Efb Social Factors

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SOCIETAL ENVIRONMENTSOCIETAL ENVIRONMENT

It encompasses all social factors that influence business such asIt encompasses all social factors that influence business such as

Demographic factorsDemographic factorsCultural factorsCultural factorsSocial institutionsSocial institutionsSocial stratificationSocial stratificationReligious aspectsReligious aspects

LanguageLanguageCustomsCustomsTraditionsTraditionsSocial beliefs and attitudesSocial beliefs and attitudesTaste and preferencesTaste and preferencesBuying and consumption habitsBuying and consumption habitsBusiness ethicsBusiness ethicsTechnological, natural and economic in connection with social factorsTechnological, natural and economic in connection with social factorsLaws and regulationsLaws and regulations



Social factors affect business likeSocial factors affect business likeType of products to be manufactured and marketedType of products to be manufactured and marketedMarketing strategiesMarketing strategiesWay business should be organized and governedWay business should be organized and governed

Values and norms it should adhere to Values and norms it should adhere to

Society is also affected by the businessSociety is also affected by the business

The organization of the businessThe organization of the businessWay of business functionsWay of business functionsInnovationsInnovationsTransmission and diffusion of information and new ideasTransmission and diffusion of information and new ideas

Business activities influence social attitudes, values, outlooks, customes etc.Business activities influence social attitudes, values, outlooks, customes etc.

Ignorance or neglect of certain dimensions of the societal environment mayIgnorance or neglect of certain dimensions of the societal environment maycreate tremendous problems.create tremendous problems.



CONSUMER PREFERANCES, HABITS AND BELIEFSCONSUMER PREFERANCES, HABITS AND BELIEFS

Many companies modify their products and promotion strategies to suit Many companies modify their products and promotion strategies to suit the tastes and preferences or other characteristics of the population of the tastes and preferences or other characteristics of the population of different countries.different countries.e.g.. Coffeee.g.. Coffee

Strategy should be one that is appropriate in the socio culturalStrategy should be one that is appropriate in the socio culturalenvironment. Marketing mix will have to be so designed to suit theenvironment. Marketing mix will have to be so designed to suit theenvironmental characteristics of the market.environmental characteristics of the market.e.g.. Bicyclese.g.. Bicycles

Product attributes may differ as per the relative importance in different Product attributes may differ as per the relative importance in different countriescountries

Eating habits, consumer preferences and resultant demand patternsEating habits, consumer preferences and resultant demand patternsvary greatly from one market to another.vary greatly from one market to another.

e.g.. Mushrooms, Lassi, Sweet dishese.g.. Mushrooms, Lassi, Sweet dishes



Attitude towards packaging also differs Attitude towards packaging also differs

Nature and occasion of use of products also varies between marketsNature and occasion of use of products also varies between marketse.g.. Cold drinks, Orange juice, coffeee.g.. Cold drinks, Orange juice, coffee

Values and beliefs associated with color vary significantly between Values and beliefs associated with color vary significantly betweendifferent cultures.different cultures.

Blue, Green, White, RedBlue, Green, White, Red

There are similar differences regarding value associations with numbersThere are similar differences regarding value associations with numbers13, 9 , astronomy, astrology etc.13, 9 , astronomy, astrology etc.



ETIQUETTESETIQUETTESThe way of meeting and greeting peopleThe way of meeting and greeting people

Expression of appreciation or disapproval, Methods of showing respect Expression of appreciation or disapproval, Methods of showing respect

Ways of conducting meetings and functionsWays of conducting meetings and functions

Table mannersTable manners

Physical distance to be kept between peoplePhysical distance to be kept between people

LaughterLaughter

HandshakeHandshake

Properly responding to guests invitation/ treat Properly responding to guests invitation/ treat

Gift giving, types of gifts and way of presentationGift giving, types of gifts and way of presentation



SOME SOCIAL TRENDSSOME SOCIAL TRENDS Age and gender composition of population, family size and habitat Age and gender composition of population, family size and habitat

Number and proportion of women in workforceNumber and proportion of women in workforce

Lifestyle change due to both the partners workingLifestyle change due to both the partners working

Rise in number of double income households increase demands forRise in number of double income households increase demands fornumber of products like household appliances, electronic gadgets etc.number of products like household appliances, electronic gadgets etc.

Single parent families due to high rate of divorcesSingle parent families due to high rate of divorces



INTERDEPENCE OF BUSINESS AND SOCIETY INTERDEPENCE OF BUSINESS AND SOCIETY Changing concept of businessChanging concept of business

Values: Business develops certain belief systems and values for which Values: Business develops certain belief systems and values for whichthey stand and are source of institutional drive.they stand and are source of institutional drive.

Viability: The drive to live and grow, to accomplish the potential not Viability: The drive to live and grow, to accomplish the potential not reached and to achieve all that a living system is capable of becoming.reached and to achieve all that a living system is capable of becoming.

Public Visibility: It refers to the extent an organizations activities arePublic Visibility: It refers to the extent an organizations activities areknown to persons outside the organization. Public image is what peopleknown to persons outside the organization. Public image is what peoplethinks about an organization acts, while public visibility refers to thethinks about an organization acts, while public visibility refers to theextent to which its acts are known. It involves public examination,extent to which its acts are known. It involves public examination,discussion and judgement.discussion and judgement.



BUSINESS AND CULTUREBUSINESS AND CULTUREMeaning of culture:Meaning of culture:

It is the complex whole which includes knowledge, belief, art, morals, It is the complex whole which includes knowledge, belief, art, morals,laws, customs and other capabilities and habitat acquired by man as alaws, customs and other capabilities and habitat acquired by man as amember of societymember of society

It is the software of mind It is the software of mind- - the social programming that runs the waythe social programming that runs the waywe think, act and perceive ourselves and others.we think, act and perceive ourselves and others.Francis Merill formulates the concept of culture as follows:Francis Merill formulates the concept of culture as follows:Is the characteristically human product of social interactionIs the characteristically human product of social interactionProvides socially acceptable patterns for meeting biological and socialProvides socially acceptable patterns for meeting biological and socialneedsneedsIs cumulative for it is handed down from generation to generation in aIs cumulative for it is handed down from generation to generation in agiven societygiven society

Is meaningful to human beings because of symbolic qualityIs meaningful to human beings because of symbolic qualityIs learned by each person in the course of development in societyIs learned by each person in the course of development in society A basic determinant of personality A basic determinant of personalityDepends for its existence upon the continued functioning of society but Depends for its existence upon the continued functioning of society but is independent of any individual or group.is independent of any individual or group.



Culture consists of both material and nonCulture consists of both material and non- -material culture.material culture.Material culture involves manMaterial culture involves man- -made things and manmade things and man- -made alteration inmade alteration inthe environment.the environment.

