Unit 4 covers the Technological, Demographic and Socio-Cultural Environment.

1. 1
Business Environment
(Subject Code- MBT-105)
By
Dr. H. L. Bhaskar
(PhD, MBA-HRM & Marketing, UGC-NET/JRF)
Business Environment (MBA++ 1st Semester, Session- 2022-23)
Roorkee Institute of Technology, Uttarakhand

2. Unit 4
Technological, Demographic and Socio-Cultural
Environment
Contents/Topics
A. Technological Environment:
1. Factors Influencing Technological Environment,
2. Role and Impact of Technology on Business.
3. Transfer of Technology -Channels, Methods and
Limitations.
B. Demographic and Socio-Cultural Environment:
1. Population Size,
2. Falling Birth Rate,
3. Changing age structure and its impact on business,
4. Business and Society,
5. Business and Culture,
6. Culture and Organisational Behaviour.

4. (A) Technological Environment:
 The technological environment is part of the company's
external environment related to developments and changes in
technology.
Figure: Links between Technological and Human Development
Source: https://homework1.com/business-environment-homework-help/impact-of-technological-environment/

5. Continue……..
 Technology in today’s world is considered to be one of the most
significant factors of any business environment.
 Technological environment refers to the state of science and
technology in the country and related aspects such as rate of
technological progress, institutional arrangements for
development and application of new technology, etc.
 Technological environment is a component of macro
or indirect action environment.
 Technological environment changes very fast.
 Technological environment affects the manner in which the
resources of the economy are converted into output.
 Technological environment is self reinforcing. An invention in
other places.

6. Factors Influencing Technological Environment
 There are various factors which affect technology and are
discussed in detail with the help of following figure:

7. Role & Impact of Technological Environment
1. Higher productivity:
2. Global Competitiveness:
3. Changing Job Profile:
4. Need for Multiskilling and Multitasking:
5. Difficulty in Motivation:
6. Increasing Need for Capital:
7. Increasing Obsolescence:
8. Building Human Capabilities: To Live a Long, Healthy Life, To Acquire
knowledge and be Creative, To Enjoy a Decent Standard of Living, To
Participate in the Social, Economic
9. Political Life of a Community
10.Organisational Restructuring:
11.Resistance to Change:

8. Transfer of Technology- Meaning
 Transfer of Technology (ToT) is the movement of data, designs,
inventions, materials, software, technical knowledge or trade
secrets from one organisation to another or from one purpose to
another.
 Transfer of technology (TOT) also called Technology
Transfer (TT).
 The technology transfer process is guided by the policies,
procedures and values of each organisation involved in the
process.
 It can take place between universities, businesses and governments,
either formally or informally, to share skills, knowledge, technologies,
manufacturing methods, and more.
 It is promoted at conferences organised by groups like the Association
of University Technology Managers, so that investors can assess the
prospect of commercialisation for a ground breaking new product or
service.

9. Continue……
 “Transfer of technology (TOT), is the process of
transferring (disseminating) technology from the person or
organization that owns or holds it to another person or
organization, in an attempt to transform inventions and
scientific outcomes into new products and services that
benefit.”
 “A comprehensive definition of technology transfer today
includes the notion of collaborative process as it became
clear that global challenges could be resolved only through
the development of global solutions.”
 Knowledge and technology transfer plays a crucial role in
connecting innovation stakeholders and moving inventions
from creators to public and private users.
 society. Technology transfer is closely related to (and may
arguably be considered a subset of) knowledge transfer.

11. Some of the varieties of technology transfer commonly discussed
in business periodicals (such as the Wall Street Journal ) include:
1. International technology transfer: the transfer of
technologies developed in one country to firms or other
organizations in another country.
2. North-South technology transfer: activities for the
transfer of technologies from industrial nations (the
North) to less-developed countries (the South), usually
for the purpose of accelerating economic and industrial
development in the poor nations of the world.
3. Private technology transfer: the sale or other transfer
of a technology from one company to another.
4. Public-private technology transfer: the transfer of
technology from universities or government laboratories
to companies.

