, 2020

Class: TYBBA
Subject: Business Environment
Chapter 2 : Non-Economic Environment

Government And Business Interaction And Interrelation

I. Business to Government

Introduction

Business firms have a number of responsibilities to the government. Business firms must
obey the laws and regulation of central, state and local governments. Business should look
to the government for support, encouragement and guidance. Business must also play a vital
role in helping the government to develop its function capabilities.

The few responsibilities of business to the government is as under:

1) Tax Payment – Taxes paid by the business enterprises constitute a major source of
revenue to the government. Firms themselves pay taxes on any input, sales and
income and also deduct from the salaries and wages of employees.
2) Voluntary Programmes – Business firms cooperate with government agencies on
voluntary basis in connection with various programmes such as providing help to
needy at the time of flood, droughts etc. and also help for the social work and better
environment.
3) Providing Information – Sometimes political leaders either because of inexperience
make certain decisions which is not sometimes favourable for the business, so
during decision making business leaders help the government by providing required
information that suits the business.
4) Government Contracts – Many private businesses by the government contracts carry
out projects such as housing projects, oil pipelines etc.
5) Government Services – Business offers services of its leaders to the government.
Business leaders serve on various advisory boards constituted by the government.

II. Government to Business

Introduction
The responsibility of government to business is much greater than the responsibilities of
business to government. Government has the power, will and resources to decide, shape,
guide and control business activities.

The government responsibilities towards business are as under:

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 1) Establishing and Enforcement of Law – Government establishes and enforces laws
and regulations under which the business functions. The government is responsible
for providing the “Rule of the Game” by which the business system function
smoothly and which helps in maintaining competition. It is the responsibility of the
government to enforce the laws and to provide a system of courts for adjudicating
differences between the business, individuals or government agencies.
2) Maintenance of Order – Government has the responsibility of maintaining order and
protecting the people and their property. It is impossible to carry on any business in
the absence of a peaceful environment.
3) Money and Credit – The government provides a system of money and credit by
means of which transaction is affected. It is also the responsibility of the government
to regulate money and credit and protect the integrity of the rupee.
4) Orderly Growth – Orderly growth implies balanced regional development,
distributive justice, full employment and protecting the economy against booms and
busts.
5) Infrastructure – Business needs for its effective functioning such infrastructural
facilities as transportation, power, finance, trained personnel and civic amenities. It
is the responsibility of the government to provide these facilities.
6) Information – Government agencies publish and provide a large amount of
information which is used extensively by business firm. The information regarding
banking, agriculture, commerce and industry, health, labour, atomic energy etc.
which is helpful to the citizens and business also.
7) Assistance to small industries – Small size business establishments has a special role
in the economy. Being small in size there are problems regarding finance,
marketing, knowhow and infrastructural facilities. So it is again the responsibility of
the government to provide the required facilities to provide the required facilities to
small scale industries to grow.
8) Inspections and Licenses – Government agencies conduct inspection activities. Food
and drugs for example, assuring quality products to consumers, government issues
licences to competent businesses to carry on business activities.

WHAT IS CULTURE?

In his true sense, culture is understood as that complex activity which includes by an
individual as a member of a society. Another imp aspect of culture is that it has two distinct
characteristics
(1) Shared values
(1) Passage of time

Culture of a society is shared by its members. Secondly culture ethos passes from one
generation to another generation. Therefore culture is not confined to particular time.

 Socio Cultural Environment and Business: Within national and business cultures, there
develop organisation specific and occupation-specific cultures.
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Organisational culture (or its sister-term corporate culture) refers to the philosophies,
ideologies, values, assumptions, beliefs, expectations, attitudes, and norms that knit an
organisation together and are shared by its employees. Organisational members tend to
internalize cultural nuances and like to internalize newcomers into such mores. Some of the
practices are so thoroughly internalized that no one questions them-they are taken for
granted, that is, they get institutionalized.

Besides institutionalization, deification or glorification tends to occur in organisational

cultures. Heroes emerge, especially among the founding fathers of the firm, whose
sacrifices, valorous deeds and ingenuity in the difficult initial years of the organisation or
during later crises periods are embellished into stories and sagas. The firm itself may come
to be regarded as a source of pride, and in some sense unique. Employees begin to feel a
strong bond with it that transcends material returns given by the company, and they begin to
identify with it. The organisation turns into a sort of clan and the organisational members
become ethnocentric. Clannish organisations often pose problems to managers. Most Indian
companies had developed the clan culture. The clan culture led to the collapse of several
joint ventures between Indian companies and overseas firms. Mention may be made of the
breaking up the marriage between Tatas and Daimler Benz, of Godrej with P&G and GE, of
DCM with Toyota, of LML-Piaggio and of Mahindra with Ford.

 IMPACT OF CULTURE ON BUSINESS

1. Culture Creates People: The concept of culture is of great significance to business

because it is the culture which generally determines the ethos of the people. It trains people
along particular lines, tending to put a personality stamp upon them. Thus, we have Indians,
Japanese, Americans, Germans, British and so on. It is not that all people are alike in a
particular culture. There are sub-cultures within a culture. People have their own
idiosyncrasies and are a blend of heredity, cultural experience, sub-cultural experience,
family experience, and unique personal experience. When people with different cultural
backgrounds promote, own and manage organisations, organisations themselves tend to
acquire distinct cultures.
Organisational culture has functional and dysfunctional consequences. Culture performs at
least four functions.
Firstly, culture creates distinctions between one organisation and another.
Secondly, it conveys a sense of identity for orgnisational members.
Thirdly, it facilitates the generation of commitment to something nobler than one's own self
interest.
Finally, it enhances the social system stability. Culture is the social glue that helps hold the
organisation together by providing appropriate standards for the behaviour of organisational
members.