Non material culture includes factors such as language, ideals, beliefs,Non material culture includes factors such as language, ideals, beliefs,values, music etc.values, music etc.

ELEMENTS OF CULTUREELEMENTS OF CULTURE

Knowledge and Beliefs: Prevailing notions of realityKnowledge and Beliefs: Prevailing notions of reality

Ideals: Societal norms of what is expected, customary, right or proper in aIdeals: Societal norms of what is expected, customary, right or proper in agiven situation.given situation.

Preferences: Society s definition of those things in life which are attractivePreferences: Society s definition of those things in life which are attractiveor unattractive as objects of desire.or unattractive as objects of desire.



ORGANISATION OF CULTUREORGANISATION OF CULTURE Refers to the social structure and integration of traits, complexes and Refers to the social structure and integration of traits, complexes andpatterns that make up the cultural system.patterns that make up the cultural system.

The web of organized relationships among individuals and groups that The web of organized relationships among individuals and groups that defines their mutual rights and liabilitiesdefines their mutual rights and liabilities - - together with traits,together with traits,complexes and patterns, reflects the organization of culture.complexes and patterns, reflects the organization of culture.

StratificationStratificationSocial InstitutionSocial InstitutionCultural Traits, Complexes and PatternsCultural Traits, Complexes and Patterns



CULTURAL ADAPTATIONCULTURAL ADAPTATION

The manner in which social system or an individual fits into the physicalThe manner in which social system or an individual fits into the physical

or social environment.or social environment.

Adaptation is essential for survival Adaptation is essential for survival

The message of business is that firm and its people will have to adapt toThe message of business is that firm and its people will have to adapt tothe new environment of the different markets.the new environment of the different markets.

Through a process of constant selection and constant adaptation theThrough a process of constant selection and constant adaptation themoving equilibrium of life is maintained.moving equilibrium of life is maintained.

It is important to know the process and nature of the culturalIt is important to know the process and nature of the culturalenvironment for a successful formulation of business strategies.environment for a successful formulation of business strategies.



CULTURAL SHOCK CULTURAL SHOCK

Environmental changes sometimes produce culture shockEnvironmental changes sometimes produce culture shock- - a feeling of a feeling of confusion, insecurity and anxiety caused by the strangeness of a newconfusion, insecurity and anxiety caused by the strangeness of a newenvironment.environment.

Proper homework to understand the culture can help avoid the shock.Proper homework to understand the culture can help avoid the shock.

It also highlights the importance of selection of people for foreignIt also highlights the importance of selection of people for foreignmarkets.markets.



CULTURAL TRANSMISSIONCULTURAL TRANSMISSIONEvery generation inherits a stock of cultural elements, many of whichEvery generation inherits a stock of cultural elements, many of whichhave been accumulated over a long period of time.have been accumulated over a long period of time.

Certain old elements are dropped as new ideas and traits are acquired.Certain old elements are dropped as new ideas and traits are acquired.Cultural accumulation, facilitated by cultural transmission enables manCultural accumulation, facilitated by cultural transmission enables manto build upon the achievements of past.to build upon the achievements of past.Reference groups play an important role in handling down new traitsReference groups play an important role in handling down new traitsand ideas.and ideas.

Cultural transmission is not only downward but upward also.Cultural transmission is not only downward but upward also.It takes place horizontally as well as vertically.It takes place horizontally as well as vertically.It takes by means of symbolic communicationIt takes by means of symbolic communicationIt also facilitates cultural diffusionIt also facilitates cultural diffusion- - the spread of cultural elements fromthe spread of cultural elements fromone place to another.one place to another.The cultural diffusion are easy in culture with high educational levelsThe cultural diffusion are easy in culture with high educational levelsand well organized communication system.and well organized communication system.The nature and process of cultural transmission and diffusion in aThe nature and process of cultural transmission and diffusion in asociety is important to business decision making.society is important to business decision making.



CULTURAL CONFORMITY CULTURAL CONFORMITY Individuals either tend to conform to the cultural norms or to deviateIndividuals either tend to conform to the cultural norms or to deviatefrom them.from them.

The social order depends on regular and adequate fulfillment of theThe social order depends on regular and adequate fulfillment of therole obligations incurred by the incumbents of the major statusrole obligations incurred by the incumbents of the major statuspositions in a social system.positions in a social system.It ensures that people do indeed meet their role obligation.It ensures that people do indeed meet their role obligation.

CULTURAL LAGCULTURAL LAGPut forward by William OrgburnPut forward by William Orgburn

Various part of modern culture do not change at the same rate, and Various part of modern culture do not change at the same rate, andthat since there is a correlation and interdependence of parts, a rapidthat since there is a correlation and interdependence of parts, a rapidchange in one part of our culture requires readjustments through otherchange in one part of our culture requires readjustments through otherchanges in various correlated parts of that culture.changes in various correlated parts of that culture.To successfully market a new idea it is necessary to identify the factorsTo successfully market a new idea it is necessary to identify the factorscausing the lag and to overcome them by taking appropriatecausing the lag and to overcome them by taking appropriatemeasures.measures.



CULTURAL TRAITSCULTURAL TRAITS

LOW CONTEXT AND HIGH CONTEXT CULTURESLOW CONTEXT AND HIGH CONTEXT CULTURES A high context culture is one that places great value on the intangible A high context culture is one that places great value on the intangibleaspects of a negotiation or business deal. Individuals from such culturesaspects of a negotiation or business deal. Individuals from such cultureslook beyond the facts and figures and take into account factors aslook beyond the facts and figures and take into account factors aspersonal relationships, atmosphere and attitudes towards respect,personal relationships, atmosphere and attitudes towards respect,religion and trust.religion and trust.

A low context culture assumes high degree of shared knowledge on the A low context culture assumes high degree of shared knowledge on thebehalf of a transaction partner and thus deals only in such tangiblebehalf of a transaction partner and thus deals only in such tangibleaspects of the deal as facts, figures and performance. The atmosphereaspects of the deal as facts, figures and performance. The atmosphereand personal relationships with the business partnersand personal relationships with the business partners



MASCULINE AND FEMININE CULTURESMASCULINE AND FEMININE CULTURES

A so called masculine value appreciate aggressiveness and A so called masculine value appreciate aggressiveness andassertiveness while respecting the goal of material acquisition.assertiveness while respecting the goal of material acquisition.

A masculine culture contrasts with feminine culture which appreciates A masculine culture contrasts with feminine culture which appreciatesinterpersonal relationships, put quality of life before materialinterpersonal relationships, put quality of life before materialacquisition and applaud concern for individuals and less fortunate.acquisition and applaud concern for individuals and less fortunate.

Feminine culture are often more reserved and less time driven thanFeminine culture are often more reserved and less time driven thanthose from masculine cultures where achievements are morethose from masculine cultures where achievements are moreimportant than building a long term relationship.important than building a long term relationship.

