Socio-Cultural Environment of Business

Social and Cultural Environment of Business

Social and Cultural Environment

1. Business is as much a socio-cultural phenomenon as it is an economic activity. Socio-cultural environment influences all aspects of human behaviour and is pervasive in all facets of business operations. For example, they have considerable impact on products that people consume; designs, colours and symbols they like; dresses they wear and emphasis they place on religion, work, entertainment, family and other social relations.

Culture refers to a man’s entire social heritage: a distinctive life style of a society and its total value system which is intricately related to the consumption pattern of the people and management philosophies and practices.

2. Social and cultural environment is quite comprehensive because it may include the total social factors within which an organization operates. In fact, the political and legal environment is closely interlinked with social and cultural environment because laws are passed as a result of social pressures and problems. Social environment may be described as “the environment of the society as a whole.” Cultural environment may be said to be “an aggregate of all sub-cultures, each with different concepts and benefits.” From business organization’s point of view, it may include the following-

• Social attitudes and values, such as expectations of society from business, social customs, beliefs, rituals and practices and practices, changing life-style patterns and materialism,
• Social concerns, such as the role of business in society. environmental pollution, corruption, use of mass media and consumerism.
• Educational levels.
• Family structure and expected change in it, attitude towards and within the family, and family values.
• Role of women in society, Position of children and adolescents in family and society.
• Awareness of social responsibility and work ethics.
• Concern with quality of life.
• Birth and death rates.
• Population shifts.
• Consumption habits.
• Consumption of family.

Since corporate enterprises produce goods or services for diversified markets, they have to keep in view the diversities in socio-cultural environments, if they wish to be successful in their business pursuits. A Socio-cultural environment of the USA is different from that of Japan and China. Likewise, socio-cultural environment in the Middle East is not the same as in India and South-East Asia. A firm wanting to market its products in various regions with diversified cultures will have to carefully study the existing consumption pattern and scope for creating demand for new products.

An important reason for the failure of a number of companies I foreign markets is their failure to understand the cultural environment of these markets and to suitability formulate their business strategies accordingly. if a business is to succeed, its strategy should be appropriate to the socio- cultural environment.

Many products, even by well established manufactures, have failed because these could not match the social values. Similarly, many products which may not seem to be economically viable may succeed because of their social and cultural values.

Further, the organizations have to follow social expectations in their objective setting and working. However, the social and cultural factors are also subject to change, though the change is gradual and steady which can be forecasted with comparative ease once the managers get an insight of these factors.

A familiarity with business customs and practices prevalent in different countries is a must to avoid business blunders A manger dealing with people from different cultures should be well aware of difference in the number and nature of stages involved in business negotiations and formalities to be observed in concluding business contracts.

Social environment is many countries is responsible for responsible for emphasizing social responsibility of business and customer oriented marketing approach. Social marketing concepts demand not only. consumers’ welfare but also citizen’s welfare.

In analyzing social and cultural factors, the organization can ask the following questions-

• What are approaches of the society towards business in general and in specific areas?
• What is the life style of people and what products are suitable for that life style?
• What is the propensity of consume and to save?
• Do people buy specific products for specific occasions necessitated by social and religious requirements?
• How do social, cultural and religious factors affect acceptability, or otherwise of products?
• What is the level of acceptance e of or resistance of change?
• What is the changing role of women in nature of goods?
• What is the impact of consumerism on trade practices?

Important links

• Economic Environment- Economic, Financial System & Policies
• Political Environment of Business
• Business Environment – Definition, Micro & Macro Components
• Kinds of business environment
• Significance of business environment

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