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How does socio-cultural environment affects business decisions-making? Give a brief sketch of the nature of socio-cultural environment prevailing in India.

 The social environment consists of the sum total of a society's beliefs, customs, practices and behaviors. It is, to a large extent, an artificial construct that can be contrasted with the natural environment in which we live.

Every society constructs its own social environment. Some of the customs, beliefs, practices and behaviors are similar across cultures, and some are not. For example, an American traveling to Britain will find many familiar practices but not so much if traveling to China.

This social environment created by a society-at-large in which a business functions can be referred to as its external social environment. If a business operates in a multicultural society, then the social external social environment is even more complicated because the environment will consist of diverse sub-populations with their own unique values, beliefs, and customs.

A business also has its own social environment. We can refer to this as its internal social environment, which is simply the customs, beliefs, practices, and behaviors within the confines of the business. A business has much more control over its internal social environment than it does with its external social environment.

Effects of External Social Environment

A business must utilize and adapt to its external social environment, or it will not survive. A business must be keenly aware of the society's social preferences regarding its needs and wants. These preferences and needs and wants will be influenced by a population's values, beliefs, and practices.  

Let's look at some examples. A change in beliefs and values towards energy conservation and global climate change may create a change in consumer preference away from gas guzzling SUVs to hybrid sedans. Some cultures treat the meal as a long social event, and fast food just won't cut it. Social preferences relating to fashion are constantly changing. Skirt lengths go up and down depending upon the years, as do the preference for single-breasted and double-breasted suits.

If a business refuses to adapt to changing social preferences, its sales will drop, and it will fail. Of course, sometimes the change in social preferences may be so large that a business simply can't adapt. For example, a social movement led to the outlawing of alcohol in the early 20th century, which was known as Prohibition. During Prohibition, it was illegal to sell alcohol. Distilleries were put out of business until Prohibition was repealed.

While there are risks with social change, there are also opportunities. Businesses often try to influence social values through the use of marketing, advertising and targeted public relations strategies. Marketing campaigns are used in an attempt to create trends. The fashion industry is a prime example. Public relation campaigns are often used to build up or repair a business' image. 

For example, BP launched a massive public relations campaign to improve its image after a massive oil leak in the Gulf of Mexico caused by offshore drilling. Fast food restaurants may include healthier choices on their menus and sponsor health-related activities. 

Broader social values will also affect the success of a business. A society that values higher education will provide a better workforce that will lead to more productivity and innovation. Likewise, a society that supports investment in public infrastructure will have access to good transportation and communication systems. And if the social values of a community include a hard work ethic, a business will have access to productive workers and a population that has money to spend on goods and services.

Internal Social Environment

A business also creates a social environment consisting of its own organizational values, norms, customs and practices. Many of these values, norms, and beliefs will mirror the external social environment, but some will be unique to the organization.  

Businesses need to operate as a cohesive unit, so it's important that they build a strong and productive organizational culture. It's also important to ensure that the culture is stable and positive. Thus, a business should carefully monitor the relations between its members to detect any hostility or other dysfunction that needs to be corrected.

Social denotes structural aspects i.e. it emphasizes on the nature of patterned interaction actually obtaining within and among various types of groups that exist in society. Some examples of such group being family, caste, economic organisation and distribution of power and dominance.

Cultural aspects denote the collectively shared values, ideas and symbols that are associated with these groups and the pattern of social interactions existing therein. Some of the example being the value of inequality or hierarchy conveyed through the idea of purity-pollution, the idea of unity or holism meaning that different parts are united in one body, social. The fatalistic belief in the ideas of rebirth and various themes conveyed through literature of different periods.

Socio-cultural dynamics is a universal process. All societies at all time are subject to this process of change. At the same time, it is a highly complex phenomena. To facilitate understanding, the change in the above mentioned aspect can be further divided into two categories. The criterion being, where the forces bringing above change are located. 