In masculine culture success is the function of the individual andIn masculine culture success is the function of the individual andsociety is made up of leaders and followers.society is made up of leaders and followers.



MONOCHRONIC AND POLYCHRONIC SOCITIESMONOCHRONIC AND POLYCHRONIC SOCITIES

Monochronic describes how a culture views time. Time is used forMonochronic describes how a culture views time. Time is used forordering one s life, for setting priorities and for doing tasks in aordering one s life, for setting priorities and for doing tasks in asequential order, one things at a timesequential order, one things at a time

Polychronic society which uses time to accomplish diverse goalsPolychronic society which uses time to accomplish diverse goalssimultaneously and to interact with as many individuals as possiblesimultaneously and to interact with as many individuals as possible- -

even at the same time. It is the characteristics of emerging societyeven at the same time. It is the characteristics of emerging society



Five cultural dimensions Identified by Fons TrompenaarsFive cultural dimensions Identified by Fons Trompenaars

UNIVERSALISM VSPERTICULARISMUNIVERSALISM VSPERTICULARISMUniversalism is the belief that ideas or practice can be applied as it isUniversalism is the belief that ideas or practice can be applied as it isuniversally in contrast to particularism which holds that the environment universally in contrast to particularism which holds that the environment dictates how ideas should be applied.dictates how ideas should be applied.The focus here is more on rules than on relationships, businessThe focus here is more on rules than on relationships, businesscontracts are adhered to very closely and people believe that deal is acontracts are adhered to very closely and people believe that deal is a

deal.deal.

In particularism, the focus is on relationships and trust than on formalIn particularism, the focus is on relationships and trust than on formalrules. In this culture legal contracts often are modified and as peoplerules. In this culture legal contracts often are modified and as peopleget to know each other better, they often change the ways in whichget to know each other better, they often change the ways in which

deals are executed.deals are executed.

It is recommended that when individuals from particularistic culture doIt is recommended that when individuals from particularistic culture dobusiness in a universalist culture, they should be prepared for rational,business in a universalist culture, they should be prepared for rational,professional arguments and lets get down to business attitude.professional arguments and lets get down to business attitude.



INDIVIDUALISM AND COMMUNITARIANISMINDIVIDUALISM AND COMMUNITARIANISM

In individualism people regard themselves as individuals, while inIn individualism people regard themselves as individuals, while incommunitarianism they regard themselves as part of a group.communitarianism they regard themselves as part of a group.

Trompenaars recommend that when people from cultures with highTrompenaars recommend that when people from cultures with highindividualism deal with those from communitariansim cultures, theyindividualism deal with those from communitariansim cultures, theyshould have patience for the time taken to consent and to consult andshould have patience for the time taken to consent and to consult and

they should aim to build lasting relationships.they should aim to build lasting relationships.

When people from cultures with high communitarianism deal with thoseWhen people from cultures with high communitarianism deal with thosefrom individualist culture, they should be prepared to make quickfrom individualist culture, they should be prepared to make quickdecisions and commit their organization to these decisions.decisions and commit their organization to these decisions.

Communitarianistics dealing with individualists should realise that theCommunitarianistics dealing with individualists should realise that thereason they are dealing with only one negotiator is that this person isreason they are dealing with only one negotiator is that this person isrespected by his or her organization and has its authority and esteem.respected by his or her organization and has its authority and esteem.



NEUTRAL VS. EMOTIONALNEUTRAL VS. EMOTIONAL

A neutral culture is one which emotions are held in check whereas an A neutral culture is one which emotions are held in check whereas an

emotional culture is one in which emotions are openly and naturallyemotional culture is one in which emotions are openly and naturallyexpressed.expressed.Eg. Japan, United KingdomEg. Japan, United KingdomPeople in emotional culture often smile a great deal, talk loudly when theyPeople in emotional culture often smile a great deal, talk loudly when they

are excited and greet each other with a great deal of enthusiasmare excited and greet each other with a great deal of enthusiasmEg. Mexico, Netherlands and SwitzerlandEg. Mexico, Netherlands and Switzerland

Trompenaars recommends that when individuals from emotionalTrompenaars recommends that when individuals from emotionalcultures do business in neutral culture, they should put as much as theycultures do business in neutral culture, they should put as much as theycan on paper and submit it to the other side.can on paper and submit it to the other side.They should realize that lack of emotion does not mean disinterest orThey should realize that lack of emotion does not mean disinterest or

boredom, but rather that people from neutral cultures do not like toboredom, but rather that people from neutral cultures do not like toshow their hand.show their hand.When those from neutral culture do business in emotional culture, theyWhen those from neutral culture do business in emotional culture, theyshould not be put off stride when the other side creates scenes or growsshould not be put off stride when the other side creates scenes or growsanimated and boisterous and they should try to respond warmly to theanimated and boisterous and they should try to respond warmly to theemotional affections of the other group.emotional affections of the other group.



SPECIFIC VS. DIFFUSESPECIFIC VS. DIFFUSE A specific culture is one in which individuals have a large public space A specific culture is one in which individuals have a large public spacethey readily let others enter and share and a small private space theythey readily let others enter and share and a small private space they

guard clsely and share with only close friends and associates.guard clsely and share with only close friends and associates.Eg. Austria, U.K., United States and SwitzerlandEg. Austria, U.K., United States and Switzerland

A diffuse culture is one in which both public and private space are A diffuse culture is one in which both public and private space aresimilar in size and individuals guard their public space carefully, becausesimilar in size and individuals guard their public space carefully, because

entry into public space affords entry into private space as well.entry into public space affords entry into private space as well.Eg. Venezuela, China and SpainEg. Venezuela, China and Spain

In specific culture, people often are invited into a person s open, publicIn specific culture, people often are invited into a person s open, publicspace, individuals in these cultures often are open and extroverted andspace, individuals in these cultures often are open and extroverted andthere is a strong separation of work and private life.there is a strong separation of work and private life.

In diffuse cultures, people are not quickly invited into a persons open,In diffuse cultures, people are not quickly invited into a persons open,public space, because once they are in, there is easy entry into thepublic space, because once they are in, there is easy entry into theprivates space as well.privates space as well.



Trompenaars recommends that when those from specific cultures doTrompenaars recommends that when those from specific cultures dobusiness in diffuse cultures they should respect a person s title, agebusiness in diffuse cultures they should respect a person s title, ageand background connections and they should not get impatient whenand background connections and they should not get impatient whenpeople are being indirect or circuitous.people are being indirect or circuitous.

When individuals from diffuse culture do business in specific cultureWhen individuals from diffuse culture do business in specific culturethey should try to get to the point and be efficient, learn to structurethey should try to get to the point and be efficient, learn to structuremeetings with the judicious use of agendas and not use their titles ormeetings with the judicious use of agendas and not use their titles oracknowledge achievements or skills that are irrevalent to the issuesacknowledge achievements or skills that are irrevalent to the issuesbeing discussed.being discussed.



