Slides of Socio cultural environment

1. Socio-cultural Environment
and significance

2. • Socio-cultural environment includes the social and cultural
forces that shape and influence the business firm.
• Social environment consist of factor related to human
relationship that affects business.
• All the business organization operates within the society to
satisfy the social need.
• Different social factor influence the policy, practices and
activities of business.
• Important social factor including social environment are
demographic, social institution, social changes.
• Demographic factor consists of size, distribution, density and
growth of population, age or gender mix of people,
urbanization of population and migration of population.

3. • Social institution consists of role and structure of family, different
influence group like sports, cinemas, musical group, social class
like upper, middle or lower, their interest and behavior.
• Social changes consists changes in behavior, life style, opinions
etc.
• Cultural environment refers to all the cultural surrounding that
influence business.
• It includes customs and tradition, values and beliefs, religion and
language.
• It is created by society and handed down from one generation
to another.
• Cultural environment consist of learned pattern of behavior
common to member of a given society.
• It is unique life style of particular group of people.
• Society is composed of peoples and their cultural terms
interchanging or combined in to one and termed socio-cultural.

4. • For making different policy and strategies business firms should keep
the socio-cultural forces in mind.
• For the extension of business firm have to interact with society as a
large.
• Socio-cultural environment helps business firms in managing the
workforce, marketing output, purchasing suppliers and dealing with
officials.
• Socio-cultural environment provides guideline to all the managerial
function of a firm like finance, human resources, production and
marketing management.
• socio-cultural environment is very strong environment which creates
opportunities and threats for the business activities in the country.

5. Components of Socio-cultural
Environment
Attitude and Beliefs
• An attitude can be defined as an effective reaction to a person, object, idea or activity.
• Attitudes can be positive or negative.
• Culture creates attitude towards time, work and business.
• Belief is the descriptive thoughts held about something based on opinion knowledge or
faith.
• Belief reflects view point about object, ideas, people and events
• Time is not given important in Nepal. Tomorrow is common attitude towards time.
Meeting starts late. Deadlines don’t get met.
• In Nepal people attitude towards government job is positive as it give job security.
• Achievement orientation is lacking workers having tendency live for today.
• Fatalism and superstition dominate belief of Nepalese people which affects Nepalese
business
• . Nepalese people still keep faith in customs, traditions and beliefs

6. Religion
• Religion can be defines as dynamic belief and submissive attitude towards god or
goddess as a supernatural being on whom man feels dependent.
• Religion as an institution means the way of working system prevalent in our society
from ancient age that conducts different activities, behavior, relationship and faith
• Religion influences food habits, dress and travelling.
• Often religion imposed constraints on the role of individuals in the society.
• Religion also shapes the attitude toward works, consumption, individual responsibility
and planning for the future. Religious tradition has great impact on business activities
• Caste system in Hinduism affects every aspect of life and business
• Women are not allowed to work outside in Islamic societies
• Holidays during religious festivals like Dashain, Tihar and Christmas etc live during the
birth and death in the family, distribution of bonus, gifts, or sweets during festivals etc

7. Language:
• Language is a conceptual code, the system of knowledge that enables a person to produce and
understand speech.
• Language is a particular means of expression. It depends on culture and explains a culture.
• Nepal is multilingual country.
• 100 of languages are spoken in the country.
• Language is a medium of communication.
• Business is not possible without communication.
• Diversity in a language in a society often creates communication problem for business firm and
its manager.
• Signs, symbols, communication system and so on is in its language system may differ.
• The same word has different meanings in different language which significantly affect the
business operation in particular society.
• Language helps the manager to gather important information and observe the situation
personally.
• A manager gets messages and can understand the environmental changes through information
collection.
• Language is needed to operate business in local society to access with local people.

