PESTLE FRAMEWORK

SOCIAL ENVIRONMENT
Learning Outcomes
By the end of this session, students will be able to:

Explain the importance of the social environment for

business

Understand and explain major social factors

Analyse the implications of social factors for business

Social Environment

Concerned with the social organisation and structure of

society.

The social and cultural characteristics of:

a group of people…
in a particular geographical area.
Factors in the social environment
Social class/social mobility
Income and wealth
Population growth rate, age distribution
Aging population – smaller and less willing workforce ?
Family size and composition, single households
Changing nature of occupations – labour mobility
Urbanisation
Dominant religion(s), ethnic factors
Level of education, career attitudes
Lifestyle trends, consumer attitudes and opinions, consumer trends
and buying habits, home working, changing tastes, changing lifestyles
Factors in the social environment
Attitudes to work and leisure
Leisure time, health consciousness
Fashions and fads
Health and welfare
Role of men/women within the society
Living conditions (housing, amenities, pollution)
Working conditions
Income distribution (change in distribution of disposable income)
Structures of employment/unemployment
Provision of welfare for the population – welfare state, benefits etc.
The Social Environment

1. Social Divisions
Vary from country to country.

Often associated with inequalities in income, wealth, levels of health and

education, and lifestyle.

Example:
US – highest level of inequality with highest earners earning 6 times more than the lowest
earners
Only Russia and Mexico had higher levels of inequality
Most European countries had lower levels of inequality than the USA
Most equal societies were the Scandinavian countries, with Finland and Holland
Japan and Taiwan – in the middle of the rankings.
Divisions within societies

2. Education – levels of literacy and educational achievement.

 Global literacy rate almost 90% (UNESCO, 2008)
 Southern Asian countries like India: 61%
 Pakistan: around 50%

3. Health – infant & maternal mortality, life expectancy,

incidence of diseases.
Divisions within societies
4. Demography – population size, growth and structure,
urbanisation.

World Population
Divisions within societies
5. Different models of welfare provision

Emanates from the model of government employed:

The Liberal Model

The Corporatist Model

The Social Democratic Model

The East Asia Model

The Liberal Model

Supporters argue for:

low levels of state intervention

minimal levels of welfare provision
distinguishing between deserving and undeserving poor
people improving their position through their own efforts

Found in USA, Canada, Australia

The Corporatist Model
This model:
goes in for high levels of social expenditure
provides generous welfare benefits based on individual
contributions
sees poverty as inevitable or due to social injustice
emphasises the importance of work
values dialogue amongst the social partners (trade unions,
employers’ organisations)
gives important role to voluntary organizations in welfare
provision
Found in Germany, France, Austria and Italy
The Social Democratic Model

Countries operating this model go in for:

relatively high levels of social expenditure
generous and universal welfare benefits
redistributive tax and spending policies
help for those wishing to work
dialogue between the social partners
Found in Scandinavian countries e.g. Sweden, Norway
East Asia Model

Characteristics:
priority given to economic growth

low levels of social expenditure…but

strong emphasis on educational provision

relatively low welfare benefits

Found in Japan and the four ‘tiger’ economies of Hong
Kong, Singapore, South Korea and Taiwan.
Impact of welfare state models on work-life balance


Countries and cultures differ in relation to their
stance on whether helping employees to balance
work and family responsibilities is a collective or an
individual responsibility (Lewis, 1999).


State support for the reconciliation of work and
family responsibilities emanates from the
underpinning model of welfare state employed in the
country (Lewis and Smithson, 2001).
Impact of welfare state models on work-life balance

In an egalitarian environment, such as in the Nordic countries, perceived entitlement
to and expectations of support from state are much higher than those in countries
with more traditional welfare state models such as Ireland and Portugal.


The historical model in the UK has been one where work-life issues have been
regarded as an individual or corporate responsibility rather than a responsibility of
the state.


Thus employees do not expect the same level of state intervention and help as
would be expected in more egalitarian countries.


However, there is a growing acknowledgement by government that the
reconciliation of work and family responsibilities by employees is important to the
growth and productivity of the economy.
Social factors