ACHIEVEMENT VS. ASCRIPTION ACHIEVEMENT VS. ASCRIPTION

An achievement culture is one in which people are accorded status An achievement culture is one in which people are accorded statusbased on how well they perform their functions.based on how well they perform their functions.

Achievement culture give high status to high achievers. Achievement culture give high status to high achievers.

An ascription culture is one in which status is attributed based on who An ascription culture is one in which status is attributed based on whoor what person is.or what person is.ascription cultures accord status based on age, gender or socialascription cultures accord status based on age, gender or social

connections.connections.

Trompenaars recommends that when individuals from achievement Trompenaars recommends that when individuals from achievement culture do business in ascription cultures, they should make sure that culture do business in ascription cultures, they should make sure that their group has older, senior and formal position holders who cantheir group has older, senior and formal position holders who canimpress the other side and they should respect the status and influenceimpress the other side and they should respect the status and influence

of their counter parts in the other group.of their counter parts in the other group. Ascription individuals should make sure that their group has sufficient Ascription individuals should make sure that their group has sufficient data, technical advisors and knowledgeable people to convince thedata, technical advisors and knowledgeable people to convince theother that they are proficient, and they should respect the knowledgeother that they are proficient, and they should respect the knowledgeand information of their counterparts on the other team.and information of their counterparts on the other team.



CULTURE AND ORGANIZATIONAL BEHAVIOURCULTURE AND ORGANIZATIONAL BEHAVIOURHighlighted by Hodgetts and LuthansHighlighted by Hodgetts and Luthans

1.1. Centralised vs. Decentralised Decision makingCentralised vs. Decentralised Decision making2.2. Safety vs. RiskSafety vs. Risk3.3. Individual vs. Group RewardsIndividual vs. Group Rewards4.4. Informal vs. Formal ProcedureInformal vs. Formal Procedure

5.5. High vs. Low Organizational loyaltyHigh vs. Low Organizational loyalty6.6. CoCo--operation vs. Competitionoperation vs. Competition7.7. Short term vs. Long term HorizonShort term vs. Long term Horizon8.8. Stability vs. InnovationStability vs. Innovation



TECHNOLOGICAL DEVELOPMENT AND SOCIAL CHANGETECHNOLOGICAL DEVELOPMENT AND SOCIAL CHANGE

Social change refers to whatever may happen in the course of time to theSocial change refers to whatever may happen in the course of time to theroles, institutions or the orders comprising the social structure, theirroles, institutions or the orders comprising the social structure, theiremergence growth and decline.emergence growth and decline.

Social change is brought about by number of factors like technological,Social change is brought about by number of factors like technological,cultural, demographic, biological, economic, environmental,cultural, demographic, biological, economic, environmental,

psychological, political etc.psychological, political etc.

Technology is one of the important determinants of social changeTechnology is one of the important determinants of social changeThe industrial age has changed the social life and status of womenThe industrial age has changed the social life and status of womenThere is a huge impact of transport and communicationsThere is a huge impact of transport and communicationsMedia is also responsible for social changeMedia is also responsible for social changeModern industrializationModern industrialization



SOCIAL RESPONSIBILITY OF BUSINESSSOCIAL RESPONSIBILITY OF BUSINESS

Social responsibility of business refers to what the business does, overSocial responsibility of business refers to what the business does, overand above the statutory requirement for the benefit of the society.and above the statutory requirement for the benefit of the society.

H.S. Singhania classifies the nature of social responsibility of businessH.S. Singhania classifies the nature of social responsibility of businessinto 2 categories:into 2 categories:a) the manner in which a business carries out its own business activitiesa) the manner in which a business carries out its own business activitiesb) the welfare activity that it takes upon itself as an additional functionb) the welfare activity that it takes upon itself as an additional function



CLASSICAL AND CONTEMPORARY VIEWSCLASSICAL AND CONTEMPORARY VIEWS

Milton Friedman argues there is one and only one socialMilton Friedman argues there is one and only one socialresponsibility of businessresponsibility of business- - to use its resources and engageto use its resources and engagein activities designed to increase its profits so long as it in activities designed to increase its profits so long as it stays within the rules of the game, that is engages in openstays within the rules of the game, that is engages in openand free competition without deception and fraud.and free competition without deception and fraud.

Davis and Blomstorm hold that business is a socialDavis and Blomstorm hold that business is a socialinstitution, performing a social mission and having broadinstitution, performing a social mission and having broadinfluence on the way people live and work together.influence on the way people live and work together.



According to Steiner and Steiner, a reasonable approach According to Steiner and Steiner, a reasonable approachto social responsibility is as follows:to social responsibility is as follows:

1)1) Business should take into account the situation in which it Business should take into account the situation in which it finds itself in meeting stakeholder expectations.finds itself in meeting stakeholder expectations.

2)2) Business is an economic entity and cannot jeopardize itsBusiness is an economic entity and cannot jeopardize itsprofitability meeting social needs.profitability meeting social needs.

3)3) Business should recognize that in the long run, theBusiness should recognize that in the long run, thegeneral social good benefits everyone.general social good benefits everyone.4)4) The social responsibility expected of a business is directlyThe social responsibility expected of a business is directly

related to its social power to influence outcomes.related to its social power to influence outcomes.5)5) Social responsibility is related to the size of the companySocial responsibility is related to the size of the company

and to the industry it is in.and to the industry it is in.6)6) A business should tackle only those social problems in A business should tackle only those social problems in

which it has competencewhich it has competence7)7) Business must assume its share of the social burden andBusiness must assume its share of the social burden and

be willing to absorb reasonable social costsbe willing to absorb reasonable social costs



SOCIAL RESPONSIBILITY MODELSSOCIAL RESPONSIBILITY MODELS

Archie Carroll proposed a three dimensional conceptual model of Archie Carroll proposed a three dimensional conceptual model of corporate performance. The firm has the following four categories of corporate performance. The firm has the following four categories of obligations of corporate performance.obligations of corporate performance.1) Economic1) Economic2) Legal2) Legal3) Ethical3) Ethical4) Discretionary4) Discretionary

William E. Halal s returnWilliam E. Halal s return--onon--resources model of corporate performanceresources model of corporate performancerecognizes the fact that no corporate social posture will be valuerecognizes the fact that no corporate social posture will be value- -freefreeand this makes corporate social responsiveness a tremendously difficult and this makes corporate social responsiveness a tremendously difficult tasks.tasks.

A firm can only a firm can only attempt to unite the diverse interest of A firm can only a firm can only attempt to unite the diverse interest of various social groups to form a workable coalition engaged in creatingvarious social groups to form a workable coalition engaged in creatingvalue for distribution among members of the coalition.value for distribution among members of the coalition.