12. Transfer of Technology (ToT) is a Process…….
 It has stages, phases, and typical behavior.
 It operates and can be understood at different levels (e.g.
technological policy, individual scientists)
 It involves different “stakeholder” perspectives (e.g.,
Developers, and Users).
 It is a communication process.

14. Transfer of Technology Process
Figure: Transfer of Technology Process

15. Disclosure
A technology disclosure is a document formally providing the university with
details about an innovation you have developed. During this phase your
innovation will be evaluated for its commercial potential and possible patentability.
Evaluation
Through the evaluation process, a decision is made on whether or not
commercialization efforts for a particular invention or technology should be
pursued.
Protection
Patent Attorneys assist in the process of patent protection for your invention.
During this time technical details, data, and substantiation are provided to patent
attorneys to assist in the likelihood of securing a patent.
Marketing
With a researchers assistance, office staff identify companies that have the
resources and business networks necessary to bring the technology to market.
Negotiation
This phase begins when a company expresses interest in the marketed invention
or technology. An office staff member will handle all aspects of the negotiation.
License
The Office of Innovation & Technology Commercialization makes inventions
available to the public through licenses. Certain rights in the technology are
granted to the licensee, under specific terms and conditions.

18. Transfer of Technology -Channels
 There are several possible legal and/or contractual channels or
mechanisms for transferring technology from one organization to
another:
1. Licensing: the exchange of access to a technology and perhaps
associated skills from one company for a regular stream of cash
flows from another.
2. Cross-licensing: an agreement between two firms to allow each
other use of or access to specific technologies owned by the firms.
3. Strategic supplier agreement: a long-term supply contract,
including guarantees of future purchases. Example: is the second-
source agreements signed between semiconductor chip
manufacturers.
4. Contract R&D: an agreement under which one company or
organization, which generally specializes in research, conducts
research in a specific area on behalf of a sponsoring firm.

19. Continue……
5. Joint or cooperative R&D agreement: an agreement under which
two or more companies agree to cooperate in a specific area of R&D
or a specific project, coordinating research tasks across the partner
firms and with sharing of research results.
6. R&D corporation or research joint venture: the establishment of a
separate organization, jointly owned by two or more companies,
which conducts research on behalf of its owners. Example is
Bellcore, which originally was established by the seven Regional Bell
Holding Companies of the United States and which would conduct
research and set standards for the local telephone system.
7. Research Consortium—any organization with multiple members
formed to conduct joint research in a broad area, often in its own
facilities and using personnel on loan from member firms and/or
direct hires. The Microelectronics and Computer Technology
Corporation (MCC) and Semiconductor Manufacturing Technology
(SEMATECH) are examples of such organizations.

21. Methods
1. Horizontal transfer: is the movement of technologies from one
area to another. At present transfer of technology is primarily
horizontal.
2. Vertical transfer: occurs when technologies are moved from
applied research centers to research and development
departments.

22. Limitations
The problems encountered in transfer of technology
are:
• A limited general understanding of the concept of
technology, and the lack of a consistent framework for its
study.
• Lack of systematic planning for technology transfer in
developing countries or misunderstanding of its
fundamental philosophy.
• Lack of bilateral scientific/ technology advantages in the
process of technology transfer (mutual benefits).

23. B. Demographic and Socio-Cultural Environment:
 “Demographic environment is a term used by marketers
to describe the characteristics of a population that can be used
to influence the success of a business or commercial venture”.
 The most important demographic factors for businesses
include age, sex, income, education level, and occupation.
 The demographic environment in marketing is the study of
human populations in terms of size, density, location, age, sex,
race and occupation.
Figure: Constituents of Demographic Environment

24. Socio-Cultural Environment
Figure: Component of Socio-Cultural Environment

25. https://ceopedia.org/index.php/Social_and_cultural_factors_affecting_business
https://smallbusiness.chron.com/advantages-disadvantages-demographic-environment-
22283.html

26. Socio-Cultural Analysis

27. Socio-Cultural Analysis…….

28. “Social Media Marketing is a process that empowers
individuals to promote their websites, products, or services
through online social channels and to communicate with a
much larger community that may not have been available
via traditional advertising channels”.
Social Media Marketing….