The change may be termed Endogenous (Or-thogenetic), if the force enables from within the social structure, for example, rise of Buddism. Alternatively they may be termed Exogenous (Heterogenetic) if they have resulted due to forces impinging on society from without e.g. Changes due to Islamic conquest are an example of it. 

Socio-cultural dynamics:

Indian society, being no exception, has also been subject to this complex process. Subsequent discussion on socio cultural dynamics in Indian society shall focus on two aspects (A) what has been the context of change (B) How these change came about.  

(A) Taking Aryan society of the Vedic times as a point of departure, we can have an overview of these changes in demographic, familial, stratificational, economic and political spheres. They constitute various sub structure of Indian society. Thus these change are to be termed as structural changes. They have been both endogenous and exogenous in nature.

1. Demography: Indian society has been continuously subjects to demographic change both due to influx of foreigners as well as due to the internal growth of the population. Aryans themselves being outsiders were followed by other settlers like Greeks, Saka, Kushan, Huns. Arbs, Turksi Mangols and Afthans. Finally came the British initially as merchant and traders but later stayed as colonial rulers. Although numerically they constituted an insignificant minority but their presence had far reaching consequences. Mere influx of population is not a structural change, but it has structured consequences. Firstly, such influx involved frequent wars which brought about change at social and political levels. Secondly assimilation of these groups in Indian society led to transformation of the simplistic Varna based stratification system.

2. Stratification: The earlier occupation based hierarchy of Varnas gave way to highly complex hierarchy of Jatis. In this hierarchy Brahmins were at the top and untouchables were at the bottom of the ritual hierarchy. Hereditary nature of Jati membership rendered the hierarchy very rigid permitting only limited mobility. This has been an important reason for the conversion of low ranking Jati to more egalitarian religions like Buddism, Islam and Chrisistianity. Traditionally these Jatis have been performing multiple functions. They acted as occupational interest groups as well as extended kin groups. However in the post British period, there had been considerable changes in their functions due to modernization.

3. Family: Not much is known about the nature of family system in early Vedic period but definitely towards the later Vedic period, joint family system had come to be established. It constituted the basic household unit of the village community. Joint family constituted a world by itself and performed numerous functions viz, economic, religious, educational recreational etc. There exists a consensus among sociologists that the above mentioned attributes of joint family remained more or less unchanged till quite recent times. Only of late the joint family in India has started to disintegrate and the nuclear households are proliferating. Even some tendency towards nuclearity is also to be witnessed.

4. Economy: Indian society during early Vedic time had a semi-nomadic or pastoral type of economy. Towards the later Vedic times, settled agricultural communities come into existence. During the post-Vedic period with the availability of agricultural surplus, trade and commerce developed under the regulation of guilds. The guilds not only helped in promotion of trade and craft but also exercised control through guild’s laws and even interfered in the personal lives of guild member. Later overseas trade developed and trade contact were established with the Romans and with Central and North-East Asia. However, with the decline of the Gupta dynasty, trade and commerce also declined only to be revived during Mugal times. 

This was the period when numerous crafts developed to meet the luxury and military needs of the ruling class. Finally, under the British rule, a new transformation came about in the Indian economy. It was reduced primarily to a producer of raw material and was rendered a mere colonial appendage to the British economy. For the first time, India was exposed to the forces of modernization. During this contact, Indian economy did undergo moderenising change, though to a limited extent and in an uneven manner. Only after independence, a deliberate and sustained efforts has been made to develop modern nationat economy.

5. Polity: The early Aryan polity consisted of the king guided by the tribal council. It was during the Mauryan period that strong and paternalistic monopoly developed, which under Ashoka’s rule acquired even-some totalitarian character. Subsequently, the power of the king declined and centrifugal tendencies developed. This trend continued till the beginning of the Muslims rule. However, at no time was the king an absolutist monarch. He was to be guided by Dharma and interpreted by the Brahmin priest.

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