Chapter 4

Socio-Cultural Environment

Concept
The socio-cultural environment may be defined as all the
social surroundings that affect the growth and operation
of a business directly or indirectly. It is made up of social
institutions, class structures, beliefs, values, accepted
patterns of behavior, customs of the people, and their
expectations.
The socio-cultural environment consists of both the
social system and the culture of the people. It consists of
the elements, conditions, and influences that shape the
personality of an individual and potentially affect his/her
attitude, disposition, behavior, decisions, and activities.
Such elements include beliefs, values, attitudes, and
habits. They are developed from cultural, religious,
educational, and social conditioning. They are learned
and are shared by society and transmitted from
generation to generation within that society.
A business has to interact with society continuously.
Hence, the managerial functions are connected with the
socio-cultural components. People are a vital and integral
part of the business. Social factors such as poverty,
illiteracy, skill, family system, caste, and religious
structure, culture, and traditions, citizens’ rights, and
consumerism affect the operation of a business directly
or indirectly.
Components of Socio-Cultural Environment
The determinants/ components of the socio-cultural
environment are mentioned below:

1. Attitude,
2. Belief,
3. Religion,
4. Language,
5. Education,
6. Family Structure,
7. Social Organization, and
8. Class Structure.

1. Attitude: Attitude is the judgments about a person,

object, idea, or activity. It may be positive or negative,
like and dislike. Hence, it is an evaluative statement and
reflects personality and behavior. It reflects a way of
responding to the environment.
Attitudes are learned, developed, and built from parents,
society, employer's superiors, and friends. Attitude
determines how a person looks at life and the work
environment. Understanding how people form attitudes
and those attitudes affect work behavior helps managers
improve their ability to deal with undesirable attitudes.

The work environment is one of the important

components to build attitude. Employees with a positive
attitude are more likely to seek solutions and remain
committed towards the organizational goals. A positive
attitude ‘Makes a person helpful and action-oriented. It
brings the people together to build a team. It boosts
confidence level and helps make better decisions. On
contrary, a negative attitude in the workplace creates an
atmosphere of distrust among the employees and causes
employees to attempt to achieve success at the expense
of each other.

2. Belief: Belief is descriptive thought about something. It

is based on knowledge, opinion, and education. It
represents a viewpoint about any idea, concept, object,
events, and people. Some of the widely held beliefs in
Nepalese society are the existence of god and family and
other relationships.
The belief system of management determines how the
organization is managed. Similarly, employee belief
shows how they see the organization and contribute
towards its goal achievement.

Employees’ attitudes and beliefs about various work-

related issues like working hours, work shift, supervision,
and the technology employed, and organizational
reforms have a significant effect on work. In Nepal, some
works are regarded better. Nepalese still believe in
superstitions. However, the attitude and beliefs of the
people are changing due to the rise in information
technology and the level of education.

3. Religion: Religion provides the philosophical

foundation for beliefs and values. It also determines the
social relationship. It determines the difference in the
attitude of the people in a society. Religion occupies an
integral position in Nepalese life and society. Significant
changes are taking place in the caste system. Religion
affects the ways of life such as food habits, dress-up,
purchase behavior, and communication.
Nepal is a country of multi-religion. The majority of the
population is Hindu. However, there is religious harmony
in Nepal. People celebrate festivals of all major religions.
In Nepal, many festivals based on religion are celebrated.
Religion affects business practices as holidays and
compensation. For instance, during Dashain and Tihar,
the consumption rate of products increases.

4. Language: Language is one of the important parts of

culture. It is the medium of communication. It is a tool
for understanding the people. Language diversities in
society create communication problems. It is important
in information gathering and evaluation. It provides
access to local society. Language remains more
important to the businesses operating at the
international level.
Nepali is a highly spoken language in Nepal. It is also the
national language. In the Himalayan region, the Sherpa
language is mostly spoken. It is similar to the Tibetan
language. In the Terai region, Maithili, Bhojpuri, Tharu,
and Hindi languages are spoken. In the mountains region,
Nepali, Tamang, Magar, and Gurung languages are
spoken. In Kathmandu valley, there is dominance of the
Newari language.
5. Education: Education is the backbone for the
development of a country. Education is the source of
knowledge and skill. It makes a person conscious and
active. A business is affected by the education level of
people. The education level of the people affects the
decision in media selection; type of people available for
staffing, method of thinking, organizational structure,
and productivity. Education level also determines the
expectation of employees.