2. Culture and Globalisation: As business units go international, the need for

understanding and appreciating cultural differences across various countries is essential.
Work motivation, profit motivation, business goals, negotiating styles, attitudes towards the
development of business relationships, gift-giving customs, greetings, significance of body
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gestures, meaning of colours and numbers, and the like vary from country to country. When
people from different cultures converge in a workplace, management will be required to
manage diversity. Workforce diversity has important implications for management practice.
Managers will be required to shift their philosophy from treating everyone alike to
recognizing differences and responding to those differences in ways that will ensure
employee retention and greater productivity while, at the same time, not discriminating.

Diversity, if positively managed, can increase creativity and innovation in organisations as

well as improve decision making by providing different perspectives on problems. Where
not managed properly, diversity is likely to result n increased turnover, reduced
communication and heightened inter-personal conflict. Any move from one country to
another will create a certain amount of confusion, disorientation and emotional upheaval.
This is called culture shock. An executive transferred from India to Germany, for example,
would require lot of adjustment to make. Language differs, climate varies, food habits are
different and; the socialization pattern will be totally new. Culture shock will be severe'
when the new environment is totally different from the old one. Organisations, particularly
MNCs, must be prepared to cope with the culture shock.

3. Culture Determines Goods and Services: Culture broadly determines the type of goods
and services a business should produce. The type of food people eat, the clothes they wear,
the beverages they drink and the building materials they use to construct dwelling houses
vary from culture to culture and from time to time within the same culture. Business should
realize these cultural differences and bring out products accordingly.

4. Language and Culture: Language is the foundation of any culture. It is an abstract

system of word meanings and symbols for all aspects of culture. Language includes speech,
written characters, numerals, symbols, and gestures of non-verbal communication.

The interrelationship between language and culture is very strong and often the farmer
determines the latter. Words provide the concepts for understanding the world. All
languages (there are approximately three thousand of them) have limited sets of words.
These restricted word sets in turn constrain the ability of the users to understand or
conceptualize the world. Since language structures the way we think about what we see and
behave, it determine cultural patterns.
The above hypothesis that language determines cultural patterns is not acceptable to several
experts. Many social scientists argue that language does not determine human thought and
behaviour patterns. For example, humans possess the physical, ability to make millions of
colour distinctions, yet languages differ in the number of hours that are recognized. The
English language distinguishes between yellow and orange, but some other languages do
not. The word “Punya” is popular in Indian 'languages but there is no equivalent of that in
the English language. Obviously, it is not that languages determine culture. It is the culture
"that comes first and requires the development of certain concepts and [thus certain words.
Notwithstanding the arguments, there is close interrelationship between language and
culture.

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5. Attitudes: Attitudes are positive or negative evaluations, feelings and tendencies which
make an individual behave in a particular way towards people or objects. Attitudes include
many things including opinion about individual freedom, democracy, truth and honesty, role
of sexes, justice, love, marriage, and sex. Of particu1ar interest to us in this context are
one's attitude towards work, attitude towards business, and attitude towards time and the
future.

Attitude towards work is important as it has significant impact on motivation, morale, job
satisfaction, productivity and other aspects of human resource management. Positive
attitude towards one's work, also called work ethic, makes a worker a more productive and a
more satisfied employee. Compensation and reward system are critical elements in
determining work attitudes. A business firm needs to devise a system of compensation and
reward that would help promote work ethic.

Japanese worker is supposed to have a strong work ethic. On the other hand, Indian ethos
such as detachment from work, nirvana, and renunciation are said to be inconsistent with
the positive work attitudes of workers. This observation is not true, for, it is only in India
that an average worker takes work as worship. For him or her work is everything. No
worker touches his or her tools, wheel, mouse or button in the morning without closing his
or her eyes for a few seconds, worshiping the almighty expressing gratitude for having
bestowed his blessing in the form of work. The Indian worker has earned appreciation from
everywhere for his or her sincerity, hard work, loyalty and honesty.

The culture of the land determines its people's attitude tow business. Business systems are a
product of beliefs, mores, and custom of the society in which they exist. In fact, their very
existence depends upon social philosophies which conduct and support various kinds of
business functions. Business people must have some basic set of philosophies to guide, their
actions. Beliefs and value systems concerning what is right and what is wrong are basic to
all business activities and serve as a justification for doing or not do something in a
particular value system

People's attitudes towards time depend on culture. Most western and capitalist societies
believe that time is money. To waste time is to waste money. For most westerns punctuality
is a must. Being late for a meeting or appointment is not only considered rude but also
offensive. Every business activity is timed in terms of hours, minutes, days, months, and
years. Long-term strategic plans are prepared to ensure targets are met in time. Time seems
to control every aspect of human Endeavour. Pay and productivity are measured in terms of
the time it takes to complete a given task. But in some other societies time is viewed as
something not to be taken seriously. Punctuality is observed rarely.

6. Collectivism and Individualism: The spirit of collectivism and individualism is related to

such personnel aspects as employee morale, multiplicity of trade unions and inter and intra-
union rivalries. It is said that our culture, unlike Christianity, stresses individual salvation
and negation of the world. Behind a small charity or a good deed, it is pointed out; there is

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the motive of self, rather than society's welfare. This is the main reason for the low morale
of our workers, multiple unions and the rivalries among them.
Contrary to popular belief, our culture did advocate collectivism and general welfare. As a
proof of collectivism, we are told about guilds which played a major role in the economy of
ancient India.
The guild united both the craftsmen's cooperatives and the individual workman of a given
trade into a single corporate body. It fixed rules of work and wages and standards and prices
for the commodities in which members dealt, and its regulations had the force of law and
were upheld by the king and government. A guild court could, like a caste council, expel a
refractory member, a penalty which would virtually preclude him from practicing his
ancestral trade and reduce him to beggary. We read in Buddhist literature of guild courts
settling quarrels between members and their wives, and the rules of Buddhist order lay
down that a married woman may not be ordained a nun without the consent of her husband
and his guild. Thus, the guild had the power not only over the economic, but also over the
social life of its members. It acted as a guardian of their widows and orphans, and as their
insurance against sickness. Its powers and functions in this respect were very similar to
those of the caste councils in more recent times, and though some authorities would
disagree with us, we cannot but conclude that the guilds played an important part in the
evolution of trade castes.