30.  Social and cultural factors affecting business include
belief systems and practices, customs, traditions and
behaviours of all people in given country, fashion trends
and market activities influencing actions and decisions.
 Socio-cultural perspective is one of the most important
factor influencing decision of marketing managers
and strategic goals of companies entering new foreign
markets.
 It should be noted that legal factors affecting business is
also considered as one of the major socio-cultural factors
that can influence companies.
 Proper identification of this factor during strategic
analysis (PEST analysis, SWOT analysis etc.) could lead to
better strategic alignment of company to society (during
international development).

31. Social factors affecting business
1. Social classes and their influence on the society,
2. Average nonrefundable income level,
3. Wealth of people,
4. Economic inequalities,
5. Level of education,
6. Access to education (free, paid),
7. Level and access to health-care,
8. Health consciousness in society (smoking, drinking, drug use, safe
driving, etc.),
9. Buying habits and consumer preferences,
10. Average retirement age (for men and women),
11. Personality of average consumer,
12. Reputation of company in society,
13. Conflicts within society,
14. Susceptibility to influence,
15. Social organization (communities, social groups, gangs, ad-hoc
gatherings, etc.),
16. uncertainty avoidance dominating in society)

32. Cultural factors affecting business
1. Fashion trends,
2. Lifestyle,
3. Social media influence (blogging, etc.) Vs traditional media
(press, TV, radio),
4. Dominant communication technology in social groups,
5. Participation in cultural events,
6. Willingness to pay for tickets,
7. Popular actors, music styles, design forms, etc.
8. Creativity of people,
9. Relative population of local (folk) artists vs. Global imported
culture,
10. Various other determinants of culture.

33. Socio-cultural factors and demography
1. Population growth rate,
2. Birth control regulations and incentives,
3. Age distribution (ageing of societies can change demand),
4. Life expectancy rate,
5. Sex distribution (differences between number of men and women
in society),
6. Average family size and family structure,
7. Relative influence of minorities in society,
8. Immigration rate,
9. Emigration rate,
10.Social diversity (of income, education, race, gender, etc.),

34. Beliefs and value systems within society
1. Majority and minority religions,
2. Influence of religious leaders on social behaviours,
3. Role of religion as a binding/dividing factor in society,
4. Dominant beliefs in society,
5. Eating habits connected with religion,
6. Belief in superstitions (Friday 13th, 13th floor in buildings, etc.)
And myths,
7. Role of science in relation to religion,
8. Customs, traditions during holidays (worship days),

35. Common attitudes in society
 Attitudes toward banking, saving money and investing,
 Attitudes toward ecological products, recycling, global warming,
etc.,
 Attitudes toward renewable energy sources, green products,
 Attitudes toward imported products and services, foreign
investments, etc.
 Attitudes toward work and career, possibility of development,
 Attitudes toward leisure and retirement,
 Attitudes toward learning and self-development,
 Attitudes toward others (diverse people, counties, companies,
etc.),
 Attitudes toward safety (police, military, etc.) And privacy,
 Attitudes toward ethical/unethical behaviours and corporate social
responsibility,
 Attitudes toward management practices (negotiation, business
activities, etc.),

36. Population Size
 “Population size is defined as the number of individuals
present in a personally selected geographic range.”
 Individuals may be distributed in a uniform, random, or
clumped pattern.
 Uniform means that the population is evenly spaced, random
indicates random spacing, and clumped means that the
population is distributed in clusters.

