Introduction to Socio-Cultural Environment
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, and8. 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, employers superiors, and friends. Attitude determines how a person looks at life and the work environment. Understanding how people form attitudes and tho attitudes affect work behavior helps managers improve their ability to deal wi 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, 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.
In Nepalese society, communities have a dominant role to play. There are many social organizations working as pressure groups. They have been playing a significant role in the development of society. Communities are active in developmental as well as judicial works in society.
8. Class Structure and Classification
Social classes are formed due to differences in income levels. The members in a class are likely to have similar values and attitudes. It affects buying behavior as well as social mobility. The class system is widely prevalent in Nepalese society. Nepalese society has three classes.
- Upper class: They have high income with luxuries lifestyle. They prefer branded goods. This class is very small in size in Nepal. However, it is growing rapidly. A business organization with a differentiation strategy that provides qualitative products at premium prices targets this class of customers.
- Middle class: They have medium income. This class is formed by professionals like doctors, engineers, teachers, etc. This is a growing class in Nepal. With the rapid rise in technology and globalization, many business firms are found to focus on this class of customers. A business with a hybrid strategy (low cost plus quality) targets this customer group.
- Lower class: This is a very low-income class. The lower class people have low purchasing power. The lower-income customers focus on low-cost products. They are price sensitive. A business with a cost leadership strategy focuses on this group of consumers.