Collectivism is the hallmark of our society. Whether it is celebrating a marriage, a social

function, inauguration of a business unit or installing a CNC machine in a factory, we
believe in people and crowds. We have factories (particularly in Public Sector) which have
thousands of employees and we have trade unions whose membership runs into lakhs.

7. Ambitious or Complacent: An individual's ambition to grow or remain complacent

depends on his cultural ethos. An ambitious individual is highly motivated, is wealth
acquisitive, has a strong urge to excel, is prepared to change organisations and even take
risks. Economy becomes vibrant if a large proportion of the population comprises ambitious
people.
Majority of our people are known to be complacent. An average citizen will be happy to get
into a government job (lower the order, the better) as it assures safety of; tenure and
demands no initiative, no skills and no hard work. He is not prepared to; join the private
sector as the job here demands hard work and high productivity. Complacency of citizens is
attributed to be one of the reasons for the backwardness of our economy.

Contrary to popular belief, our society has been known for its ambition, particularly in
wealth acquisition. Ours is probably the only society in the world where wealth is
worshipped in the form of Goddess Lakshmi unlike in the West where wealth is merely
respected.

Looking at the past, in most Indian literature, the world is viewed from the angle of well-to-
do. Poverty, it is more than once said, is a living death; to serve another for one's keep is a
dog's life, and not worthy of an Aryan. From the time of the Rig Veda, which contains many
prayers for riches, worldly wealth was looked as morally desirable for the ordinary man,
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and indeed essential to lead a full and civilized life. The ascetic who voluntarily abandoned
his wealth performed an act of renunciation which entitled him to the utmost respect,
though by such renunciation, he assured himself of spiritual advancement, as well as the
way to salvation (Moksha). The fourth and ultimate aim of existence, the ascetic's life, was
not that of an ordinary man, and the theoretical classification of the four stages* of life gave
ample scope in the second stage to the householder, who was indeed encouraged to build up
the family fortunes, and to spend part of them at least on the pleasures of the senses.

8. Education: The close interface of business and higher education is a new development.
Centuries ago, each had a somewhat hands-off attitude towards the other. A relatively small
section of the intellectual elite maintained their seclusion in university halls, educating a
few selected students to become intellectual and social leaders of their nation. Education
was not for the masses who laboured in factories, fields and stores. University education
had little interest in business and businessmen had little interest in education.

9. Family: Basic to all types of social organisations is the family, the institution which
concerns itself with love, sexual relationship, marriage, reproduction, socialisation of the
child and the various levels of status and roles involved in kinship organisation. Little
wonder that the family is referred to as a remarkable institution.

The family is recognised as the institution responsible for procreation and child-rearing. In
civilized societies, especially, the process of child socialisation has come to have
tremendous significance. Gone are the days when the children should be seen but not heard;
on the contrary, the importance of childhood and the effects of home life on personality and
character formation have been widely recognised. In fact, as the basic primary group, the
family probably has more to do with the child's ultimate behavioral pattern than does any
other single environment factor, and it is on this assumption, that a loose home life is so
often associated with delinquency.

10. Authority: The exercise of authority varies according to the management styles, but
different styles are likely to be present in different cultures. One research relevant to this has
produced a measure of the cultural differences-the power distance measure. This is defined,
'as a measure of inter-personal power of influence', between a boss and a subordinate, as
perceived by the least powerful of the two, while the distance is seen as the extent to which
either participant can influence the behaviour of the other. It is suggested that the distance is
to a considerable extent determined by their national culture. The evidence for this
statement has been provided by research in 39 countries in which questions were asked on
such subjects as the fear subordinates have of expressing disagreement with their bosses
(answers expressed by 'I am afraid very frequently' through to 'I am afraid seldom'). The
answers have been assembled in a series of tables showing power distance index values
varying 94 ('very often afraid') for the Philippines to 11 ('very seldom afraid') for Austria.

11. The View of Scientific Method: It is said that, unlike Western society, our society is
steeped in fatalism and the theory of Karma. The followers of our religion do not appreciate
the logic of things logic of wealth, rainfall, demand-supply mechanization and related
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phenomena. It is also said that they believe in preserving traditional mores and are not
adaptive to things modem.
Contrary to popular belief, our views did not conflict with science. A study of the
Upanishads will show that Vedanta postulates that the universe is the result of a gradual
unfolding of the creative power inherent in the primordial substance. In fact, it may be said
that the philosophy of our religion anticipated the basic theories of biology and physics. The
very approach to things in the Upanishads, the insistence on adherence to truth and on
tireless investigation is remarkable in the nature of an anticipation of the methods of
science.

12. Ethics in Business: Ethics refers to the code of conduct that guides an individual in
dealing with others. A formal definition of ethics is that it deals with personal conduct and
moral duty and concerns human relations with respect to right and wrong. Ethics concerns
morals and philosophy. It deals with the behavior of individuals and the standards governing
the interrelationship between individuals. Ethical rules differ from legal rules in as much as
the former are not enforced by public authority whereas the latter are. Legal rules become
unnecessary when ethical rules are observed by businessmen. Society expects businessmen
to act ethically.

