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Social Factors Affecting the Business Enviroment

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Socio-cultural is based on the idea that the society and culture shape cognition. Social customs, values, beliefs and language are all part of what shapes a person’s identity and reality. According to this approach, what a person thinks is based on his or her social-cultural background. There are many factors which affect the organizations either internally or externally. These factors include demography, cultural values, changing roles of women, level of education, changing lifestyle and so on. They play a big part in shaping the organisation in terms of its roles, operation and functions that are practiced within the organisation.

Education and Language

The average level of education in a society affects the interests and sophistication of consumers. For example, in a community in which a high percentage of potential customers have some form of post-secondary education, small-business owners might use more details and explanations while advertising and promoting products. The spoken language of the community is a decisive factor on the labeling and advertising of the products. Consider the foreign language skills in the society while advertising. For example, in Washington, D.C., different transportation companies use English and Spanish on their brochures.

In a particular market segment, where certain products are marketed, education and language have a bigger influence on that segment, especially on the taste and preferences of the products customers that would prepare.

For example, the introduction of latest Internet Digicel Phones (Galaxy 3G) might need some form of education for users to read the contents and the language written on pamphlets or manuals to use this user-friendly product.

There are cultural language barriers, especially in our country (PNG); we cannot read Chinese language to understand the features on the cell phone, likewise other languages. But English is the international language that we adopted which we can be able to learn and apply what is learnt. But then again, in PNG the level of education that individuals attain also varies and hampers the mindset of the people. Elementary and Secondary Educations also have impacts on the power of reading and understanding of the product language and that is basically the knowhow of reading, understanding and using the product.

To further elaboration of the above points, Ambient Insight, an international market research firm specializing in e-learning and mobile learning elaborated that “the global language learning market is changing at rapid pace due to the adoption of cost-efficient technology-based products and the migration away from classroom and print products”.

To support the research by this international market research firm, an example is the “DWU’s paperless policy” that is adopted. We have access to the DWU internet and the e-learning that is basically for staff and students to research. A more advance step that DWU provides compared to other tertiary institutions in the country. Since we are in a tertiary institution, the knowledge and education that we acquire is of international standard and our interpretation of the education and language is in line with the level of education that we have so we are able to access and use the user-friendly apparatus that are available in today’s technology.

Changing roles of Women

In Papua New Guinea today norms of culture values and attitudes have become part of most individual lifestyles and which is commonly practiced by man in the society. These include preference for girls to retain their traditional roles as gardeners, baby sitters, homemaker and that is seen by the limited finance used in educating girls in the belief that it is a waste of time, money and resources in educating them. This is in regard to the thought that girls might play around and become pregnant or even marry outside their communities with a consequent loss of control over marriage exchange and bride price payments or the concern that girls will enter the westernised urban society and adopt unacceptable attitudes and behaviour.

But there has been a significant amount of change and transition experienced in the past two decades compared from that of the present. Many women especially those that are educated have been exposed to many different things, ways and lifestyles and were able to come out of their confined world. Education has provided women with knowledge and capabilities to raise their role and status in the male dominated arena. Moreover it has helped also in breaking the barrier of inferiority and subjugation amongst the female members and has discovered the significance of women and their contribution to the nation as a whole.

For example: Today women are able to get or do jobs that were male dominated or the jobs may be forbidden to women in the past. The emphasis on gender equality as brought a drastic amount of change in lives of women, which women are now free and able to express their views and opinions in almost every decision making and are given the opportunity to take up senior roles and positions in organisations which were occupied by male candidates in the past.

Cultural Values

Cultural values have played a major part in our societies in shaping and moulding our daily livelihood from past up until the present day. From traditional to contemporary and to the modern state which is today. Traditions and customs have been replaced with modern lifestyles, trend and fashion. For example, traditional attires such as grass skirts, malo and etc have been replaced with modern clothing. Belief, values and traditions practiced by our forefathers such as the chief system has been replaced by President of local LLG and the introduction of Christianity has replaced traditional belief and customs in the traditional society.


According to http://www.merriam-webster.com/dictionary/demographic, as we are all aware of the meaning of demographic, it simply relates to the dynamic balance of a population especially with regard to density and capacity for decline. The demographic changes are very important in the business world today. They are very important in a way that they affect organization markets. Some markets may decline while others may rise. There are a few demographic variables that affect organizations which include population, life expectancy, population age groups, birthrate or death rate, proportion of gender, different racial, religious and ethnic groups, etc.

It is a much broader term with the variable factors but we have chosen population age group to discuss. Population age group is an important factor affecting any organization. Organizations must provide for different population age groups at all times. There are the different age groups ranging from children, teenagers, young adults, adults and elder people. These groups have different buying power as well.

An example is the increase in the market of technological products for the young age group while to the older age group it is a decline for organizations to consider. The young age have a higher buying power than the old age group which means the young age groups are more active and are likely to have well paid jobs than the old group. They are active and keep up with the latest changes that occur around the world. This causes them to purchase more high quality and high priced goods.

Changing Preferences/Lifestyle

A major socio-cultural factor influencing businesses and business decisions making is changing consumer preferences. Urbanization and increased access to modern technology are giving people new choices and a chance to pursue more modern lifestyle. These developments will create growth opportunities but also challenges for organizations. Customers are always changing and organizations need to reevaluate their long-term consumer strategies in order to keep up with changing lifestyles.

A person’s lifestyle is essentially who he is. A person’s habits, beliefs, morals, and financial status combine to manifest how he chooses to live his life. It determines the choice he makes, the things he wants and the things he purchases. Understanding the general lifestyle trends of a population can allow a business to better market itself. If those trends change, the organization needs to in order to achieve its objectives or stay in business.

Effects on Employees

Urbanization causes the population to grow significantly, one of the negative outcome from this is decrease of net wages which is caused by more workers available and willing to work for less in exchange for a job. With lower wages, organizations can either increase their margins or decrease their prices to increase overall sales.

Effects on Customers

While employee wage demands may decrease when the population increases, prospective customers in the area will also be subject to lower wages. Lower wages mean less disposable income for purchasing a small business’ products. So, to maintain sales levels, a business would have to decrease its sales price

What was popular and fashionable 20 years ago may not be popular today or 10 years down the road. Different styles and priorities can undermine long successful products and services. For example, a clothing company must constantly be aware of changing preferences when creating new products or it will quickly become outdated.

In conclusion all these socio-cultural factors are combined to form the basis that affects the external part of the organisation. It also plays a vital role in shaping and molding the organisation in terms of growth, development and expansion but also poses a greater challenge to the organisation as a whole. Moreover, change is inevitable and significant to the upbringing of the organisation that it adapts itself to the continuous changes which are experienced within the environment.

• http://www.merriam-webster.com/dictionary/demographic • http://www.alleydog.com/glossary/definition.php?term=Socio-Cultural%20Approach, Socio-Cultural Approach, Retrieved on 26 February,2013.

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