Sociocultural environment continue to be dynamic and changing. Its factors also vary between community groups. Therefore, companies need to monitor these trends and consider their strategic implications.
Definition of a sociocultural environment
The sociocultural environment refers to trends and developments in changes in attitudes, behavior, and values in society. It is closely related to population, lifestyle, culture, tastes, customs, and traditions. These factors are created by the community and often are passed down from one generation to another.
Examples of critical sociocultural variables are:
Culture. Individual values and habits can change individuals through contact with specific cultures.
Habits that represent how to behave in response to a given situation.
Beliefs and values. Belief refers to how we feel about something or someone. Meanwhile, values are relatively long-standing beliefs and serve as guidelines for culturally appropriate behavior.
Number and growth of population. Increasing the population indeed provides more labor and demand for goods and services. On the other hand, it can lead to social problems such as crime and poverty, especially when employment is inadequate.
Age composition. In some countries, productive age populations dominate and provide opportunities for economic growth and demand for goods and services. However, countries like Japan, the elderly population dominates. It presents opportunities as well as challenges for the economy and companies there.
Geography. Populations may be concentrated in some geographical regions, for example, on arable agricultural land or in industrial areas.
Ethnicity. A country, like Indonesia, consists of a variety of different ethnic and ethnic groups. It has implications for various aspects such as language, culture, habits, and tastes.
Household and family structure. The population of a community can be broken down based on the number of children.
Employment, for example, the composition of white-collar workers vs. blue-collar workers.
Wealth and social class. People from different social classes can have different values that reflect their position in society.
How does the sociocultural environment affect business
Changes in several sociocultural factors may take years. However, some of them are changing faster and more dynamically, for example, thanks to technological developments.
Sociocultural factors continue to change. That has implications for the opportunities and threats that companies face. And finally, these changes also determine the company’s strategy that the company must choose.
Social and cultural change challenges companies to find more effective ways to adapt to stay ahead of their competitors.
For example, changes in age composition affect changes in patterns of demand for goods and services. As the elderly population begins to dominate, the need for health services and pensions increases.
Furthermore, changes in age composition also affect recruitment policies. Companies must face more elderly with reduced productivity.
Different sociocultural factors also influence business practices, policies, and activities.
Culture influences taste and lifestyle. Therefore, culture also influences the types of products and services that businesses must offer.
Also, human resource management may need to overcome cultural differences in recruitment. For example, some ethnic minorities have different body language, which may be difficult for interviewers to interpret.