6. Family Structure: Family is a social institution. It

significantly affects business decisions. In Nepal,
decisions are mostly made by the head of the family
mainly males. Males are mostly engaged in earning
livelihood and females are engaged in family
management. However, educated women are found to
work in different organizations. There is a tendency of
joint family in Nepal. Nowadays, there is a gradual shift
towards nuclear family.
The family structure shows how members of a family
interact with each other. The nature, size, and
composition of families differ from country to country.
The family member can influence a manager’s decision;
Family responsibility can cause high absenteeism.
Nepalese private sector businesses are largely family-
owned. There is also the tendency of favoring the family
members in jobs as well as other opportunities. In the
family businesses, the key positions are held by family
members. The management development has been weak
in such businesses.

7. Social Organization: Social organizations are in the

form of common interest groups and communities. They
can exert significant pressure on the business. Social
organizations exist in the society in form of reference
groups and communities.
The reference group is also called the common interest
group or communities. It is a group of people with similar
values, beliefs, and attitudes. Friends and peer workers
are important sources of the reference groups. The
reference group is formed by some common
characteristics that arise from political, social,
occupational, recreational, educational, and religious
bases.
Reference group affects behavior and lifestyles of people
which affect the buying behavior. The constant
interaction of individuals with the group builds certain
attitudes and behaviors. They also build common
lifestyles and norms. Customers tend to buy those
products used/ promoted by their celebrity. Reference
groups are used to change the attitude and buying
decisions of prospective customers.
Emerging Socio cultural impact of business in Nepal/ Trends
The socio-cultural environment of the country has
changed considerably over the past two decades or so
with many changes in the economic, cultural and gender
mix of the working population. This emerging and
distinctive change and class structure of the Nepalese
society has opened up new frontiers of economic and
business activities. The following are a few examples of
the broadening base of the Nepalese business sector.

a) The Middle class House-makers:

Today, the urban house- maker is playing an increasing
and active role in managing her household. The house-
maker, therefore, has a major influence in all purchase
decisions of her family. With the increasing purchasing
power of the middle class, the house-maker has more
funds with her to buy different products of daily use as
well as other commodities needed by the family.

b) Shifts in lifestyles:
Nepal is currently witnessing great changes in lifestyles
and eating habits. Fast foods are preferred to homemade
meals. The number of restaurant goers is growing.
Similarly, changing urban lifestyles demand for time
saving home appliances, TV, refrigerators, telephone
sets, music system, and so on.
c) The Urban Teenagers:
Urban teenagers belonging to the middle and upper class
families are now emerging as a sizable and distinct
market segment. They care less for tradition and religion.
They are after material comfort and inclined towards
pursuit of pleasure. The children of the teenagers spend
their pocket money on soft drinks, chocolate, fast foods,
movies and light reading materials.

d) Growth in nuclear Family:

In Nepal due to growth in working class population
modern youth tends to prefer small family or children of
one or two. This has changed the purchasing pattern and
family planning pattern of people. Unlike previous,
current generation youth tend to marry and prefer to
stay away from their parents. This has shooted the
demand for new apartment, baby care centers,
Montessori schools and changed lifestyle. The young
parents tend to invest heavily upon the baby care and
baby related products in markets and thus have
increased demand. Meanwhile, these young parents are
also equally spending for themselves in recreational
activities like watching movie, eating out in weekends
and visiting new places in a six month or so thus boosting
out the nation’s economy.
e) Change in Food Culture
Food habit of Nepali people is greatly changed due to the
influence of western cuisine. Most of the Nepalese
people needed “dal bhat” to satisfy their hunger but
today the ‘pizza culture’ has changed “dal bhat” culture.
People go to the restaurants with their families and have
pizza, burger, chicken and purchase of instant noodles,
processed meat, packaged food has taken the dinner
table at home and office due to change in lifestyle and
time limitations. The advent of KFC, Coca Cola, Organic
Coffee and imported wine has taken the place of mother
cooked food and local drinks.

