1. Social and cultural environment in India 2. Business participation in social and cultural affairs. 3. Political and legal environment in India 4. Indian constitution - fundamental rights and directive principles and their influences on Indian business. 5. Centre-state relationships

1. 1. Social and cultural environment in India
2. Business participation in social and cultural
affairs.
3. Political and legal environment in India
4. Indian constitution - fundamental rights
and directive principles and their influences
on Indian business.
5. Centre-state relationships
By Group 11:
Siddharth Khanna
Shrikant Parmar
Shivam Lovewanshi
MAM-602
Business Environment,
Development & Policy

2. Social & Cultural Environment
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 Social environment of business means all factors which affects business socially.
 Every business works in a society, so different factors like family, educational
institutions and religion affects business .
 It includes the society that the individual was educated or lives in, and the
people with whom they interact with.
 The cultural environment mean an environment which affects the basic values,
behaviors, and preferences of the society-all of which influence consumer
marketing decisions.
 The cultural factors like buying and consumption habit of the people, customs
and traditions, tastes and preferences, languages etc. are the factors that affect
the strategy of the business.
 International companies often include an examination of the socio-cultural
environment prior to entering their target markets.

3. 3
In a country like India personal decision of buying and selling of goods are affected by family
he/she is born in.
-In the culture of a family , it may happen that parent does not allow to use any product , then sale
of such product will decrease. So, businessman must analyze different families needs.
-Many occasion of family like marriage of any family member , can increase the demand of goods.
-They provide good knowledge, education, awareness, thinking, what should
students buy or not to buy.
-Suppose if a student is habitual to drink tea and if his teacher advice him that this
is harmful to his health after their guidance students can avoid to drink tea after this
the sale of tea may decrease.
-Different religions have different principles , rules and regulations in which they
may or may not eat or use some product.
-In Hindu religion, they never use leather products . This affects the sale of leather
industries.
Effect on Business by Main elements Of Societies

4. A Company which Got Benefit Due to Social Environment
Strategy of McDonalds in India, which gave them Benefit of Social
Environment of India :
 McDonalds Made its segment according to Demographic Factor in
the Society of India being Affordable & a Convenience Food.
 They don’t use beef and pork and introduced their first vegetarian
menu in the world keeping in mind the religious factors of India.
 McDonald’s always focused in providing Standardized product &
Glamour, So that They Can Fulfill the psychological Needs of Society.
 McDonald’s ads Influence whole Family to have food in their
Restaurant keeping in mind the family culture of India.
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5. Business participation in Social &
Cultural affairs.
Why Social Affairs? A business
being a part of the ecological
system or the environment
cannot forego it responsibilities
towards the society. Today, the
whole society is a business’s
environment.
Why Cultural Affairs? A
company setting out to do
business in an unfamiliar cultural
environment may encounter
several problems if proper
homework is not done.
Why shouldn’t ? Business is an
independent entity, and it
should stick to its business or
economic duties. Social activities
should be carried out by
government and social
organizations as it’s their duty.
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6. 6
How should a business participate?
1. Ackerman’s
Model
Phase I : Top managers
recognizing a social
problem.
Phase II : An intensive
study of the problem and
hiring experts to find out
its solution.
Phase III : Implementation
of the proposed solutions.
2. The Halal’s
Model
A firm can only attempt to unite the
diverse interests of various social
groups to a certain economic level.
Beyond a certain level of economic
activity, the social issues at stake may
become conflicting.
No Corporate social posture will be
value free.
3. Carroll’s Model

7. Corporate Social Responsibility
Source: Swiss Learning Exchange
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8. Sir HN Reliance
Foundation and
Research Centre by
Reliance Industries
Limited
The National
Cancer Institute by
ONGC LTD.
Maternal &
Newborn Survival
Initiative (MANSI) by
Tata Steel Limited
SOME NOTABLE CSR PROJECTS
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9. Political And Legal
Environment in India

10. Political
Environment
 The political environment consists of factors related to
management of public affairs and their impact on the
business of an organization.
 India is a democratic country having a stable political
system where the political government plays an active
role.
 A political system serves as primary factor for economic
development; assures security to citizens and business
organization.
 Political environment impacts company’s international
operating activities.
 Product climate affects marketability of the product
,inflow of investment and valuation of share price.
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11. Legal environment
 Legal environment refers to the legal system
obtaining in a country.
 The legal system than refers to the rules &laws that
regulate behavior of individuals &organizations.
 Failure to comply with the laws means that
penalties will be inflicted by the courts depending
on the seriousness of the offence.
 The legal system of a country is of immense
importance to inter –national business.
 A country‘s laws regulate business practice.
This Photo by Unknown Author is licensed under CC BY-SA

12. Centre-State Relationships
LEGISLATIVE
RELATIONS
ADMINISTRATIVE
RELATIONS
FINANCIAL
RELATIONS
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13. Legislative Relations
Articles 245 to 255 in Part XI deals with different aspects of legislative relations between centre and
states. These include:
1. Territorial jurisdiction of laws made by the Parliament and by the Legislatures of States.
2. Distribution of legislative subjects
3. Power of parliament to legislate with respect to a matter in the State List
4. Centre's control state legislation
However, Seventh Schedule of the Constitution provides for the distribution of legislative powers between
the centre and the states. The legislative subjects are divided into List I (the Union List), List II (the
Concurrent List) and List III (the State List). 13

