Discuss the Social Environment of Business.

- Social Environment of Business- Business is a social institution and it is influenced by

social environment.

What is Social Environment?

- Social environment refers to the people, culture, and society around you. It includes
your family, friends, community, and the values, customs, and behaviors that influence
how you interact with others and make choices in your daily life. In business or strategic
management, it also encompasses how these social factors can impact organizations
and their strategies.

What is Social Environment in Business?

- In a business context, the social environment refers to the external factors related to
society and the community that can have an impact on the operations, decisions, and
strategies of a business or organization. This includes factors such as consumer
preferences, cultural norms, demographic trends, social values, and societal attitudes.
Understanding and adapting to the social environment is crucial for businesses to
effectively meet the needs and expectations of their customers or stakeholders while
also aligning their strategies with the broader social context.

The Components of Social Environment are:

1. Population expansion and its characteristics. Sex ratio (male, female), caste, religion,
education, income, age structure etc.

- Population expansion refers to the growth of a population over time. It is influenced by

various characteristics and factors, including: Population expansion can significantly impact
business environments, markets, and strategies. Understanding key demographic factors, such
as sex ratio, caste, religion, education, income, age structure, and more, can help businesses
tailor their products, services, and marketing efforts to effectively target specific segments of
the population.

a. Sex Ratio (Male vs. Female):

 Understanding the sex ratio in a population can be vital for businesses that offer gender-
specific products or services, such as clothing, cosmetics, and health-related items.
 It can also inform workforce planning, as industries may experience differences in labor
availability based on gender

b. Caste:

 In some regions, caste plays a significant role in consumer behavior and preferences.
Businesses may tailor marketing and product strategies to cater to specific caste-related
preferences.
 Caste-based affirmative action policies can also impact hiring practices and workforce
diversity.

c. Religion:

 Religion can influence consumer preferences, dietary restrictions, and holidays.

Businesses may adjust product offerings and marketing campaigns to align with religious
practices.
 Some businesses may choose to observe religious holidays or accommodate religious
diversity in their workforce.

d. Education:

 The education level of the population can affect the demand for products and services.
Highly educated populations may have greater purchasing power and may be more
inclined toward innovative and tech-savvy products.
 Businesses may need to adapt their marketing and product development strategies to
target educated consumers effectively.

e. Income:

 Income levels within a population can determine the affordability of products and
services. Businesses can segment their market based on income brackets and offer
different pricing tiers.
 Understanding income distribution can also help identify potential growth markets for
luxury or budget-oriented products.

f. Age Structure:

 Age distribution influences consumer preferences and needs. Businesses may target
specific age groups with products and marketing campaigns.
 An aging population might create opportunities in industries related to healthcare,
retirement planning, and senior-friendly products and services.

2. Family structure may be nuclear or joint.

- Family structure typically refers to the ownership and governance structure of a family-owned
or family-controlled business.

a. Nuclear Family-Owned – This is where the business is owned and controlled primarily by a
single family, often consisting of the parents and their children.

b. Joint Family-Owned – In some cases, multiple branches or generations of a family may

jointly own and manage the business. This can be similar in concept to a joint family, where
extended family members share ownership and responsibilities.
3. Level of public responsibilities, mutual cooperation and organization, labor union, welfare
organization, religious socio organization, public faith in cooperative organization.

a. Level of Public Responsibilities:

 Businesses are expected to fulfill various public responsibilities, including compliance

with laws and regulations, ethical conduct, and environmental sustainability.
 Public expectations of responsible business practices have increased, and companies
are often judged based on their social and environmental impact.

b. Mutual Cooperation and Organization:

 Mutual cooperation and organization can enhance collaboration between

businesses, government bodies, and non-profit organizations.
 Cooperative efforts can lead to shared resources, expertise, and solutions for
addressing societal challenges and improving business environments.

c. Labor Unions:

 Labor unions represent workers' interests and can impact businesses through
collective bargaining, negotiations, and labor disputes.
 Businesses need to manage labor relations effectively to maintain a productive and
harmonious work environment.

d. Welfare Organization:

 Welfare organizations, both governmental and non-profit, play a role in providing

social services and support to individuals and communities.
 Businesses may collaborate with or support welfare organizations as part of their
corporate social responsibility (CSR) initiatives.

e. Religious Socio-Organization:

 Religious socio-organizations can have a cultural and social influence on business

practices and consumer behavior.
 Some businesses may align their values and operations with religious principles,
while others may need to navigate diverse religious beliefs among employees and
customers.

f. Public Faith in Cooperative Organization:

 Public faith in cooperative organizations can affect consumer trust and willingness to
engage with businesses.
 Cooperative business models, such as co-ops and employee-owned companies, may
benefit from higher levels of trust and loyalty from customers and employees.
4. Responsibility of Public

- The responsibility of the public in business is not limited to passive consumption but extends
to active engagement and advocacy for ethical and responsible business practices. Public
awareness, consumer choices, and collective action can exert significant influence on
businesses, encouraging them to align with societal values and priorities.