According to Ackerman s model there are three phases in the development According to Ackerman s model there are three phases in the development of the social responsiveness of a company.of the social responsiveness of a company.

The first phase is one when top management recognizes the existence of The first phase is one when top management recognizes the existence of a social problem which deserves the company s attention anda social problem which deserves the company s attention andacknowledges the company s policy towards it by making an oral oracknowledges the company s policy towards it by making an oral orwritten statement.written statement.

The second phase is characterized by the company appointing staff The second phase is characterized by the company appointing staff specialists or external consultants to study the problem and suggest specialists or external consultants to study the problem and suggest ways of dealing with it.ways of dealing with it.

The third phase involves the implementation of the social responsibilityThe third phase involves the implementation of the social responsibility

programmes.programmes.



Extent of Social Orientation and Involvement Extent of Social Orientation and Involvement

1.1. Anti Anti--socialsocial

2.2. Indifferent Indifferent

3.3. PeripheralPeripheral

4.4. Socially OrientedSocially Oriented

5.5. Committed and very activeCommitted and very active



FACTORS AFFECTING SOCIAL ORIENTATIONFACTORS AFFECTING SOCIAL ORIENTATION

Promoters and Top management Promoters and Top management Board of DirectorsBoard of DirectorsStakeholders and Internal Power RelationshipStakeholders and Internal Power RelationshipSocietal FactorsSocietal FactorsIndustry and Trade AssociationsIndustry and Trade Associations

Government and LawsGovernment and LawsPolitical InfluencesPolitical InfluencesCompetitorsCompetitorsResourcesResourcesEthical InfluencesEthical Influences



FIVE ETHICAL STANDARDS THAT ARE IN VAGUE ARE SUMMARIZED BY FIVE ETHICAL STANDARDS THAT ARE IN VAGUE ARE SUMMARIZED BY GENE LACZNIAK GENE LACZNIAK

1)1) The Golden RuleThe Golden Rule

2)2) The Utilitarian PrincipleThe Utilitarian Principle

3)3) Kant s Categorical ImperativeKant s Categorical Imperative

4)4) The Professional EthicThe Professional Ethic

5)5) The TV Test The TV Test



RESPONSIBILITY TO DIFFERENT SECTIONSRESPONSIBILITY TO DIFFERENT SECTIONS

RESPONSIBILITY TO SHAREHOLDERSRESPONSIBILITY TO SHAREHOLDERS

RESPONSIBILITY TO EMPLOYEESRESPONSIBILITY TO EMPLOYEES

RESPONSIBILITY TO CONSUMERSRESPONSIBILITY TO CONSUMERS

RESPONSIBILITY TO COMMUNITY RESPONSIBILITY TO COMMUNITY



RESPONSIBILITY TO SHAREHOLDERSRESPONSIBILITY TO SHAREHOLDERSDevelop and improve its business and build up financialDevelop and improve its business and build up financial

independenceindependenceEarn sufficient profit Earn sufficient profit By innovation and growth company should consolidate andBy innovation and growth company should consolidate andimprove its position and help strengthen the share pricesimprove its position and help strengthen the share prices

Ensure that its public image is such that share holders canEnsure that its public image is such that share holders canfeel proud of their companyfeel proud of their company



RESPONSIBILITY TO EMPLOYEESRESPONSIBILITY TO EMPLOYEESFair wagesFair wages

Best possible working conditionsBest possible working conditionsFair work standards and normsFair work standards and normsLabour welfare facilitiesLabour welfare facilitiesProper training and education of workersProper training and education of workers

Proper system for accomplishment and promotionProper system for accomplishment and promotionRecognition, appreciation and encouragement of specialRecognition, appreciation and encouragement of specialskills and capabilities of workersskills and capabilities of workersEfficient grievance handling systemEfficient grievance handling system

Participating in managerial decisions to the extent desirable.Participating in managerial decisions to the extent desirable.



RESPONSIBILITY TO CONSUMERSRESPONSIBILITY TO CONSUMERSTo improve efficiency of the functioningTo improve efficiency of the functioning

Improve quality and introduce better and new productsImprove quality and introduce better and new productsRemove imperfections in the distribution systemRemove imperfections in the distribution systemSupply goods at reasonable pricesSupply goods at reasonable prices

After sales services After sales services

Product supplied has no adverse effect Product supplied has no adverse effect Sufficient information about product Sufficient information about product

Avoid misleading the consumers by improper advertisement Avoid misleading the consumers by improper advertisement Opportunity for being heard and to redress genuineOpportunity for being heard and to redress genuine

grievancegrievanceUnderstand consumer needs and take necessary measuresUnderstand consumer needs and take necessary measuresto satisfy these needs.to satisfy these needs.



RESPONSIBILITY TO COMMUNITY RESPONSIBILITY TO COMMUNITY Prevent appropriate environmental pollutionPrevent appropriate environmental pollution

Rehabilitating the population displaced by the operation of Rehabilitating the population displaced by the operation of businessbusinessOverall development of localityOverall development of localityConserve scarce resources and developing alternativesConserve scarce resources and developing alternatives

Efficiency of the business operationEfficiency of the business operationResearch and development Research and development Development of backward areasDevelopment of backward areasPromotion of small scale industriesPromotion of small scale industries

Promotion of education and population controlPromotion of education and population controlNational effort to build up better societyNational effort to build up better society



ARGUMENTS FOR SOCIAL INVOLVEMENT BUSINESS ARGUMENTS FOR SOCIAL INVOLVEMENT BUSINESS

1.1. Business which survives using the resources of the society has aBusiness which survives using the resources of the society has a

responsibility to the societyresponsibility to the society2.2. Business which is an integral part of the social system has to care forBusiness which is an integral part of the social system has to care for

the varied needs of the societythe varied needs of the society3.3. Business which is resourceful has a special responsibility to theBusiness which is resourceful has a special responsibility to the

societysociety

4.4. Social involvement of business would fostera harmonious and healthySocial involvement of business would fostera harmonious and healthyrelationship between the society and business to the mutual benefit relationship between the society and business to the mutual benefit of both.of both.

5.5. Social responsibilities like recycling of wastes may have favorableSocial responsibilities like recycling of wastes may have favorablefinancial effects.financial effects.

6.6. Social involvement may create a better public image for the companySocial involvement may create a better public image for the companywhich may help it in attracting customers, efficient personnel andwhich may help it in attracting customers, efficient personnel andinvestors.investors.



ARGUMENTS AGAINST SOCIAL INVOLVEMENT OF BUSINESS ARGUMENTS AGAINST SOCIAL INVOLVEMENT OF BUSINESS

1)1) Business should confine to its own business. There are government Business should confine to its own business. There are government and social organization to carry out social activities.and social organization to carry out social activities.