8. Education
• Education stands for deliberate instructions and training.
• It is a learning process.
• Education is essential tool enhancing social and economic development.
• It is essential to promote, change and development in society and to maintain brotherhood in
society
• Formal education level can be measured with several indicators like enrollment in primary,
secondary and higher level, number of students in different institution, types of course offered etc
• A business firms requires all these educational statistics as they affect every aspect of business
• It not only affects skill and abilities of managers, technicians but also they are method of thinking
and speed at which new thoughts and values will assimilate
• Educated people are needed to run business.
• Workers needed to be literate to understand order and instruction of superior.
• Customers need to be educated to understand the advertisement and sales promotion technique.
• Sales persons need to be educated to get the sales job them.
• Skilled manpower is needed for technical jobs and skilled can be gained through education.
• Globalization is increase in Nepal. Educated and well trained manpower is needed to take
advantage of globalization.

9. Family Structure
• Family is an outstanding primary group in which child develops its basic attitudes.
• Family as a social institution significantly affects purchase decision in Nepal.
• Family structure in Nepal is predominately joint and extended in nature.
• Joint structure has both advantages and disadvantages which has implication for
business firms.
• Advantage like family ties are very strong, provide social and economic security,
members shares joys and sorrows.
• It may discourages individual incentive to work.
• Family responsibility causes absenteeism at work.
• Members of family have tendency to favor to their family member or their
relatives cause conflicts.
• The housing facilities provided to workers often overcrowded because of joint
and extended family system.

10. Social organization
• Every society has structure or an organization of social relationship.
• These relationship define and regulate the manner by which its member interact with each
other.
• They consist of family, reference group and social class, social structure that influence the
business
• reference group
• They consist group that influence the attitude and behavior of consumer.
• They serve as point of reference for consumer judgment.
• They can be musical, cinemas and other professional people.
• The management of business firms should identified these group for their political and
economic power.
• Business firm have been forced to change their product, promotion, price by consumer groups.
• These group expose consumer to new behavior and life style by influencing consumer value,
attitude.
• These group provide norms for consumer behavior and influence the product and brand choice
of people.

11. Class structure
•It’s the rank with in a society determine by its member.
• It can be classified into upper, middle, lower.
• It reflect income, occupation, education an area of
residence.
•Members of class share similar values, interest and
behavior.
• Buying behaviors differs among classes.
•Business activities are influenced by buying behaviors of
different classes.

12. An Analysis of how socio-cultural environment affect
the Nepalese business
Management practices:
• Social cultural value influence the management practices
• Traditional value dominate and guide the business practices.
• Family patronage of business is wide spread.
• Participation of employee in decision making is not encouraged, information is
not shared with employee.
• Business passes from father to son.
• Professionalism is lacking in conducting business and management style is
autocratic

13. Work attitude
•Business is not regarded as occupation of priority as
priority is given to government job
•Organizational loyalty is of low level.
•Time isn’t given more important
•Things get passed on tomorrow.
•Fatalism and superstition share work attitude.
•Work ethic is lacking for hard work and result oriented is
lacking.

14. Entrepreneurship
• Socio-cultural values affect the entrepreneurship in Nepal. It has taken a
back seat for Nepalese business.
• Risk taking in new venture is lacking for entrepreneurship to flourish.
• Business organization carry on trading activities rather than starting
industrial venture.
• Professional people prefer office job for fixed salary and do not like to take
the risk associated with business.
• Religion is instrumental in shaping attitudes. Hinduism advocates to
disregards results.
• Buddhism prohibits material development.
• Islam disallow interest income.

15. Change management
• Socio-Cultural values have affected change management in Nepalese business.
• Environmental adaptation is slow in business organization.
• Change is not properly planed and managed. Its generally done by firing
employees, which cause conflict
• structural and technological approach to change management are few.
Business Ethics
• Cultural value affect the business behavior in following ways.
• Corruption and bribery is regarded as normal by Nepalese business environment
to get the work done in government offices.
• Gender equality is missing in employment.
• The sense of corporate social responsibility is poor among Nepalese business
organization

16. Emerging socio-cultural changes and trends in Nepal
•Emergence of female breadwinners
•Change in life styles
•Emergence of urban teenagers
•Growth in nuclear family
•Change in attitude
•Growing urbanization and consumer awareness
•Greater pleasure orientation and material culture
•Equal opportunity for all