Question

How do social factors affect business environment?

Answer 1

Effect of social factors on business environment:

• All the business activities originate, grow and end in the society. So naturally, society plays a major role in the environment it gives for the business activities.
• A business activity can never be separated from society. Society represents groups of people, social institutions, social traditions, etc.
• The society of a nation constantly evolves and hence is dynamic in nature. As a result, the lifestyle, preferences and practices also keep on changing. All these factors change the business environment too.
• Beliefs and ideologies of people cannot remain same throughout. So, with time people give importance to their decisions, ideologies and rituals to achieve their development.
• Before producing several type of products the producer needs to consider religion, caste, sect, social norms, ideologies, etc. that exists in a particular society. The decision for the economic activity will be largely affected by these parameters.
• For example, if the society is quite conservative with respect to clothing, then the producer should not produce very bold clothes else he will face loss.
• The society or a section of society which does not restrict itself to all these social constraint develops much faster. People of such societies are open to new ideas and are ready to accept new products. As a result, business activities have a higher chance to innovate and expand.