Strategic

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.

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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