2)2) Involvement in social activities could adversely affect the economicInvolvement in social activities could adversely affect the economichealth of a business enterprise.health of a business enterprise.

3)3) If the cost of the social involvement of the business is ultimatelyIf the cost of the social involvement of the business is ultimatelypassed on to the consumers, there is no point in exalting the socialpassed on to the consumers, there is no point in exalting the socialinvolvement of business.involvement of business.

4)4) Many companies involve themselves in social activities because of theMany companies involve themselves in social activities because of thetax exemptions on the income spent on special social purposes.tax exemptions on the income spent on special social purposes.

5)5) If the social involvement of a business enterprise causes an increaseIf the social involvement of a business enterprise causes an increasein the price of its products, it could affect its competitiveness both inin the price of its products, it could affect its competitiveness both in

the domestic and international markets.the domestic and international markets.6)6) Social involvement of business could lead to an increase in theSocial involvement of business could lead to an increase in the

dominance or influence of business over the societydominance or influence of business over the society



SOCIAL AUDITSOCIAL AUDIT a COMMITMENT TO SYSTEMATIC ASSESMENT OF AND ACTIVITIES ON a COMMITMENT TO SYSTEMATIC ASSESMENT OF AND ACTIVITIES ON

SOME MEANINGFUL, DEFINABLE DOMAIN OF THE COMPANY SSOME MEANINGFUL, DEFINABLE DOMAIN OF THE COMPANY S

ACTIVITIES THAT HAVE SOCIAL IMPACT ACTIVITIES THAT HAVE SOCIAL IMPACT

SOCIAL AUDIT involves:SOCIAL AUDIT involves:1)1) Identification of the firm s activities having potential social impact Identification of the firm s activities having potential social impact

2)2) Assessment and evaluation of the social costs and social benefits of Assessment and evaluation of the social costs and social benefits of such activitiessuch activities

3)3) Measurement of the social costs and benefitsMeasurement of the social costs and benefits

4)4) Reporting that is presenting in a proper format and manner, the socialReporting that is presenting in a proper format and manner, the socialperformance of the firm.performance of the firm.



OBJECTIVES AND BENEFITS OF SOCIAL AUDITOBJECTIVES AND BENEFITS OF SOCIAL AUDIT

1)1) The basic objective of social audit is to evaluate the social dimensionThe basic objective of social audit is to evaluate the social dimension

of the performance of the company.of the performance of the company.

2)2) Take measures to improve the social performance of the company onTake measures to improve the social performance of the company onthe basis of the feedback provided by the social audit.the basis of the feedback provided by the social audit.

3)3) Social audit increases the public visibility of the organizationSocial audit increases the public visibility of the organization

4)4) If the social audit reveals a socially commendable performance of theIf the social audit reveals a socially commendable performance of thecompany, it will help boost the public image of the company.company, it will help boost the public image of the company.



METHODS OF SOCIAL AUDITMETHODS OF SOCIAL AUDIT

Social Process Audit Social Process Audit

Financial Statement Format audit Financial Statement Format audit

MacroMacro--Micro Social Indicator audit Micro Social Indicator audit

Constituency Group Audit Constituency Group Audit

Partial Social Audit Partial Social Audit

Comprehensive audit Comprehensive audit

Corporate rating approachCorporate rating approach



OBSTACLES TO SOCIAL AUDITOBSTACLES TO SOCIAL AUDIT

1)1) It is yet to gain wide appreciation and acceptanceIt is yet to gain wide appreciation and acceptance

2) A clear and generally well accepted methodology for conducting the2) A clear and generally well accepted methodology for conducting thesocial audits is not availablesocial audits is not available

3) There is no agreement as to the items to be included for social audit 3) There is no agreement as to the items to be included for social audit

4) It is difficult to quantify the social costs and benefits of different 4) It is difficult to quantify the social costs and benefits of different activities or itemsactivities or items

5) There may be resistance within the company to social audit because of 5) There may be resistance within the company to social audit because of time, effort and difficulty involved in the tasktime, effort and difficulty involved in the task

6) There may be resistance because of the fear of a dismissal or6) There may be resistance because of the fear of a dismissal orunsatisfactory picture that may be presented by the social audit.unsatisfactory picture that may be presented by the social audit.



SOCIAL AUDIT IN INDIASOCIAL AUDIT IN INDIA

TRUSTEESHIPTRUSTEESHIP

BUSINESS ETHICSBUSINESS ETHICS

MANAGEMENT EDUCATION IN INDIAMANAGEMENT EDUCATION IN INDIA

POPULATION AND CENSUSPOPULATION AND CENSUS



POPULATION AND CENSUSPOPULATION AND CENSUS

Population Explosion in Developing countriesPopulation Explosion in Developing countries

Falling birth rate and changing age structureFalling birth rate and changing age structure

Surging Indian market Surging Indian market

CONSUMER RIGHTS CONSUMERISM AND BUSINESSCONSUMER RIGHTS CONSUMERISM AND BUSINESS



CONSUMER RIGHTS, CONSUMERISM AND BUSINESSCONSUMER RIGHTS, CONSUMERISM AND BUSINESS

Consumer Rights:Consumer Rights:1)1) Right against exploitation by unfair trade practicesRight against exploitation by unfair trade practices

2)2) Right to protection of health and safety from the goods and servicesRight to protection of health and safety from the goods and servicesthe consumer buy or are offered freethe consumer buy or are offered free

3)3) Right to be informed of the quality and performance standards,Right to be informed of the quality and performance standards,

ingredients of the product, operational requirements, freshness of theingredients of the product, operational requirements, freshness of theproduct, possible adverse side effects and other relevant factsproduct, possible adverse side effects and other relevant factsconcerning the product or serviceconcerning the product or service

4)4) Right to be heard if there is any grievance or suggestionsRight to be heard if there is any grievance or suggestions

5)5) Right to get the genuine grievances redressedRight to get the genuine grievances redressed

6)6) Right to choose the best from a variety of offers.Right to choose the best from a variety of offers.

7)7) Right to a physical environment that will protect and enhance theRight to a physical environment that will protect and enhance thequality of life.quality of life.



