Socio-Cultural Environment of Business 6 Factors
Socio-Cultural Environment

Socio-Cultural Environment of Business | 6 Factors

What is Socio-Cultural Environment?

Socio-cultural environment refers to the influence exercised by certain factors which are beyond the company’s gate. 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. Such factors include:

(i) People’s attitude to work and health

(ii) Role of family

(iii) Marriage

(iv) Religion and education

(v) Ethical issues

(vi) Social responsibility of business

Social class and caste of a person go a long way in deciding the business activities in relation to its production and marketing activities. Traditions, customs 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 and class structure are relevant because both of them influence purchasing pattern.

While 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 in formulation of business strategies. The cost of ignoring customs, traditions, toboos, tastes and preferences etc. can be very high. The interface between business and culture can be understood from following points.

Socio-Cultural Environment of Business 6 Factors
Socio-Cultural Environment

Culture Creates People

It is the culture which generally determines the ethos of people. It tends to train people along particular lines which puts a personality stamp on them like Indians, Americans, Britishers, Japanese etc. There are sub cultures within a culture.

When people with different cultural backgrounds promote, own and manage organisations then the organisations themselves tend to acquire distinct cultures like culture of ‘Tata’ group of companies is different

from that of ‘Birlas’. Culture performs at least four functions:

(i) Culture distinguishes between one organisation and another.

(ii) It conveys a sense of identity for organisation members.

(iii) It helps in creating a sense of commitment to do something nobler than one’s own interest.

(iv) It enhances social system stability.

So culture acts like social glue that helps hold the organisation together by providing appropriate standards for behavior of members of organisation.

Culture and Globalization

 As one moves from one country to another there comes an element of ‘Cultural shock’ fe. confusion, disorientation and emotional upheaval e.g. An executive transferred from India 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 Business

 Businessmen must have some basic set of philosophies to guide their actions. Beliefs value systems, concerning what is right and what is wrong, are basic to business activity. Attitude of people towards business is largely determined by their culture.

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.

Culture Determines Goods & Services

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.


 An ambitious person is highly motivated, has a strong urge to excel and is prepared to change the organisation. Economy also becomes vibrant if a major portion of population is of ambitious persons.


 In traditional society, education was a preserve of Brahmins. Things have changed over the passage of time. Education institutions have come up now in all corners of the 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 support is manifested in starting and maintaining educational institutions, sponsoring employee for continuing education and bearing the cost of the education of employee’s children.


   The family is one of the chief agencies of social life. The family is important for various reasons such as inheritance, property 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 business are slowly turning into limited companies. All these developments are important to business.

Ethics in Business

 Ethics refers to the code of conduct that guides an individual in dealing with others. Ethics is important because:

(1) It corresponds to basic human needs.

(ii) Values create credibility with the public. (iii) Values give management credibility with employees.

(iv) Values help better decision making

(v) 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.

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