Social Influences on Business: Overview

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  • 0:00 Defining Social Influences
  • 0:39 External Social Influences
  • 2:38 Internal Social Influences
  • 4:35 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Internal and external sociological phenomena can present both threats and opportunities to a business. In this lesson, you'll learn how social factors can affect a business. A short quiz follows the lesson.

Defining Social Influences

We will take a sociological view at social influences. As you may know, sociology is the study of society, including its origins, organization, and social relations between two or more people. Changes in society, or even the nature of social relations within an organization, can dramatically affect a business, as we will see below.

Businesses are affected by external influences and internal influences. External influences come from outside the business in its external environment. Internal influences originate from within the business itself. Let's take a look at each.

External Social Influences

Social influence is one of several external factors that can influence a business. Other factors can include political factors, microeconomic factors, macroeconomic factors, and technological factors. In this lesson, we'll be looking just at social factors that influence a business.

Changes in general societal preferences, needs, and wants presents both threats and opportunities for a business, as we live primarily in a consumer-driven society. Changes in consumer preferences may destroy some businesses, propel other businesses to high profits, and provide opportunities to create new markets. For example, consider fashion changes. Double-breasted suits may have been in style for a couple of years, but then the social trend is for single-breasted suits. Clothing manufacturers will have to adjust.

A more problematic concept for some companies is when consumer preferences change due to changes in social values. For example, a focus on energy efficiency and good fuel mileage may severely harm a company whose focus is on gas guzzling trucks and SUVs, but the change may be a boon to new start-up companies manufacturing electric cars. In good economic times, consumers may be willing to indulge, and retailers may have a steep increase in profits. However, in bad economic times, consumers may shift to valuing savings rather than luxury. This will hurt retailers.

Businesses can try to influence consumer social values through the use of marketing and public relations. Marketing and advertising campaigns often create social trends. One just needs to look at the fashion industry for countless examples. Public relations campaigns can improve the image of your company if it is involved in a socially discouraged activity, such as serving fast food. For example, some fast food chains have voluntarily posted the nutritional information of their products for the consumer to read before purchasing and added healthier choices to their menus.

Internal Social Influences

Social factors originating from within a business are also important influences. Other factors that can influence a company internally include organizational structure and management structure. Again, we'll be looking only at social influences in this lesson.

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