EXPLOITATION OF CONSUMERSEXPLOITATION OF CONSUMERS

CONSUMERISMCONSUMERISM

CONSUMER PROTECTIONCONSUMER PROTECTION

NONNON-- GOVERNMENTAL ORGANISATIONSGOVERNMENTAL ORGANISATIONS



UTILITY OF CONSUMERISMUTILITY OF CONSUMERISM

1)1) Producers and sellers will not take the consumer for grantedProducers and sellers will not take the consumer for granted

2)2) Consumerism will provide feedback for the businessConsumerism will provide feedback for the business

3)3) Producers will be able to enlist the support of consumers to minimiseProducers will be able to enlist the support of consumers to minimisethe imperfections on the distribution front the imperfections on the distribution front

4)4) Consumerism will make the government more responsive toConsumerism will make the government more responsive toconsumer interests, prompt it to take necessary statutory measuresconsumer interests, prompt it to take necessary statutory measuresand make the required institutional arrangements to safe guardand make the required institutional arrangements to safe guardconsumer rightsconsumer rights



UN GUIDELINES FOR CONSUMER PROTECTIONUN GUIDELINES FOR CONSUMER PROTECTION

The themes for the guidelines:The themes for the guidelines:

1)1) Physical safetyPhysical safety

2)2) Economic Interest Economic Interest

3)3) StandardsStandards

4)4) Essential Goods and servicesEssential Goods and services

5)5) RedressRedress

6)6) Education and InformationEducation and Information

7)7) HealthHealth



OBJECTIVESOBJECTIVES

1)1) To assist countries in achieving or maintaining adequate protectionTo assist countries in achieving or maintaining adequate protection

for their population as consumersfor their population as consumers2)2) To facilitate production and distribution patterns responsive to theTo facilitate production and distribution patterns responsive to the

needs and desires of consumersneeds and desires of consumers3)3) To encourage high levels of ethical conduct for those engaged in theTo encourage high levels of ethical conduct for those engaged in the

production and distribution of goods and services to consumersproduction and distribution of goods and services to consumers

4)4) To assist countries in curbing abusive business practices by allTo assist countries in curbing abusive business practices by allenterprises at the national and international levels which adverselyenterprises at the national and international levels which adverselyaffect consumersaffect consumers

5)5) To facilitate the development of independent consumer groupsTo facilitate the development of independent consumer groups6)6) To further international cooperation in the field of consumerTo further international cooperation in the field of consumer

protectionprotection7)7) To encourage the development of market conditions which provideTo encourage the development of market conditions which provide

consumers with greater choice at lower prices.consumers with greater choice at lower prices.



GENERAL PRINCIPLESGENERAL PRINCIPLESThe legitimate needs which the guidelines are intended to meet are:The legitimate needs which the guidelines are intended to meet are:1) The protection of consumers from hazards to their health and safety1) The protection of consumers from hazards to their health and safety

2) The promotion and protection of the economic interest of consumers2) The promotion and protection of the economic interest of consumers

3) Access of consumers to adequate information to enable them to make3) Access of consumers to adequate information to enable them to makeinformed choices according to individual wishes and needsinformed choices according to individual wishes and needs

4) Consumer education4) Consumer education

5) Availability of effective consumer redress.5) Availability of effective consumer redress.

6) Freedom to form consumer and other relevant groups or organizations6) Freedom to form consumer and other relevant groups or organizationsand the opportunity os such organizations to present their views inand the opportunity os such organizations to present their views indecision making processes affecting them.decision making processes affecting them.



GUIDELINESGUIDELINES

1)1) Physical safetyPhysical safety

2)2) Promotion and Protection of Consumers Economic Interest Promotion and Protection of Consumers Economic Interest

3)3) Standards for the safety and quality of consumer goods and servicesStandards for the safety and quality of consumer goods and services

4)4) Distribution facilities for essential consumer goods and servicesDistribution facilities for essential consumer goods and services

5)5) Measures enabling consumers to obtain redressMeasures enabling consumers to obtain redress

6)6) Education and Information ProgrammesEducation and Information Programmes



CONSUMER PROTECTION AND CONSUMERISM IN INDIACONSUMER PROTECTION AND CONSUMERISM IN INDIA

Plight of Indian consumers miserablePlight of Indian consumers miserable1)1) Short supply of many goods and servicesShort supply of many goods and services2)2) Indian consumer is lack of effective or workable competitionIndian consumer is lack of effective or workable competition3)3) Many products with which consumers in advanced countries are quiteMany products with which consumers in advanced countries are quite

familiar are still new to a very large segment of the Indian consumersfamiliar are still new to a very large segment of the Indian consumers

4)4) Due to low literacy levels and unsatisfactory information flows theyDue to low literacy levels and unsatisfactory information flows theyare not conscious of all their rights.are not conscious of all their rights.5)5) Legal process is comparatively time consuming and cumbersomeLegal process is comparatively time consuming and cumbersome6)6) Consumerism in India is not well organized and developedConsumerism in India is not well organized and developed7)7) Poor performance of the public sector monopolies has made thePoor performance of the public sector monopolies has made the

plight of the consumers more miserableplight of the consumers more miserable8)8) Though there are number of laws to safeguard the interest of Though there are number of laws to safeguard the interest of consumers they are not effectively implemented and enforced toconsumers they are not effectively implemented and enforced toachieve the objectives.achieve the objectives.



GOVERNMENT MEASURESGOVERNMENT MEASURES

1)1) Statutory RegulationStatutory Regulation

Competition Act, Industries Act, Essential Commodities Act,Competition Act, Industries Act, Essential Commodities Act,Prevention of Food Adulteration Act, Prevention of Black MarketingPrevention of Food Adulteration Act, Prevention of Black Marketingand Maintenance of Supplies of Essential Commodities Act, Tradeand Maintenance of Supplies of Essential Commodities Act, TradeMarks and Merchandise Marks Act, Sale of Goods Act, Indian PatentsMarks and Merchandise Marks Act, Sale of Goods Act, Indian Patentsand Designs Act, Agricultural Products Grading and Marketing Act,and Designs Act, Agricultural Products Grading and Marketing Act,Indian Standard Institute s Certification Act, Standards Weight andIndian Standard Institute s Certification Act, Standards Weight andMeasures Act, Imports and Exports Control Act, PackagedMeasures Act, Imports and Exports Control Act, PackagedCommodities Order, Price and Stock Display Order, ConsumerCommodities Order, Price and Stock Display Order, ConsumerProtection Act etc.Protection Act etc.

2)2) Growth of Public SectorGrowth of Public SectorEnhancement of consumer welfare by increasing production,Enhancement of consumer welfare by increasing production,improving efficiency in production and supply, making available goodsimproving efficiency in production and supply, making available goodsand services at fair services, curbing private monopolies and reducingand services at fair services, curbing private monopolies and reducingmarket imperfections, improving the distribution system.market imperfections, improving the distribution system.



CONSUMERISMCONSUMERISM

It has the following important roles to play:It has the following important roles to play:

1)1) Consumer EducationConsumer Education

2)2) Product RatingProduct Rating

3)3) Liaison with Government and with ProducersLiaison with Government and with Producers



OPPORTUNITY FOR INDUSTRY OPPORTUNITY FOR INDUSTRY 1)1) Mktg must be considered as company s relationship with theMktg must be considered as company s relationship with the

consumerconsumer

2)2) Industry should cooperate with consumer movements in terms of Industry should cooperate with consumer movements in terms of information on and education in the productsinformation on and education in the products

3)3) Industry will have to invest increasingly in testing the safety of Industry will have to invest increasingly in testing the safety of

product in use.product in use.

