What are the Forces Shaping Business and Society Relationship

What are the Forces Shaping Business and Society Relationships important for your Business?

Welcome to our blog post on “Forces Shaping Business and Society Relationship.” In this discussion, we will explore the dynamic interplay between businesses and society, and examine the various factors that influence their relationship. Whether you are a business professional, a social advocate, or simply curious about the evolving dynamics of corporate responsibility, this article aims to provide insights into the forces shaping the interaction between business entities and the broader society. Join us as we examine the economic, social, environmental, and technological forces that drive this relationship, and explore their implications for both businesses and society. Let’s embark on a journey to understand the complex and ever-changing landscape of the business-society relationship.

Forces Shaping Business and Society Relationship

Businesses have various stakeholders, such as communities, customers, suppliers, employees, government, competitors, media, and interest groups like environmentalists. These stakeholders represent different segments of society and interact with businesses in different ways. However, businesses and their stakeholders do not operate in isolation. They are impacted by various factors such as social values and beliefs, political risks like strikes, economic factors like purchasing power, and many others. These factors can bring opportunities as well as threats. Even small businesses serving local markets are affected by such forces. Figure 1.2 illustrates some of the significant forces that shape the relationship between business and society.

Business and Society Relationship are:

  1. Changing Societal Expectations
  2. Changing Work, Workplace, and Work Styles
  3. Growing Emphasis on Ethical Values
  4. Sustainable Development Concerns
  5. Globalization
  6. Evolving Government Regulations & Business Response
  7. Increased Competition

Read More: Difference Between Administration and Management

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Forces Shaping Business and Society
Forces Shaping Business and Society Relationship

1)Changing Societal Expectations

Society’s expectations of businesses have evolved. In the 19th century, business was purely focused on economic activities and concerns. In the early 20th century, businesses were expected to give back to society after making a profit. However, today’s businesses are expected to balance economic, social, and environmental responsibilities. It’s not just a matter of ‘what’ a company produces and sells, but also ‘how’ they go about it.

Customers now look for companies that not only work for them but also the betterment of society as a whole. Businesses that act in favor of society receive widespread acceptance and continued support from different stakeholders, such as customers, employees, the local community, the media, and the government. Therefore, modern businesses are increasingly focusing on new business models like social entrepreneurship, bottom of the pyramid, and collaborative consumption.

Smart Paani is a social enterprise in Nepal that was established in 2011 with the mission to “conserve every drop”. The company comprises experienced technicians, researchers, and businessmen who provide eco-friendly and cost-effective solutions to water issues in the country. Smart Paani offers water systems for new or existing homes that can reduce water requirements by 50-70 percent annually, in comparison to traditional water usage.

The company has a range of water products, including rainwater harvesting, water recycling, water filtration, wastewater treatment, consulting services, and more, that help meet the pressing social need to save water, while also generating sustainable profits. As a result of its efforts, Smart Paani has been able to improve its relationships with various stakeholders. In May 2017, the company received its first AIM2Flourish Award, recognizing its contribution to sustainable development.

2)Growing Emphasis on Ethical Values

Society expects businesses to uphold ethical and moral values. Business managers should do the right thing, even when no one is compelling them to do so. All stakeholders of a business, including employees, customers, community, government, suppliers, and competitors, deserve to be treated fairly. To meet these expectations, businesses are increasingly implementing various measures such as developing codes of ethics, hiring ethics or compliance officers, and organizing ethics training programs.

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Today, ethical behavior has become a key aspect of responsible business behavior which is necessary to maintain public support and credibility. Businesses must balance and integrate two social demands, high economic performance, and high ethical standards, to be both ethical and economically efficient. When a company acts ethically toward its stakeholders, it improves its contribution to society.

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However, if a company fails to act ethically, it risks losing public support and credibility, which can lead to failure. For example, Epson, one of the most admired companies in the USA, went bankrupt in 2002 due to unethical business practices. Similarly, New Road Grandpa had to shut down due to adulteration in its products.