14. Administrative Relations
Cooperation Between the Centre and the States
The constitution lays down various provisions to secure cooperation and
coordination between the centre and the states. These include:
I. Article 261 : "Full faith and credit shall be given throughout the territory of
India to public acts, records and judicial proceedings of the Union and of
every State".
II. Article 262: the parliament may by law provide for the adjudication of any
dispute or complaint with respect to the use, distribution or control of the
waters of, or in, any inter-State river or river valley.
III. Article 263 empowers the President to establish an inter-State Council to
inquire into and advise upon disputes between states, to investigate and
discuss subjects in which some or all of the States, or the Union and one or
more of the States, have a common interest.
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15. Financial relations
The constitution deals with financial relationship
under article 268-293 of part XII.
Allocation of taxing powers
 The Constitution has provided the union
government and the state governments with
the independent sources of revenue in
following way:
 The parliament has exclusive power to levy
taxes on the subjects mentioned in the Union
List.
 The state legislatures has exclusive power to
levy taxes on the subjects mentioned in the
state list.
 Both the parliament and the state legislature
are empowered to levy taxes on the subjects
mentioned in the Concurrent List.
 The parliament has exclusive power to levy
taxes on the matters related to the residuary
subjects. 15

16. Indian Constitution
Fundamental Rights And Directive
Principles And Their Influence On
Indian Business
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17. NATURE OF
FUNDAMENTAL
RIGHTS
Enshrined in the
part III of the
constitution and
safeguarded by
the State
Fundamental
rights are equal
for all.
Rights are
justiciable –
Article 32
Fundamental
rights are not
absolute.
They can be
suspended
during
emergency.
Parliament can
amend
Fundamental
rights
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18. Fundamental
Rights
Right to
constitutiona
l remedies
(Article 32-35)
Cultural and
Educational
rights
(Article 29-31)
Right to
freedom of
religion
(Article 25-28)
Right against
exploitation
(Article 23,24)
Right to
freedom
(Article 19-
22)
Right to
equality
(Article 14-
18)
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19. Directive Principles in India
 The Directive Principles of State Policy are guidelines or principles given to the central and state
governments of India, to be kept in mind while framing laws and policies.
Directive Principles of State Policy
Socialist Principles
Articles
38,39,39A,41,42,
43,43A,47
Gandhian Principles
Article
40,43,43B,46,
47,48
Liberal Principles
Articles
44,45,48,48A,
49,50,51
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20. Socialistic Priniciples
Aim to democratic socialistic state & socio-economic justice
1. Art 38
To minimize inequalities in income, status, facilities &
opportunities.
2. Art 39
Adequate means of livelihood, equitable distribution of material
resources, prevention of concentration of wealth & means of
production, equal pay, preservation of health &strength of workers &
children against forcible abuse, opportunities for healthy
development of children.
3. Art 39 A
Equal justice & free legal aid.
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21. Gandhian Principles –
Programme of
Reconstruction
Art. 40: organization of village panchayats
Art. 43: promotion of cottage industries in rural areas
by individual/cooperation
Art. 43B: cooperative societies
 Voluntary formation
 Autonomous functioning
 Democratic control
 Professional management
Art. 46: promotion of educational & economic
interests of SCs, STs & other weaker sections and
protect them from social injustice & exploitation
Art. 47: prohibit the consumption of intoxicating drinks
& drugs
Art. 48: prohibition of slaughter of cows, calves and
other milch & draught animal and to improve their
breeds
This Photo by Unknown Author is licensed under CC BY
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22. Liberal Intellectual Principles
 Art. 44 –for all citizens uniform civil code
 Art. 45 –early childhood care and education for all
children
 Art. 48 -Agriculture and animal husbandry on
scientific lines
 Art. 48A –Environment protection
 Art. 49 –nationally important monument protection
 Art. 50 –separation of judiciary from executive
 Art. 51 –promotion of international peace & security
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23. Fundamental Rights Vs Directive Principles
Fundamental Rights Directive Principles
Negative. Prohibit state to do something Positive. Require state to do something
Justiciable i.e. legally enforceable, if they are
violated
Non- justiciable i.e. non legally enforceable, if
they are violated
Objective: establishing political democracy Objective: Establishing socio economic democracy
Legal sanctions. No need of legislation for
implementation
Moral and political sanctions. Need of legislation
for implementation
Any law in violation of FR; Scis bound to declare it
null and void
No such binding
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24. Influence of FR and DPSP on Indian businesses
Wildlife first
and others vs
MOEF and
others
Indibility
Creative Pvt.
ltd. And others
vs Govt. Of
West Bengal
and others
Indian Hotel
and Restaurant
Association
(AHAR) vs
State of
Maharashtra
Tata Nano case
in West Bengal
(Singur
controversy)I
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25. THANK YOU
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