Business ethics (also known as corporate ethics) is a form of applied ethics or professional
ethics that examines ethical principles and moral or ethical problems that arise in a business
environment. It applies to all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations.
Business ethics reflects the philosophy of business, one of whose aims is to determine the
fundamental purposes of a company.
Ethics in business are nothing but the do’s and don’ts of a business user in the business. It
could be referred to as a set of principles that a business man ought to follow based on
social, cultural and business principles.
Business Ethics would go a long way towards helping an organization in fulfilling its social
and moral needs.

In today’s dynamic and fast changing business and economic environment the corporate
feels the need to set down a set of rules, guidelines or resolutions defining the action and
interaction as well as the reaction of the company and the individuals associated with the
company, such as its promoters, shareholders, officers, employees, suppliers and in certain
instances also the suppliers to various dynamic situation in the internal and external
environment of the company. This is done by using various tools like;
 Vision Statement.
 Mission Statement.
 Setting Corporate Objectives.
 Setting department Objectives.
 Using Career tree to set individual objectives.
 Policy document for Public behaviour.
 Policy document for rules and regulations within the organizations
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Thus Ethical issues include the rights and duties between a company and its employees,
suppliers, customers and neighbors, its fiduciary responsibility to its shareholders. Issues
concerning relations between different companies include hostile take-overs and industrial
espionage. Related issues include corporate governance; corporate social entrepreneurship;
political contributions; legal issues such as the ethical debate over introducing a crime of
corporate manslaughter; and the marketing of corporations' ethics policies.

It would cover following areas of the corporate:

 Finance: The Company has a fiduciary responsibility to its promoters and shareholders
i.e. of earning a return.
 Sales & Marketing: Carrying on with its business by providing goods and services in a
manner to the customers which is neither using nor making false claims or by way of
fraud or other such nefarious means.
 Human Resource management: The corporate has to ensure that it employs within the
framework of the law and using guidelines set under labour laws and employment
contracts. The world over use of child labour in business is a huge ethical dilemma faced
especially in developing countries wherein it is used to bring down manufacturing costs,
but is against the laws and principle’s of ILO ( International Labour Organization)
 Production: To produce using optimum quality of material and resources without
damaging or polluting the environment is the principle goal of all organizations. To
maintain ethical standards required and to also maintain low costs is an ethical challenge
typically faced by pharma, chemicals and Energy generation industries.

However with a variety of norms now critical and essential like ISO 2000 – 9001, ISO
14000 etc as also the movement towards LEAN MANUFACTURING MANAGEMENT as
well as use of various management techniques like JIT ( Just in time ) , Kaizen , Six Sigma
etc for decision making, overall corporate is showing a greater sensitivity to moral and
social commitments and responsibilities.

Thus with a clear focus and a set of objectives in front of them corporates are drafting
policy documents for a cleaner, greener and more ethical way of work which today is the
call of society and government.

 CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR) refers to what business does over and above the
statutory requirement for the benefit of the society. This implies that companies must
behave and function as a responsible member of the society. The need is for some focus of
accountability on the part of the management which is not limited to shareholders alone.
The Company must accept its obligation to work for the larger benefit of the community.
The shareholders, the suppliers of resources, the consumers, the local community and
society at large are affected by the way an enterprise functions.

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Definition:

Lord Holmes and Richard Watt defined CSR in the World Business Council for Sustainable
Development as – “Corporate Social Responsibility is the continuing
commitment by business to behave ethically and contribute to
economic development by improving the quality of life of the
workforce and their families as well as of the total community
and society at large.”

 CORPORATE SOCIAL RESPONSIBILITY MODELS

There are some models that attempt to describe the evolution and extent of social
orientation of companies. Archie B. Caroll defines CSR as the entire range of obligations
business has to society, and has proposed a three dimensional conceptual model of corporate
performance. According to Caroll, a firm has the following four categories of obligations of
corporate performance.
 Economic
 Legal
 Ethical
 Discretionary

The firm being an economic entity has a primary responsibility of economic, i.e., efficient
in operations to satisfy economic needs of the society and generation of surplus for
rewarding the investors and for further development.

Legal responsibilities are also fundamental in nature because a company is bound to obey
the law of the land.

Ethical responsibilities are certain norms which the society expects the business to observe
though they are not mandated by law. For e.g, a company shall not resort to bribing or
unethical practices.

Discretionary responsibilities refer to the voluntary contribution of the business to the

social cause, like involvement in community development or other social programmes.

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Fig. 1 Caroll’s Model of Responsibilities of Business

 RESPONSIBILITIES TOWARDS DIFFERENT SECTIONS

 Responsibility Towards Shareholders: The responsibility of a company to its

shareholders, who are the owners, is indeed a primary one. The fact that the share holders
have taken a great risk in making investment in the business should be adequately
recognized.
To protect the interests of the shareholders and employees, the primary business of business
should be to stay in business. To safeguard the capital of the shareholders and to provide a
reasonable dividend, the company has to strengthen and consolidate its position. Hence it
should develop and improve its business and build up financial independence.
The shareholders are interested not only in the protection of their investment and the return
on it but also in the protection of the public image of the Company. It shall therefore be the
endeavor of the Company to ensure that its public image is such that the shareholders can
feel proud of their Company.

 Responsibility to Employees: The success of an organization depends to a very large

extent on the morale of the employees and their whole hearted cooperation. Employee
morale depends to a large extent on the discharge of the company’s responsibilities to them
and the employer-employee relationship. The responsibility of organization to its employees
includes:
1. The payment of fair wages.
2. The provision of the best possible working conditions.
3. The establishment of fair work standards and norms
4. The provision of labour welfare facilities to the extent possible and desirable
5. Arrangement of proper training and education to workers.
6. Reasonable chances and proper system for accomplishment and promotion.
7. Proper recognition, appreciation and encouragement of special skills and capabilities
of the workers.
8. The installation of an efficient grievance handling system
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 9. An opportunity for participating in managerial decisions to the extent desirable.
 Responsibility Towards Consumers: According to Peter Drucker, ‘there is only
one valid definition of business purpose; to create a customer’. Drucker observes that
“The customer is the foundation of a business and keeps it in existence”.