4)4) Satisfactorily dealing with consumer complaintsSatisfactorily dealing with consumer complaints

5)5) Claims made on behalf of the products through advertisingClaims made on behalf of the products through advertising

6)6) Industry must invest in R and D because consumer expectations andIndustry must invest in R and D because consumer expectations andneeds are constantly rising and the constraints on meeting them areneeds are constantly rising and the constraints on meeting them arechanging.changing.



CONSUMER PROTECTION ACT, 1986CONSUMER PROTECTION ACT, 1986

It provides a system for the protection of consumer rights and theIt provides a system for the protection of consumer rights and theredressal of consumer disputes.redressal of consumer disputes.

Objective of this act is to provide for the better protection of theObjective of this act is to provide for the better protection of theinterest of consumers and for that purpose to make provision for theinterest of consumers and for that purpose to make provision for theestablishment of consumer councils and authorities for the settlement establishment of consumer councils and authorities for the settlement of consumers disputes and for the matters connected therewith.of consumers disputes and for the matters connected therewith.

CONSUMER PROTECTION COUNCILSCONSUMER PROTECTION COUNCILS

The Act provides for the establishment of a Central ConsumerThe Act provides for the establishment of a Central ConsumerProtection Council by the Central Government and State ConsumerProtection Council by the Central Government and State ConsumerProtection Council in each state by the respective state governmentsProtection Council in each state by the respective state governmentsThe central council shall consist of the Minister in charge of consumerThe central council shall consist of the Minister in charge of consumeraffairs in the central government who shall be its chairman and suchaffairs in the central government who shall be its chairman and suchnumber of other official or non official members representing suchnumber of other official or non official members representing suchinterest as may be prescribed.interest as may be prescribed.Meeting is conducted at least once every year.Meeting is conducted at least once every year.



OBJECTS OF COUNCILSOBJECTS OF COUNCILS A) A) The right to be protected against marketing of goods and servicesThe right to be protected against marketing of goods and services

which are hazardous to life and propertywhich are hazardous to life and property

B)B) The right to be informed about the quality, quantity, potency, purity,The right to be informed about the quality, quantity, potency, purity,standard and price of goods and services so as to protect thestandard and price of goods and services so as to protect theconsumer against unfair trade practicesconsumer against unfair trade practices

C)C) The right to be assured, wherever possible, access to a variety of The right to be assured, wherever possible, access to a variety of goods at competitive pricesgoods at competitive prices

A) A) The right to be heard and assured that consumer s interest willThe right to be heard and assured that consumer s interest willreceive due consideration at appropriate forumsreceive due consideration at appropriate forums

B)B) The right to seek redressal against unfair trade practices orThe right to seek redressal against unfair trade practices orunscrupulous exploitation of consumersunscrupulous exploitation of consumers

F)F) The right to consumer educationThe right to consumer education



CONSUMER DISPUTES REDRESSAL AGENCIESCONSUMER DISPUTES REDRESSAL AGENCIES

A three tier consumer disputes redressal system encompassing the district, A three tier consumer disputes redressal system encompassing the district,state and national levels.state and national levels.

1)1) A district forum in each district of every state. A district forum in each district of every state.It consist of a) person who is or has been or is qualified to be aIt consist of a) person who is or has been or is qualified to be adistrict judge nominated by state government who shall be itsdistrict judge nominated by state government who shall be itsPresident President

b) a person of eminence in the field of education, trade or commerceb) a person of eminence in the field of education, trade or commercec) a lady social workerc) a lady social worker

2)2) A state commission in each state A state commission in each stateIt shall consist of a person who is or has been judge of a High court It shall consist of a person who is or has been judge of a High court appointed by the state government and two other members whoappointed by the state government and two other members whoshall be persons of ability, integrity and standing and have adequateshall be persons of ability, integrity and standing and have adequateknowledge or experience of or have shown capacity in dealing withknowledge or experience of or have shown capacity in dealing withproblems relating to economics, law commerce, accountancy,problems relating to economics, law commerce, accountancy,industry, public affairs or administration one of whom shall be aindustry, public affairs or administration one of whom shall be awoman.woman.



3) National Commission shall consists of person who is or who has been3) National Commission shall consists of person who is or who has been judge of the Supreme court appointed by the central government and judge of the Supreme court appointed by the central government andtwo other members who shall be persons of ability, integrity andtwo other members who shall be persons of ability, integrity andstanding and have adequate knowledge or experience of or havestanding and have adequate knowledge or experience of or haveshown capacity in dealing with problems relating to economics, law,shown capacity in dealing with problems relating to economics, law,commerce, accountancy, industry, public affairs or administration, onecommerce, accountancy, industry, public affairs or administration, oneof whom shall be a woman.of whom shall be a woman.

A complaint where the value of the goods or services and the A complaint where the value of the goods or services and thecompensation if any,compensation if any,if less than 5 lakhs is to be dealt with the District Forum,if less than 5 lakhs is to be dealt with the District Forum,where such value exceeds 5 lakhs rupees but does not exceed 20 lakhswhere such value exceeds 5 lakhs rupees but does not exceed 20 lakhsrupees it is to be dealt with the state commission andrupees it is to be dealt with the state commission andcases involving more than rupees 20 lakhs fall within the jurisdiction of cases involving more than rupees 20 lakhs fall within the jurisdiction of the National Commission.the National Commission.



The state commission will also entertain appeals against the orders of The state commission will also entertain appeals against the orders of any District Forum within the state.any District Forum within the state.

Appeals against the order of the State commission can be made to the Appeals against the order of the State commission can be made to the

national commissionnational commission Appeal against the orders of the National Commission can be made to Appeal against the orders of the National Commission can be made tothe Supreme court.the Supreme court.

The State Commission is empowered to call for the records and passThe State Commission is empowered to call for the records and pass

appropriate orders in any consumer dispute which is pending before orappropriate orders in any consumer dispute which is pending before orhas been decided by any District Forum within the State, where ishas been decided by any District Forum within the State, where isappears to the State Commission that such District Forum hasappears to the State Commission that such District Forum hasexcerciesed a jurisdiction not vested in it by law, or has failed toexcerciesed a jurisdiction not vested in it by law, or has failed toexercise a jurisdiction so vested or has acted in exercise of itsexercise a jurisdiction so vested or has acted in exercise of its

jurisdiction illegally or with material irregularity. The national jurisdiction illegally or with material irregularity. The nationalcommission has similar jurisdiction over the state commission,commission has similar jurisdiction over the state commission,



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