37. Falling Birth Rate
Birth Rate :
The birth rate for a given period is the total number of live human
births per 1,000 population divided by the length of the period in
years.
Impact of falling birth rates :
 For the last 70 years, fertility rates have decreased worldwide,
with a total 50% decline. Reasons include women's
empowerment in education and the workforce, lower child
mortality and the increased cost of raising children.17-Jun-
2022.
 Since 2020, Covid has accelerated this decline in birth rates,
with the uncertainty over the future discouraging many young
people from having children.
1. Increased share of retired people:

38. Benefits of falling birth rates
1. Higher wages
2. Less pressure on the environment
3. Risk of famine and drought may wane
4. Immigrants welcomed Greater choice and freedoms for women
5. A shift in the global population

39. Changing age structure and its impact on business
Video Link : Changing population age structures and sustainable development
https://www.youtube.com/watch?v=h2zyDizG8C4&feature=youtu.be
 Some industries are beginning to adapt to the needs of a longer-living
population, boosting the world economy's long-term prospects in the
process.
 A combination of improved healthcare, technological advances and safer
working conditions, those born today can be expected to live 14 years longer
than those who came into the world half a century ago.
 The demographic age profiles in OECD economies are significantly changing.
 The average proportion of the population aged 60+ is projected to increase
from 16% in 1970 to 29% in 2030, with most of the corresponding decline
experienced in the 0-19 age group.
 Demographic changes, in particular their effect on labour supply, are often
mentioned as one of the ‘headwinds’ of the observed slowdown in
macroeconomic performance in advanced economies.

41. Business and Society

43. Business and Culture
 Business culture refers to the set of behavioral and procedural
norms that can be observed within a company — which
includes its policies, procedures, ethics, values, employee
behaviors and attitudes, goals and code of conduct.

45. Culture and Organisational Behaviour
 Organizational culture refers to the beliefs and values that
have existed in an organization for a long time, and to the
beliefs of the staff and the foreseen value of their work that
will influence their attitudes and behavior.
Figure: Structure & Culture
Organisations and Behavior
Assignment

46. Figure: Dimensions of Organizational Culture

47. • Innovation and Risk-Taking: The extent to which employees are
motivated to become innovative, willing to experiment and take risks.
• Attention to detail: The standard to which organizations workers are
expected to work on precision, analysis and pay attention to details.
• Outcome Orientation: The degree to which the company’s
management is oriented towards the outcomes instead of the strategies
and processes employed to achieve them.
• People Orientation: it is all about the degree of value and respect for
people working in the organization.
• Team Orientation: The extent to which relevance is given to effective
teamwork in comparison to the individual efforts and contributions to
the organization, by way of collaborative problem-solving.
• Aggressiveness: It is all about the employee’s approach to the work.
• Stability: It determines how open an organization is, with respect to
change.

48. Figure: Organisational Culture and How it Impacts the Behaviour of Your Company
Source: McShane, S., Steen, S. (2012). Canadian Organizational Behaviour (8th Canadian ed.). Whitby, ON.

49. Summary
Conclusion
 Customs, traditions, values, beliefs, practices, behaviour,
literacy, etc. that exist within a population comes under socio-
cultural Environment.
 Technology is a costly, uncertain and high risk activity. Import of
technology is also not easy because developed countries are not
interest in lending it out.
 It is obvious that technology must attend to the basic problems
of food, clothing, health and housing of people living in the
country. For this purpose the government has made a science
and technology policy for maintaining a sustainable
technological environment.

50. 1. Socio-cultural factors have a major impact on the operation of a
business. Explain this statement with one example.
2. Describe the social obligations of business towards its
customers and society. Explain the importance of corporate
social responsibilities.
3. What are the new technologies that the business should be
using? Explain.
4. Are there potentially any technologies being developed that
could severely impact the business or industry?
5. Describe the Changing age structure and its impact on business
with examples.
Assignment - 4