It has been widely recognized that customer satisfaction shall be the key to satisfying the
organizational goals. Important responsibilities of business to customers are:

1. To improve the efficiency of the functioning of the business so as to

a) Increase productivity and reduce prices
b) Improve quality
c) Smoothen the distribution system so as to make goods available.

2. To do research and development, to improve quality and introduce better and new
products.
3. ‘To make appropriate steps to remove imperfections in the distribution system,
including black marketing
4. To supply goods at reasonable prices even when there is a seller’s market
5. To provide the required after-sale services.
6. To ensure that the product supplied has no adverse effect on the consumers.
7. To provide sufficient information about the product, including their adverse effects,
risks and care to be taken while using the products.
8. To avoid misleading the customers by improper advertisements or otherwise
9. To provide an opportunity for being heard and to redress genuine grievances
10. To understand the needs of the customers and take necessary measures to satisfy
these needs.

 Responsibility Towards Community: A business has a lot of responsibility to the

community around its location and to the society at large. These responsibilities include:

1. Taking appropriate steps to prevent environmental pollution and to preserve the

ecological balance.
2. Rehabilitating the population displaced by the operation of the business if any.
3. Assisting in the overall development in the society.
4. Taking steps to conserve scarce resources and developing alternatives, wherever
possible
5. Contributing to research and development
6. Development of backward areas.
7. Making possible contribution to furthering social causes like the promotion of
education and population control.
8. Promotion of small scale and ancillary units.
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THE TATA GROUP: A LEGACY OF TRUST

The foundation of the Tata group of companies was laid by Jamshetji Nusserwanji Tata with
the establishment of a trading firm in 1868. Tata has ventured into businesses that were,
hitherto, considered beyond the capability of any Indian company, and has built businesses
that are still considered as industry bench marks many years after their establishment. Tata
is India’s largest and most diversified business conglomerate with more than 100 operating
companies spread across 85 countries in 6 different continents, employing 3.5 lakh people
and generating revenue of US $ 70.8 billion as of financial year 2009. The group’s global
business operation are spread over seven business sectors: communication and information
technology, engineering, materials, services, energy, consumer products and chemicals.
Tata Companies share five core values – integrity, understanding, excellence, unity and
responsibility. Adherence to ethics and excellence and the commitment towards serving
communities have been at the core of Tata’s unblemished growth and sustenance for over
140 years.
The national institutes of learning and research that Tata helped establish and still
continues to support are:
Indian Institute of Science
Tata Institute of Fundamental Research
Tata Institute of Social Sciences
Tata Memorial Centre
Tata Medical Centre
JRD Tata Eco-Technology Centre

The Tata Jagriti Yatra is an annual experiential train journey that seeks to awaken the
spirit of social and economic entrepreneurship in young adults.

Code of Honour is a special edition of Tata Review, which features the corporate
sustainability and community initiatives undertaken by Tata and Tata Trusts.

Arguments For and Against Social Responsibility of Business

While there is a lot of appreciation of the idea of social responsibility of business, there are
also people who argue that social involvement of business has certain negative aspects:

Arguments in Favour of Social Responsibility:

1. Business which survives using the resources of the society has a responsibility to the
society.
2. Business which is an integral part of the social system has to care for the various
needs of the society.
3. Business which is resourceful has a special responsibility to the society.

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 4. Social involvement of business would foster a harmonious and healthy relationship
between the society and business and to the mutual benefit of both.
5. Social responsibilities like recycling of waste may have favourable environmental as
well as financial effects.
6. Social involvement may create a better public image for the company which may
help in attracting customers, efficient personnel and investors.

Arguments Against Social Responsibility of Business:

1. Business should confine to its own business. There are government and social
organizations to carry out social activities.
2. Involvement in social activities could adversely affect the economic health of a
business enterprise. Sometimes expenditures on social welfare impose severe burden
on the Company.
3. If the cost of the social involvement of business is ultimately passed on the
consumers, there is no point in exalting the social involvement of business.
4. Many Companies involve themselves in social activities because of the tax
exemptions on the income spent on special social purposes.
5. If the social involvement of a business enterprise causes an increase in the price of
the product, it could affect its competitiveness both in the domestic and international
markets.
6. Social involvement of business could lead to an increase in the dominance or
influence of business over the society.

CONSUMER RIGHTS, CONSUMER PROTECTION, CONSUMERISM

An important socio-political environment confronting business is the growth of

consumerism and the legislative measures to protect the consumers. Professor John F.
Kennedy has recognized that consumers are the largest economic group in the country’s
economy, affecting and affected by every public and private economic decision. But they
were also the only important group who were not effectively organized, whose views were
not heard.

 CONSUMER RIGHTS

To safe guard the interest of consumers is the need of the day as they are the king of the
market. So, under Section 6 of Consumer Protection Act, 1986, Govt. provided following
rights to consumers.
(1) Right to Safety: It is the right to safety against such goods and services as are
hazardous to life, health and property to the consumer. Consumer has the right to
safety against loss caused by such product.