f) Shift in working culture

The impact of socio culture change can be noticed in case
of occupation also. Most of the people in the past were
farmers. However, the dominant farming culture is seen
as disgrace these days, youth prefer to go abroad and
work 18 hours a day but seek little opportunities in their
home land. The remittance income has further boosted
the income of people drastically and this has created
demand for luxury items like jewelry, televisions,
refrigerators, real estate, automobiles, etc. Similarly,
people migrate from village to city in search of jobs in
offices, factories and industries. This has increased
demand for apartment service in city areas, the plotting
of land business has boomed and people are inclined
towards buying and trading shares due to awareness.

g) Change in attitude
The attitudes of people are also changing. Nepalese
people used to have spiritual thinking and dependent
upon luck, but the impact of west have translated into
materialistic people. Most of the Nepali people have
become money minded people and money has been
seen as highest respectful entity. Previously, there was
no nightlife in Kathmandu. However, Night clubs, Discos,
Dance bars have attracted not only the youths but many
people from old generation too. The awareness among
people toward gender equality has given female also
power and rights for working outside home. This has
raised their income and increased their purchasing
power decision. To tap this opportunities we can see rise
of beauty parlors, boutiques rapidly.

h) Shift in Shopping Culture

The shopping habit has changed a lot. Previously the
customer had to go to shops to buy goods but now
reverse has happened due to call centers, TV shopping,
online shopping as buying, choosing goods has become
quicker and easier. Meanwhile, shopping at the
departmental stores and shopping malls trend is the next
impact of changing socio culture in Nepal, These days
business has combined shopping centers with shopping
malls, food courts, movie theaters, game house, beauty
parlors etc. So going to shopping mall has become a new
trend of not only shopping but a complete day out in
weekend for fun and excitement.

i) Change in fashion habits

The trend of jeans and t-shirt has taken over ‘dhaka topi
and daura suruwal’ by male and ‘gunyo choli and patuki’
by female in Nepal. Nowadays it is rare to see such
dresses. These were worn by some people in special
occasions only. Nowadays people wear jeans, t-shirt, cap,
coat, hat, goggles and heavy shoes. The heavy influence
of Indian and Hollywood movies and TV serials can be
seen in fashion, eating habits and buying habits. The
cultural shift can be seen in celebrating festival as well.
Nowadays youth are also celebrating Christmas, New
Year’s Eve, and Valentine Day side by side with their local
festivals. This has created new business like party palace
venues, flower shops, event management companies,
and others.
j) Rise in Internal Tourism:
With the restoration of peace in the country, internal
tourism has also grown significantly. People visit places
of their interest. This increasing mobility of people has
created business opportunities for hotels and travels
agencies to foster fast.

Effects of Socio cultural changes on Nepalese Business

1. Management:

There is the dominance of family business in Nepal. The

family members hold top-level managerial positions. The
authority is centralized. There is a lack of corporate
culture and professionalism in Nepalese business.
However, some corporate businesses are exceptions.

2. Widespread corruption:

Nepal is one of the poorest countries in the world. The

tendency of holding the property is widespread in Nepal.
Unethical practices are common for individual and family
benefits. The level of corruption is very high, especially in
government offices. It has adverse effects on the
business sector.

3. Gender difference:

Nepal is still a male dominating country. Gender

difference is widely prevalent in Nepal. The business
sector is mostly dominated by males. The top-level is
largely occupied by males. Employment is focused on
males.
4. Social responsibility:
Nepalese businesses lack social orientation. They still
believe social welfare is the sole responsibility of the
government. They don’t take a proactive approach to
social responsibility. However, some businesses are
involved in social responsibility.

5. Modernization:
With globalization and the development of information
technology, significant changes may be noticed in the
taste and preferences in Nepalese customers. They are
heading towards westernization.

6. Lack of planning:
Nepalese business organizations lack formal planning.
Decisions are made on a contingent approach. They
focus on short-term benefits. They lack a long-term
horizon.

7. Workforce diversity:
Nepal is a multi-ethnic and multi-cultural country. This
has an impact on workforce diversity. The rate of cultural
mix in Nepalese organizations is increasing. Hence, the
management of employees in Nepalese organizations is
being more challenging.
8. Attitude towards work:
Some works are regarded better in Nepal. Nepalese
people are also found to lack motivation and
commitment towards their work.

9. Resist to change:
Nepalese people are found to resist change. There exists
a fear of change due to power loss, job loss, or other
reasons. A risk-taking culture also lacks.