SOCIAL FACTORS – BUSINESS ENVIRONMENT
The main factor that affects most business is the degree of competition – how fiercely other businesses compete with the products that another business makes. The other factors that can affect the business are: Social – how consumers, households and communities behave and their beliefs. Legal – the way in which legislation in society affects the business. Economic – how the economy affects a business in terms of taxation, government spending, general demand, interest rates, exchange rates and European and global economic factors. Political – how changes in government policy might affect the business Technological – how the rapid pace of change in production processes and product innovation affect a business. Ethical – what is regarded as morally right or wrong for a business to do?
These factors have a marked up effect on the business and immediate changes are seen in the market if these factors are changed. The Markets keep changing all the time. It does depend on the type of product the business produces, however a business needs to react or lose customers. Though a business does not want competition from other businesses, inevitably most will face a degree of competition.
Social Environment and Responsibility
In a country like India when we discuss business environment; the social factors and their impact on business are given due consideration. The Social change is when the people in the community adjust their attitudes to the way they live. The business also needs to be aware of their social responsibilities. A lot of variables should be taken into account if one should decide to do a business in a certain location. One variable to consider is to what degree a social environment of the business is conducive to the business success. Business will accumulate wealth only if the business ecosystem supports the growth of business. One aspects of business ecosystem is the social environment.
Social objectives are those objectives of business, which are desired to be achieved for the benefit of the society. No activity of the business should be aimed at giving any kind of trouble to the society. If business activities lead to socially harmful effects, there is bound to be public reaction against the business sooner or later.
Three important aspects of social environments are as mentioned below 1)
Values held by a community
Potential impact of interactions among subgroup in a community (accommodation, cooperation, assimilation, and conflict). 3)
Social change as influenced by globalization.
Social Class and Lifestyle
The improvement of level of education and the availability of good job for people have given the opportunity to people to move to a higher level of social class. People’s lifestyle may be the source of good business, especially if the purchasing power is high. The success of products in the market depend upon which target groups the products aims to. Therefore, understanding of the social class and its lifestyle would definitely help the success of business. Based on the social class and lifestyle the people are classified as given below:
The Upper class-Country Club Establishment
Small number of well-establish families
Belong to best country clubs and sponsor major charity events 3.
Serve as trustees for local learning institution or social institution. 4.
Prominent professionals (for examples: businessman, physician, engineers, and lawyers). 5.
May be head of major financial institution, owners of major long-established firms. 6.
Accustomed to wealth, so do not spend money conspicuously.
The Lower-Upper Class-New Wealth
Newly rich people
Successful business executive
Conspicuous users of their new wealth
The Upper-Middle Class Achieving Professionals
Have neither family status nor unusual wealth
Young successful professionals, corporate managers, and business owners 4.
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