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 (2) Right to be Informed: Consumer has also the right that he should be provided all
those information on the basis of which he decides to buy a product. These
information related to quality, purity, quantity, standard, date of manufacture and
date of expiry of the product.
(3) Right to Choose: Consumer has the full right to buy any product of his choice from
among the different products available in the market. In other words, no seller can
influence his choice in an unfair manner.
(4) Right to be Heard: Consumer has the right that his complaints be heard. Under this
right the consumer can file complaint against all those things which are prejudicial
to his interest. Several large organizations have set-up consumer service cell with a
view to providing the right to be heard to the consumer.
(5) Right to Seek Redressal: This right provides compensation to consumer against
unfair trade practice of the seller. Several redressal are available to the consumer by
way of compensation, free repair of the product for certain fixed time period.
Replacement of the product, taking back of the product by the seller.
(6) Right to Consumer Education: Consumers must be aware of the rights they enjoy
against the loss they suffer on account of any product purchased by them.
Government has taken several measures to educate the consumers. For instance
Government publishes a quarterly magazine under the title “UPBHOKTA
JAGRAN”.

CONSUMER PROTECTION:

Meaning:
To protect the consumer against the unfair practices of the producers and sellers is called
consumer protection.
For effective consumer protection a practical response on the part of 3 party is essential.
(1) Producer: The businessmen comprising the producers and all the elements at the
distribution channel has to pay due regard to consumer rights. The producer has an
inescapable responsibility to ensure efficiency in production and the quality of output. He
should also resist the temptation to charge exorbitant prices in a seller’s market. Many a
times hoarding and black marketing are practiced which affect the consumers. Hence a
socially responsible producer should see to it that whatever is produced should reach the
ultimate consumer in time and at reasonable price. Consumerism is in fact regarded as an
opportunity for many consumer oriented businessmen.
(2) Government: The Government has to come to rescue of the helpless consumers to
prevent him from being misled, cheated and exploited. The Government role in consumer
protection is vital and final expression through policy making, legislation and development
of institutional capacity for its enforcement. For e.g., Government needs to establish assist
in the creation of adequate storage and distribution and retail facilities for essential goods
and services. Government should adopt and encourage appropriate safety regulations,
national or internal, to ensure that they are safe for the intended use.

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Further, Government should establish and maintain legal and administrative measures to
enable consumers or organizations to obtain redressal through formal or informal
procedures that are fair, inexpensive and accessible. In this connection Central and State
Government passed many acts from time to time.
(1) Drugs & cosmetic Act (1940)
(2) Prevention of food adulteration Act (1954)
(3) Essential commodities Act (1955)
(4) Monopolies and restrictive trade practices Act (1969)
(5) Standard of weights & measures Act (1976)
(6) Consumer protection Act (1986)

(3) Consumers: Consumers should accept consumerism as a means of asserting and

enjoying their rights. Consumerism should succeed in making business and the Government
more responsible to the rights of consumers.

CONSUMERISM:

Gandhiji had rightly said “A customer is the most important visitor on our premises. He is
not dependent on us. We are dependent on him. He is not interruption in our work – he is
the purpose of it. We are not doing him a favour by serving him. He is doing us a favour by
giving us the opportunity to serve him.”

Meaning: Consumerism is interpreted as a collective endeavor or efforts of consumer to

protect their interests, is a manifestation of the failure of the business, including that of the
public sector and the Government to guarantee and ensure legitimate right of the consumers.

Definitions:

(1) Philip Kotler: “Consumerism is a social movement seeking to augment the rights and
powers of the buyers in relation to sellers.”
(2) Boyd & Allen: “Consumerism may be best defined as the dedication of those activities
of both public and private organization which are designed to protect individual from
practices that impinge upon their rights as consumers.”

Utility of Consumerism: Well-organized and dynamic consumerism may be expected to

produce the following result.
(i) When consumers are strong enough to protect their right the businessman
will be compelled to stop unfair practices.
(ii) Consumerism provides feed-back to the business and enables the producers
to understand consumer’s grievances (complaint), needs and wants.
(iii) Consumerism will make the Government more responsive to consumer
interest; prompt it to take necessary and statutory measures to safe guard consumer
rights.

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 Important roles to play by consumer organizations:

(a) Consumer Education: Consumers are given information about various consumer
goods and services. This relates to price what consumer can expect, standard trade
practices etc. Consumers are made aware of their rights and responsibilities and also
the ways of getting the grievances redressed.
(b) Product Rating: In order to guide the consumer in his choice of products, some of
the agencies like Consumer Education and Research Centre (CERC), Ahmedabad
carry out tests, and prepare reports on these tests.

(c) Liaison with Government and Producers: Consumer organization has to maintain
co-operative relationship with producer as well as Government. As Government has
key role in protecting consumers rights, the consumer organization play an
important role to see that Government plays its role.

CONSUMER PROTECTION ACT, 1986: The objective of this act is to provide better
protection of the interest of consumers and for that purpose to make provisions for the
establishment of consumer councils and authorities for the settlement of consumer dispute
and for matters connected there with.

(a) Consumer Protection Council: The act provides for the establishment of the
Central Consumer Protection Council by the Central Government and a State
Consumer Protection Council in each state by the respective State Government.

 The Central Council Shall consist of the Minister in charge of consumer affairs
in the Central Government, who shall be its chairman and some other official
and non-official members also. The Council shall meet as and when necessary
but at least one meeting of the Council shall be held every year.
 The State Council shall consist of such members as may be specified by the
State Government by notification from time to time.

(b) Consumer disputes redressal agencies: The consumer protection act provides for a
3 tier consumer disputes redressal system.

(i) At district level / District Forum: District forum hears disputes involving a
sum of less than Rs.5 Lakh. It consist of

(A) A person, who is qualified to be District Judge nominated by the State

Government shall be its President.
(B) A person is specialized and has eminence in the field of n trade or commerce.
(C) A lady social worker.

