Socio- cultural environment

Another important external environment of the business is socio-cultural environment. The socio- cultural fabric is a very strong environmental force, the buying and consumption habits of the people, their language, beliefs and values, customs and traditions, taste and preferences, education are all factors that affect business. The socio-cultural forces should therefore, be properly analyzed and understood while formulation business strategies. Socio-cultural environment is made up of the social institutions, class structure, beliefs values, accepted patterns of behaviors, customs of the people, and their expectations. Culture is all pervasive. Business firms are no isolated entities. They are an integral part of the broader socio-cultural environment of the society. The influences of the cultural forces on business is just one side of the coin the other side is of course, the influence of business in bringing about cultural changes in the societies. The business firm has been acting as agents of cultural change. For instance, soap and detergent manufactures have changed the washing habits of people. Similarly, the cloth manufactures have changed the fashion and style. These are only some examples. There are many different ways through which firms exert influences on cultural values of a society. The social performance indicators of a country are important to business firms.