Socio-cultural Impact of the External Environment on

Organizations
The socio-cultural factors are the social and cultural factors and norms prevailing in a
society/organization. Managers should always be aware of the different types of norms, values or
beliefs that the customers possess or believe in. It is the organization’s responsibility to
continuously adapt to the changes that are outside its control, and in this case they are the socio-
cultural factors.

We need to understand that different generations have different preferences. Taking into
consideration the fashion industry, we realize that the fashion keeps on changing from generation
to generation. Forever 21, a clothing manufacturing business, is a great example of a fashion
industry that adjusted to the socio-cultural factors in the beginning but unfortunately lost their
momentum and ended up changing their unique style even though their customers preferred their
original unique designs. As a result, Forever 21 faced bankruptcy.

People used to prefer formal clothing over casual clothing way back, and now prefer clothes like
ripped jeans. The future norms and interests will definitely be astonishing and we might see an
increasing interest in fedora hats or something similar. Just like this, people’s beliefs, interests,
and values change overtime and organizations need to be vigilant of those changes. Ever since
people realized the trend of ripped jeans and started opting for it, the sales for normal jeans have
diminished. Most of the older generations, however, prefer normal jeans and the new generations
like Gen Z and Alpha prefer ripped jeans. The organizations that failed to adjust to this change
might have experienced a decrease or a loss in their sales of normal jeans and similarly, the
organizations that adjusted to the change and sold ripped jeans seemed to experience sweet
profits. Moreover, the clothing preferences in our country have changed significantly. People of
the older generations prefer wearing shalwar kameez in their everyday lives but it is the exact
opposite for the newer generations. In the future, it is possible that we might completely adopt
the western clothing style and if that happens, then the sales for the usual clothing will diminish.
Moving on, another example of a change in the preferences of consumers can be that of the
emergence of E-Commerce. Organizations that realized that the consumers desire their life to be
as convenient as possible introduced e-commerce such as online shopping, or online banking.
The organizations that took this opportunity were far ahead of the organizations that missed out
on it.

Netflix became well-known for its streaming services as the world started building an interest for
TV shows. Netflix shows socio-cultural influences by providing clips, films etc. that suit the
majority of the cultures. People from diverse cultures and practices with different ideals and
views all over the world watch from Netflix and get amused from what it offers. Netflix is
creative because it provides a free one-month trial to its customers. It is noticeable that those
who accept the deals make the decision to subscribe because the items provided by Netflix suit
their needs. An organization like Blockbuster, however, did not take into account the socio-
cultural influences because it sought to boost its returns by adopting huge prices. Therefore, it is
evident that only a few people would be able to afford it and it won’t be able to entertain a lot of
communities. Thus, Blockbuster lost in its competition against Netflix.

Grocery stores in some countries have introduced a self-checkout system for the convenience of
the customers and also because of the fact that people usually do not have time these days and
are busy. After recognizing that the consumers would find a self-checkout system more
convenient than the normal procedure, the grocery stores adapted to the consumer’s preferences
and attracted a number of customers. Therefore, the stores that did not introduce the self-
checkout system lost some of their customers to the stores that did adapt to the change.

Google also failed to consider the different types of culture and faced embarrassment because
their algorithm in Google Photos referred two African-American people as “gorillas”.

In 2015, a black software developer embarrassed Google by tweeting that the company’s Photos
service had labeled photos of him with a black friend as “gorillas”[ CITATION Sim18 \l 1033 ].
Google created an algorithm that would refer a being with big-sized nostrils as a “gorilla”. It is
obvious that this wasn’t intentional or racist in any way but Google failed to consider people
belonging to different communities and thus faced a really uncomfortable situation. In the end,
however, Google immediately fixed its algorithm and apologized to the community sincerely.
Thus, we can conclude by stating that socio-cultural factors are very crucial for an organization’s
progress and these factors affect the organizations significantly.

Bibliography
Simonite, T. (2018, November 01). When It Comes to Gorillas, Google Photos Remains Blind. San
Francisco, California, London. Retrieved from https://www.wired.com/story/when-it-comes-to-
gorillas-google-photos-remains-blind/