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 (ii) State Forum: State Forum hears dispute from Rs.5 Lakh to Rs.20 Lakh. It
consists of

(A) A person, who is or has been a judge of a High Court appointed by the
State Government, shall be its President.
(B) Two other members who shall be persons of ability, integrity and have
adequate knowledge/experience in dealing with problems related to
economics, law, commerce, accountancy one of whom shall be a woman.
(iii) National Forum: This commission hears disputes involving a sum exceeding
Rs. 20 Lakh. It shall consists of

(A) A person who is or has been a judge Supreme Court appointed by

Central Government.

(B) Two other persons who have adequate knowledge and experience in the
field of trade and commerce.

(c) Remedial Actions: If any redressal agency is satisfied that the complaint is genuine then
it shall issue an order to the opposite party directing him to take one or more of the
following actions:
(i) To remove the defect pointed out.
(ii) To replace the goods with new goods of similar description this shall be free
from all defects.
(iii) To pay such amount as may be declared as compensation to the consumer for
any loss suffered by the consumer.
(iv) To discontinue the unfair trade practices.
(v) Not to offer the hazardous goods for sale.
(vi) To withdraw the hazardous goods from market.

(d) Penalties: If a trader or producer against whom a complaint is lodged is found guilty, he
shall be punished with imprisonment for any term not exceeding 3 years. In case of punitive
damages, the penalty may be equivalent to the loss of revenue in service or the value of the
product which ever is higher as well as the interest and fine not exceeding Rs. 10,000.

Conclusion: The Consumer Protection Act 1986 which was modified by the Amendment
Act of 1993 is a very important means to protect the consumer rights. One redeeming
feature of this act is that it applies not only to private sector but also to the public sector and
Government agencies. In fact, the Act envisages a simple, inexpensive and speedy redressal
of consumer grievances related to defective good, deficient services and unfair and
restrictive trade practices. But taking recourse to the law is sometimes affected by the lack
of consumer awareness and education.

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WHAT IS WOMEN EMPOWERMENT?

Self-decision regarding education, participation, mobility, economic independency, public speaking,

awareness and exercise of rights, political participation and many more factors ensure women
empowerment. In short women empowerment is the breaking of personal limitation for the Women
at an individual, cultural, social and political level across the world so as to ensure over all well
being of society.

SIGNIFICANCE: Women bear almost all responsibility for meeting basic needs of the family, yet
are systematically denied the resources, information and freedom of action they need to fulfill this
responsibility.
The vast majority of the world's poor are women. Two-thirds of the world's illiterates are female. Of
the millions of school age children not in school, the majority are girls. And today, HIV/AIDS is
rapidly becoming a woman's disease. In several southern African countries, more than three-quarters
of all young people living with HIV are women.
The current world food price crisis is having a severe impact on women. Around the world, millions
of people eat two or three times a day, but a significant percentage of women eat only once. And,
now, many women are denying themselves even that one meal to ensure that their children are fed.
These women are already suffering the effects of even more severe malnutrition, which inevitably
will be their children's fate as well. The impact of this crisis will be with us for many years.
The three fundamental factors recognized by UNO for the empowerment of women world wide
are;
RIGHT TO EDUCATION: In India Literacy rates among women are comparable to the poorest in
the world. It has been proven in various societies that education helps all including women to
broaden their scopes and horizons. It enables and equips them to support their families and to guide
them better in today’s fast changing environment.
In India Free Primary education for all and free Secondary education for girls has been in practice
for decades. However due to social and economic compulsions it has been observed that more often
than not preference is given to the male child over the female child in terms of getting education .
Under Non-Formal Education programme (NFE), about 40% of the centers in states and 10% of the
centers in UTs are exclusively reserved for females.[citation needed] As of 2000, about 0.3 million
NFE centers were catering to about 7.42 million children, out of which about 0.12 million were
exclusively for girls.[citation needed] In urban India, girls are nearly at par with the boys in terms of
education. However, in rural India girls continue to be less educated than the boys.

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According to a 1998 report by U.S. Department of Commerce, the chief barrier to female education
in India are inadequate school facilities (such as sanitary facilities), shortage of female teachers and
gender bias in curriculum (majority of the female characters being depicted as weak and helpless).
[37]
The government by making the RIGHT to EDUCATION a fundamental right has taken a step in the
positive direction towards ensuring basic education for all, especially the women.

WORKFORCE PARTICIPATION: UNO has suggested better and stronger participation of

women in the workforce.
This helps to;
- Empower women.
- Makes the work place more balanced and dynamic.
- Improves status of women in society consequently benefiting society.
Contrary to the common perception, a large percent of women in India work. The National data
collection agencies accept the fact that there is a serious under-estimation of women's contribution
as workers. However, there are far fewer women in the paid workforce than there are men. In urban
India Women have impressive number in the workforce. As an example at software industry 30% of
the workforce is female. They are at par with their male counter parts in terms of wages, position at
the work place.
In rural India, agriculture and allied industrial sectors employ as much as 89.5% of the total female
labour in overall farm production; women's average contribution is estimated at 55% to 66% of the
total labour. According to a 1991 World Bank report, women accounted for 94% of total
employment in dairy production in India. Women constitute 51% of the total employed in forest-
based small-scale enterprises.
One of the most famous female business success stories is the Shri Mahila Griha Udyog Lijjat
Papad. In 2006, Kiran Mazumdar-Shaw, who started Biocon - one of India's first biotech companies,
was rated India's richest woman. Lalita Gupte and Kalpana Morparia (both were the only
businesswomen in India who made the list of the Forbes World's Most Powerful Women), run
India's second-largest bank, ICICI Bank.

