Public Relations Environment Introduction, Social and Cultural Issues, Economic Issues, Political Issues, Legal Issues16/11/2020
The functions and decision of public relations (PR) are influenced by internal and external environment. The internal environment is generated within the organization which influences in the decision making of PR. They are controllable factors and comprise of personnel, infrastructure facilities, organization facilities etc.
The external environment is not under the control of an organization. It may include competition, industry problems, a threat of substitutes, social cultural factors, political factors, economic factors and many others which are externally related to an organization. It is uncontrollable factors and the business entity can only try to minimize it but can’t control it.
Social and Cultural:
The societal perspectives/trends by PR practitioners can be understood from at least four perspectives.
Stakeholder Part of Society: stakeholders are also a part of society. Their values and beliefs come from broader societal influences. For instance – the interest of society in health and fitness developed ample opportunities for fitness centers, nutritional products, fitness industries.
Socio-Cultural trends: A social system with high degree of civilization, mobility industrialization and urbanization are the primary factors impacting the business. Business depends on the social environment for all the needed inputs. Therefore, it is rightly said that business is one unit of the total social system. No business can control the social belief, culture, heritage, family systems, religion etc. but, they can influence them to a limited extent. Therefore, it is imperative for PR practitioner to develop a social connection with the public.
E.G. in the late 1990s, Bill Gates, the founder of Microsoft, was facing rising societal concern about the extraordinary profits generated by Microsoft therefore in 1999, he donated $ 3.35 Billion to the William Gates Foundation, which provides grants for health and human service organizations. The Gates Learning Foundation, today gives software, computers, and services to libraries in low-income areas.
Restrictive Legislation: It is essential for PR practitioners to guide the organization to follow the ethical paths. It will help them to avoid any serious legislation activity. For E.G. when many companies started generating profits and revenues, at that time they split their businesses or diverse it into some other field too.
Demographic and Economic Change: Due to the changes in demographic and economic changes, many companies have garnered the opportunity. The concept of “DINK (Double Income and No Kids)” has brought significant changes in couple lifestyles, the standard of living, etc. today, as many women aspire to achieve high in their life, therefore, they choose too baby later in their life. This led them to spend more on baby accessory items, giving a better life, child care midwives and education. It also opens a way to movies and television shows to produce serials center for families and children.
The growth in an economy, interest rates, government policies, support agencies, contributions, inflation rates, fiscal policies, foreign exchange rates, and foreign trade balances are among the most critical economic factors. The economy also has an impact on consumer demand for products and services. Mostly, organizations to assess the effect of economic factors model their business environments using different scenarios. The major economic factors which have a considerable influence on business include growth strategy, labour legislation, industrial relations, stock exchange and its regulations, commodity exchange, price policy, exit policy, export promotion, technological environment etc. the PR should be well versed with all these terms and use it while making their PR decisions in a company.
Politics and business have a close connection. The government itself is a political boy created by a political system. There are numbers of business legislation enacted by the government which regulates business transactions. The current changes in political dynamics impact the businesses on a larger scale. The government who is in power makes the suitable or favorable changes in the economy which benefit the businesses and large, the nation. A successful PR analyze the prevailing political environment and then formulate strategies to avail of the opportunities emerging out of a political system.
Legal aspects of business regulate both economic and non–economic issues. For E.G. the announcement by the government to demonetize Indian rupee has drastically impacted many business sectors. Many times, government passed the acts to bring changes in the Indian economy and give benefit to the masses. Therefore, PR professionals have to take a keen interest in the legal aspects affecting the performance of the functions and have to adopt a constructive role in this relationship.
There are many acts passed by India government related with business and economy aspects like The Indian Contract Act 1872, Indian Partnership Act 1932, Sale of Goods Act 1930, Negotiable Instrument Act 1881, Law of Insurance, Arbitration Act, 1899, Law of Carriage, Essential Commodities Act, 1955, The Securities Contracts (Regulation) Act, 1956, and the Consumer Protection Act, 1986.