3)Globalization

Globalization refers to a trend or process whereby economies and societies become more connected across national boundaries. With globalization, large corporations have started doing their business in many countries and making far-reaching impacts on society, negative as well as positive. It has been observed that the business has mainly the profit motive in running a business in a host country. With operation in other land comes natural resources, equality, and other social issues which

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es, equality and other social issues which must be handled carefully. The supply of unhealthy soft drinks in India like Pepsi and Coca-Cola causing harm a matter of concern and debate in the country causing conflict between businesses the society was a matter of concern and debate in and society Thus, globalization has not only allowed b to consider local laws, societal values, and location has not only allowed businesses to expand their markets but also compelled laws, societal values, and optimum utilization of natural resources.

Surviving Impelled the Fittest has become not only the law of the jungle but also the hard reality of globalized businesses. Conversely, mainly because of decreasing cross-border barriers, national governments might be unwilling to take the risk of higher legal standards for fear that the companies might migrate to countries with less demanding legislation.

4)Increased Competition

Today’s business world has become more competitive than ever before because of globalization and many other reasons. Increased competition often triggers to innovation, cut-throat activities among firms, downsizing the organization, and many other strategic changes. Such changes have far-reaching impacts on business and society relationships.

Innovation is often helpful in enhancing quality, optimally utilizing natural and other resources, reducing cost, and creating shared value between business and society. This has mostly positively impacted business and society relationships. But, sometimes, particularly technological innovations may cut jobs and consequently, resistance to change from employees or unions may occur.

Similarly, completion may also increase cut-throat activities among firms. Likewise, particularly during the economic recession, companies can opt to downsize the organization and reduce charitable contributions. These situations generally lead to insecurities and increased social problems. For instance, during the economic recession of 2007-2008, many large corporations eliminated thousands of jobs, leading some observers to conclude that the “good corporation” is dead. All these indicate that increased competition has also shaped business and society relationships – both positively and negatively.

5)Evolving Government Regulations and Business Response

The role of government has changed drastically in many countries in recent decades. From time to time, the laws and regulations that the government changes have significantly impacted how business operates in society. In many cases, the government restricts activities that may be fruitful to the company but not so good to the society. As a result, lobbying has become common where companies try to influence the government and its bodies to work in their favor.

For instance, the Nepal government has recently mandated certain types of companies to spend 1 percent of their annual profit on CSR-related activities. Though the business community has generally accepted it, there is still a debate regarding the provision of the penalty amount (i.e., 0.75 % of the annual turnover as indicated in Section 41 of the Industrial Enterprise Act, 2073). But, how the government makes or changes its policy largely impacts business and society relationships rather than how the business community reacts to government regulations. This is because all entities including businesses must abide by the law of the nation even if it is not favorable to them.

6)Sustainable Development Concerns

Sustainable development is the development that meets the needs of the present, without compromising the ability of future generations to meet their own needs. Concerns for Sustainable development have substantially increased in recent years. This is mainly because many natural resources are finite and non-renewable. If they are not properly used today, they will be no longer available tomorrow.

Sustainable development is about finding better ways of doing things, both for the future and the present. For this purpose, however, companies need to change their traditional way of doing business Companies need to adjust their products, manufacturing processes, purchasing activities, and business strategies. Pollution and waste cannot be stopped entirely, but their volume can be reduced through improved product design, better controls, and the recycling of reusable materials.

There are several examples of how sustainable development concerns have impacted business behaviors and the business & society relationships. FedEx Corporation, for example, uses hybrid vans that are 42% more fuel-efficient than conventional trucks. In IBM, 25% of employees telecommute (i.e., working from home) resulting in a reduction in carbon emission, travel time, travel cost, and energy use. Wal-Mart turns waste food into compost, animal feed, or energy through anaerobic digestion.

