Business Environment UNDER REVISED CBCS SYLLABUS

B.COM. 2nd YEAR/ 3rd SEMESTER DATE: 28/10/2022

SUB: Business Environment
UNIT 4 NOTE 05

MEANING OF SOCIO-CULTURAL ENVIRONMENT

Culture is a very crucial part of any business. There should be a proper
understanding of the cultural dimensions for taking key business decisions.
According to E.B. Tylor, “Culture of civilisation is that complex whole which includes
knowledge, belief, art, morals, law, customs and other capabilities and habits acquired
by man as a member of society.”

The socio-cultural environment is referred to as the social system as well as the

culture of the people. The socio-cultural environment includes social customs,
values, codes of conduct, beliefs, traditions, etc. Every business is influenced by the
socio-cultural environment; therefore, it is essential to examine the environment
and make strategies accordingly.
Customs, traditions, values, beliefs, practices, behaviour, poverty, literacy, etc., that
exist within a population comes under socio-cultural Environment. The social values
and structure that society admires have a significant impact on the functioning of a
business. For example, during Diwali, there is a huge demand for new clothes,
sweets, fruits, flower, etc. Due to increase in literacy rate the consumers are
becoming more conscious of the quality of the products. In addition, there has been
a significant increase in consumerism. All these factors have led to tremendous
increase in the demand for the different types of household goods. The consumption
patterns, the dressing and living styles of people belonging to different social
structures and culture vary significantly. This leads to generation of demands for
different kinds of products.

The behaviour and attitudes of individuals and their relationships determine socio-
cultural environment. Factors responsible for the creation of a sociocultural
environment include beliefs, values, norms and traditions of the society. These
factors determine how individuals and organisations should be interrelated. These
factors affect the business to a large extent. For example, the demand for goods and
services is highly affected by the factors, such as customs, values, norms,
preferences, etc., of the customers

The important socio-cultural factors that have a major impact on the operation
of a business are as follows:

1. Culture:
According to the definition by House, Javidan et al., “culture is defined as shared
motives values, beliefs, identities, and interpretations or meaning of significant events

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Business Environment UNDER REVISED CBCS SYLLABUS
that result from common experiences of members of collectives and are transmitted
across age generations.”
The culture that exists within a society or community has an overwhelming impact
on any business. It has been an established fact that the culture drives people’s
behaviour, innovation and customer service.

2. Language:
Because of diversity, people in different state, countries use different languages to
communicate. An organisation operating in different states or countries should have
its business communication designed in a way that can be comprehended by the
local audience. English is accepted as a universal business language.

3. Religion:
Religion even determines the way people think of work. As a result, religion
influences enterprise and its operations. Many companies adapt their working
processes according to a religion of a given state or countries in terms of the
holidays, working hours, food habits, a way of dressing, etc.
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4. Social systems:
The way individual interacts and socialises with other individuals in the society is
called Social system. It includes family systems, marriage, caste system, etc. Social
systems influence the consumption habit of people. For example, with an increasing
number of families, the demand for fast foods and ready to cook foods has
increased.

5. Level of education:
Education is about teaching, learning skills and knowledge.
Education changes the lifestyle of people, their thoughts and the way of doing work.
The level of education changes state-wise. However, in many countries, the level of
education has a tendency to increase. The education level and level of literacy of
population of a given country are indicators of the quality of their potential
workforce.

6. Customer preferences:
With the spread of global communication and facilitated travel opportunities,
certain social behaviours are getting similar globally. Today, people around the
world watch the same movies, listen to the same music, play the same video games
and use the same Internet websites. Apparently, the taste and habits of the
population are becoming the same. This social trend is called global convergence.
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7. Social institutions:
Social institutions such as family, economics, religion, education and state define the
collective modes of behaviour. They prescribe a way of doing things. Secondary
institutions are derived from primary institutions. The secondary institutions
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derived from family such as marriages, divorces, monogamy, polygamy, etc. The
secondary institutions of education are school, college, university, etc. The
secondary institutions of state are interest groups, party system, democracy, etc.
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8. Population growth rate:
The increases in the number of individuals in a population. The rise in demand for
food ultimately depletes natural resources needed by everyone for living.

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