How Social Factors Affect Corporate Strategy : PESTEL Analysis

Social factors like language, religion etc. affects different corporate strategies. Social factors include

 Make-up of population: e.g. growth rate, proportion of old and young people

Family structure and size; the importance (or lack of it) of the extended family and relationships with non family members; the extended family provides contacts and work.

 The role of women in the labor force and in society as a whole (expectations vary from society to society). In different cultures, gender stereotypes are more sharply drawn than in the industrialized west.

 Extent of social mobility: the degree of social stratification and difference within each society and whether people can move between them, the changes in size, wealth and/or status of different groups within the population and the geographical distribution of the population between regions and urban, suburban and rural areas. Cultural factors are identified in the diagram below.

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How Social Factors Affect Corporate Strategy

Social/cultural factors affect corporate strategy in several ways:
 They affect the market for products, e.g. religious proscriptions on food, financial services
 They affect promotional strategies, e.g. language of adverts, considerations of imagery and decency
 They affect methods of conducting business in countries, e.g. conventions of negotiation, giving and receiving of gifts, ensuring ‘face’ for contacts (i.e. maintaining self-respect and status)
 They affect methods of managing staff, e.g. language differences, attitudes to managerial authority
 They affect expectations of business conduct, e.g. extent of engagement with CSR, time horizon of investment, engagement in political matters.

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