Likewise, academics are also deliberating sustainable development concerns in different forums including international conferences. In March 2018, for instance, DAV Business School and DAV College jointly organized an international conference on “Integrating Knowledge and Technology for Sustainable Development” in Kathmandu. Development agencies like UNDP are also encouraging the business sector to actively support Sustainable Development Goals (SDGs). Similarly, customers are also increasingly positively responding to sustainable products compared to unsustainable products. For instance, a survey carried out by the Do Well Do Good social responsibility consultancy in 2010 found that 88 percent of consumers thought “companies should try to achieve their business goals while improving society and the environment.”

All these examples and evidence indicate that sustainable development has become one of the major concerns among businesses and other stakeholders these days. Thus, sustainable products, business processes, and models are going to be rewarded by different stakeholders of society whereas unsustainable business practices are likely to face pressures from different stakeholders.

7)Changing Work, Workplace and Work Styles

The nature of work and the workplace is continuously changing over the last many decades. In the early 19th century almost all cloth production was at home. Moving production from home to the factory split families, created new communities, and transformed traditional relationships between business and society, particularly the workers and their families.

Globalization, increased social awareness, political transformation processes, and enlightened self-interest of business resulted in workforce diversity. Just a few decades earlier, for example, working outside the home might not have been an option for girls but, today, it has become a common phenomenon. No business can afford to discriminate against people based on their gender, caste, religion, physiological abilities, and so on. Inclusiveness, automation, telecommuting, and sustainable work styles have become the order of the day. Those who embrace diversity, flexibility, and sustainable work styles are well supported and better recognized by society.

FAQ

What are the Business and Society Relationships are:

1.     Changing Societal Expectations
2.     Changing Work, Workplace and Work Styles
3.     Growing Emphasis on Ethical Values
4.     Sustainable Development Concerns
5.     Globalization
6.     Evolving Government Regulations & Business Response
7.     Increased Competition

What do you mean by Changing Societal Expectations

Society’s expectations of business are continuously changing. In the 19th century, business activities and concerns were considered purely economic, In the early 20th century, business organizations were expected to give something back to society after making a profit…………..

What do you mean by Growing Emphasis on Ethical Values?

The society also expects business to live by the ethical or moral values of society. Society wants business managers to do the right things even when no one is compelling. Every stakeholder of business – employees, customers, community, government, suppliers, and competitors – wants to be treated fairly. This is the reason why today’s businesses are increasingly making various arrangements, such as developing of code of ethics, hiring ethics or compliance officers, organizing ethics training programs, etc. – to make ethics work in organizations…………….

What do you mean by Globalization?

Globalization refers to a trend or process whereby economies and societies become more connected across national boundaries. With globalization, large corporations have started doing their business in many countries and making far-reaching impacts on society, negative as well as positive. It has been observed that the business has mainly the profit motive in running a business in a host country. With operation in other land comes natural resources, equality, and other social issues which…………..

What do you mean by Increased Competition?

Today’s business world has become more competitive than ever before because of globalization and many other reasons. Increased competition often triggers to innovation, cut-throat activities among firms, downsizing the organization, and many other strategic changes. Such changes have far-reaching impacts on business and society relationships………

What do you mean by Evolving Government Regulations and Business Response?

The role of government has changed drastically in many countries in recent decades. From time to time, the laws and regulations that the government changes have significantly impacted how business operates in society. In many cases, the government restricts activities that may be fruitful to the company but not so good to the society. As a result, lobbying has become common where companies try to influence the government and its bodies to work in their favor…………..

What do you mean by Sustainable Development Concerns

Sustainable development is the development that meets the needs of the present, without compromising the ability of future generations to meet their own needs. Concerns for Sustainable development have substantially increased in recent years. It is mainly because many natural resources are finite and non-renewable……

What do you mean by Changing Work, Workplace, and Work Styles

The nature of work and the workplace is continuously changing over the last many decades. In the early 19th century almost all cloth production was at home. Moving production from home to the factory split families, created new communities, and transformed traditional relationships between business and society, particularly the workers and their families………

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