A recent study of environmental scanning practices of larger Indian corporations (Dixit 1984) surprisingly finds a total absence of socio political factors in a list of twenty-five external factors considered to be most important by the sample of 24 companies. Though this study was conducted on a relatively small sample, it does indicate the contemporary belief of corporate management that socio-political forces in the external management are not very critical to the prosperity of the firm perhaps because according to them they can be managed easily. However, this paper takes the view that the nature of the socio-political environment is changing and is increasingly becoming adverse for the survival and prosperity of the firm. Hence business organizations would be required to devote an increasing among of time and energy towards understanding and anticipating the social consequences of their operations. The paper also discusses too approaches for responding to the new challenge: the "issues management" approach and the good corporate citizenship approach and suggests that the latter is the more creative and effective one?