5. Mentality of Public towards work

- The mentality of the public towards work in business can vary significantly based on cultural,
societal, economic, and individual factors. Different regions and communities may have distinct
attitudes and expectations when it comes to work in the business context.

6. Attitude towards Management

- Attitudes towards management in business can vary widely among individuals and can be
influenced by factors such as organizational culture, leadership style, personal experiences, and
the specific context of the business.

7. Traditional and Scientific Approach

- Traditional and scientific approaches in business represent two distinct paradigms or methods
of managing and organizing business operations. Each approach has its own principles,
characteristics, and advantages, and they can sometimes be used in combination.

8. Customs

- Customs in business refer to the traditional practices, norms, and etiquettes that govern
interactions, transactions, and relationships within the business environment. These customs
are influenced by cultural, social, and regional factors and play a significant role in establishing
trust, building relationships, and conducting successful business operations.

9. A business cannot ignore the values, beliefs and style prevailing in the society

- Cultural awareness and adaptation are essential components of successful business strategies,
whether at the local, national, or international level. Businesses that recognize and respect the
values, beliefs, and style of the society in which they operate are more likely to thrive and build
strong, lasting relationships. Ignoring these factors can have negative consequences on a
business's reputation, growth prospects, and overall success.

10. Educational Institutions

- Educational institutions play a vital role in the field of business by providing the necessary
knowledge, skills, and training to individuals aspiring to enter the business world or advance
their careers. These institutions offer a wide range of programs, degrees, and courses
specifically designed to prepare students for various aspects of the business industry.
11. Religion

- It's important for businesses to be sensitive to the religious beliefs and practices of their
employees, customers, and partners. By promoting an inclusive and respectful environment,
understanding the ethical underpinnings of various religions, and considering the impact of
religious beliefs on business decisions, organizations can navigate the intersection of religion
and business in a way that aligns with both ethical principles and legal requirements.

12. Tastes and Preferences

- Tastes and preferences in business refer to the subjective and often individual choices that
consumers make when selecting products, services, or brands. These preferences are shaped by
a wide range of factors, including personal values, cultural influences, past experiences, social
trends, and marketing efforts. Understanding and catering to consumer tastes and preferences
is critical for businesses to succeed in the marketplace.

13. Buying and Consumption Habits of People

- The buying and consumption habits of people in business, often referred to as B2B (business-
to-business) buying behavior, can be complex and influenced by a variety of factors.
Understanding these habits is essential for businesses that cater to other businesses, as it
allows them to tailor their products, services, and marketing strategies effectively.

14. Language of People

- The language used in the business world is typically characterized by its professionalism,
clarity, and formality. Effective communication is crucial in business, as it ensures that
information is conveyed accurately and that professional relationships are maintained.

The social environment refers to how people and communities behave their relationships, education
and occupation, and the condition in which they live. The social environment factor consists of human
relationships.

Culture determines the types of goods and services a business should produce. The type of goods
people eat, the clothes they wear and building materials they use to construct house vary from culture
to culture. Therefore, firms should understand cultural preferences and provide products and services
accordingly. The values and beliefs associated with color also vary from culture to culture.

Newer attitude on the part of workers and employee about how many hours they wish to work, the
environment quality they want at work, and the kind of management style they expect, effects the
strategy of formulation of business. The consumer movement due to passing of consumer protection act
also forces to make adjustments in the business strategy.
CHAPTER 3
ENVIRONEMNT-EXTERNAL
ANALYSIS AND APPRAISAL
Q3: DISCUSS THE SOCIAL
EVIRONMENT OF BUSINESS

PREPARED BY:
MS. KYLA AKATSUKA

MR. JUN REY VIOLETA

SUBMITTED TO:
MR. ROMEO TUMPAG