The sociological and cultural factors have a considerable influence on non-economic environment of the business. Culture consists of the cultivated behavior of individuals within a society. Socio-cultural environment refers to the influence exercised by certain factors which are beyond the company’s gate. Such factors include:
People’s attitude to work and health, role of family, marriage, religion and education, social responsibility of business.
Social class and caste of a person ho a long way in deciding the business activities in relation to its production and marketing activities. Traditions, customers and social attitudes have changed the attitudes and beliefs of the persons which have their effect on business environment. From the marketing point of view both the caste ad class structure relevant because both of them influence purchasing pattern. While dealing with the social environment, we must consider the social environment of the business which encompasses its social responsibility and the alertness or vigilance of the consumers and of society at large. Culture characteristics are very important is formulation of businesses strategies. The cost of ignoring customs, traditions, tastes and preferences etc can be very high. The interface between business and culture can be understood from following points.
Various factors of Socio-Cultural Environment
Culture creates people: It is the culture which generally determines the ethos of people. It tends to rain a person along particular lines which puts a personality stamp on them like Indians, Americans, Britishers, and Japanese etc. There are sub cultures with in a culture. When people with different cultural background promote, own and manage organizations then organizations themselves tend to acquire distinct cultures like cultures of ‘Tata’ group of companies is different from that of ‘Birlas’. Culture performs at least four functions:
Culture distinguishes between one organization and another. It conveys in creating of identity for organization members. It helps in creating a sense of commitment to do something nobler than one’s own interest. It enhances social stability. So culture acts like social glue that helps hold the organization together by providing appropriate standards for behavior of members of organization.
Culture and globalization: as one move from one country to another there come an element of ‘cultural shock’ I.e. confusion, disorientation and emotional upheaval e.g. an executive transferred from Indian to Japan will require lot of adjustment to make. So to overcome; Cultural shock’ there is need for understanding and appreciating cultural differences across the countries.
Attitude to work: How a worker looks at his work depends on his culture. Motivation, morale and other related aspects of human resource management are based on worker’s attitude to work. Japanese have achieved progress because of their commitment to work.
Attitude to business: Businessman must have some basic set of philosophies to guide their actions. Beliefs value system, concerning what is right and what is wrong, are basic to business activity. Attitude of people towards business is largely determined by their culture.
Culture determines Goods & service: The type of clothes people wear, the food they eat, the building material they use to construct houses vary from culture to culture and time to time with in same culture. Business should realize these cultural differences and bring out products accordingly.
Ambitions: An ambitions person is highly motivated, has a strong urge to excel and is prepared to change the organization. Economy also becomes vibrant of a major portion of population is of ambitions persons.
Education: In additional society, education was a preserve of Brahmins. Things have changed over the passage of time. Education institutions have come up in all corners of t he country and now we have more number of primary schools than U.S.S.R. and U.S.A. put together. Education benefits business. Business in turn has responded and started supporting education. This continuing education and bearing the cost of the education of employee’s children.
Family: The family is one of the chief agencies of social life. The family is important for various reasons such as inheritance rights, protection, morality, care of sick and aged and the transmission of cultural values. Nuclear families have become common now in our society in place of joint family system. With big families being broken up, family businesses are slowly turning into limited companies.
Ethics in Business: Ethics refers to the code of conduct that guides an individual in dealing with others. Ethics is important because:
It corresponds to basic human needs. Values create credibility with the public. Values give management credibility with employees. Values help better decision making. Ethics and profit go together.
Time dimension: It refers to people’s orientation-past, present and future. Time dimension is another aspect of culture that influences business. Societies which are oriented towards past tend to preserve past heritage. Our society is good example of past and future orientation.