LAND & PROPERTY RIGHTS: In most Indian families, women do not own any property in their
own names, and do not get a share of parental property. Due to weak enforcement of laws protecting

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them, women continue to have little access to land and property. In fact, some of the laws
discriminate against women, when it comes to land and property rights.
The Hindu personal laws of mid-1956s (applied to Hindus, Buddhists, Sikhs and Jains) gave women
rights to inheritance. However, the sons had an independent share in the ancestral property, while the
daughters' shares were based on the share received by their father. Hence, a father could effectively
disinherit a daughter by renouncing his share of the ancestral property, but the son will continue to
have a share in his own right. Additionally, married daughters, even those facing marital harassment,
had no residential rights in the ancestral home. After amendment of Hindu laws in 2005, now
women in have been provided the same status as that of men.
In 1986, the Supreme Court of India ruled that Shah Bano, an old divorced Muslim woman was
eligible for maintenance money. However, the decision was vociferously opposed by fundamentalist
Muslim leaders, who alleged that the court was interfering in their personal law. The Union
Government subsequently passed the Muslim Women's (Protection of Rights Upon Divorce) Act.
Similarly, the Christian women have struggled over years for equal rights of divorce and succession.
In 1994, all the churches, jointly with women's organisations, drew up a draft law called the
Christian Marriage and Matrimonial Causes Bill. However, the government has still not amended
the relevant laws.
Right to Property and land is very critical for the woman to establish her credentials as an equal
partner in society. It would give her financial and Emotional Security creating a more healthy and
able body and mind to nurture society.

WOMEN EMPOWERMENT AND FEMINISM IN THE INDIAN CONTEXT

India has a rich and very ancient heritage and culture. During the time of the Vedas, it is firmly
believed that society was gender neutral and educated women stood shoulder to shoulder with the
men in running the household and administration.
They administered the house and took over all domestic responsibilities whereas the men using their
knowledge and skill would take over all external duties. This had nothing to do with gender bias or
discrimination but it was purely an attempt at a practical way of dividing the work which went into
smooth functioning of family and society as a whole.
Then came the invasions of the Mughals, followed by barbaric invasions of our northern and
western regions by the Pathans and the Mongols.
At that time women equality took a backseat and the seeds for a male dominated or male-controlled
system were sown. Completely revolting social customs like Child marriage, Sati and the Devdasi

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culture took their root round about the 13 th and 14th century. A large contribution to this was also
because of the birth of the Caste system in India where the Brahmins were at the top and given a
free hand to interpret and run our society to suit individual preferences and massage their own egos.
Traditionally it came to be accepted that women were now the weaker sex and they needed to be
protected. In the name of protection their were restrictions on movement , freedom to education and
so on till the woman became a mere follower of first the Father / Brother , then the Husband and
finally the Son .
All this lead to a deeply repressive society leading to digression of the overall social fabric.
However even at this time we have valiant Examples of Women like;
- Razia Sultan – Only women Emperor of Delhi
- Jijabai – Shivaji’s mother who was also his guardian and guide.
- Durgavati ruler of Gond.
- Rani Laxmibai
- Nur Jehan , wife of Emperor Jahangir and the woman behind his power
And many such exceptions.
Then came the Women’s’ Emancipation movement lead by Jyotiba Phule, Ram Mohan Roy and
such others. Under this women’s Education, abolishing of Child marriage and a thrust to Widow re
marriage was given to uplift the status of the Women in Society.
The freedom struggle gave birth to a list of visionary women freedom Fighters like Annie Besant,
Sarojini Devi Naidu, Vijaylakhsmi Pandit and so on.
Today we have a lady as the President of India. We have had well educated and courageous ladies
occupying each post within the Administration right from the Collector level to the top bureaucracy
to the Prime minister and now even the President.
But will this background can we say that Women in India today are free and empowered.
Over the past few months we have seen a lot of Khap Panchayats ruling against inter caste
marriages and encouraging The Honour killings .
We still have the one of the highest Female Mortality Rates in the world .Reason as mentioned
below is self explanatory ;
The exceptions include China and India, the most populous countries with a solid record of
tampering with the sex ratio at birth. In both countries, not only are fewer females being born – by
decree of the one-child policy in China and by male preference choice in India – but surviving
female babies are often abandoned or left to die, especially if food is scarce and families cannot feed

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all their children. Even anecdotal evidence bears this out. For example, visitors to Mother Teresa’s
orphanages in Calcutta note the presence of more females than males.
Even today as we speak lakhs of girls are being denied education as the preference is given to the
male child . This despite the fact that we have defined Right To Education as a fundamental right .
Even today in the 21st Century there is a tendency among majority to look down upon the abilities of
the women .

Today when we have corporate leaders like Indra Nooyi , Chanda Kocchar , Kiron Mazumdar Shaw
, to name just a few , We also have a Jessica ,we also have numerous young girls across the length
and breadth of India falling victims to Honour Killings ….
In India there is clearly a social and Cultural Divide . The problem lies not in the Individual but in
the Collective mindset of Society which finds it Convenient to Restrain the creativity and ability of
the Indian female . One obvious reason is that the Male ego gets threatened both at the conscious
and subconscious level .
For generations we have become attuned to the fact that women have to lead a deprived life and
have to toe the male line .
This may not be true for an elite few , but when we talk of the Great Indian Middle class which
comprises of the masses then glaring mortality figures , dowry deaths and honour killings belie the
fact that we are an Equal society .
True woman’s empowerment would come only then when an Individual girl is born healthy and
happy and then on in life she has the freedom to make her CHOICES .
The choice to educate herself , the choice to work, the freedom to choose her life partner and so
many other countless choices which the males in society takes so much for granted.

DISCLAIMER:
This study material is prepared by Dr. Shuvasri Das. The basic objective of this material is
to supplement teaching and discussion in the classroom in the subject. Students are required
to go for extra reading in the subject through Library work.

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