Social variables are divided into three categories: demographics, lifestyles, and social values. Demographic and lifestyle changes affect the composition, location, and expectations of an organization’s labor supply and customers. Social values underlie all other social, political, technological and economic changes and determine all the choices that people make in life.
Demographics: The demographics, or makeup, of the US population has undergone major changes since World War II. Although the population as whole is growing slowly, some segments of the population such as Hispanics and blacks are growing much faster than others. In fact, organizations are increasingly reflective of these demographics. From 1983 to 1993 the percentage of male, white professionals and managers in the workforce declined from 55 percent to 47 percent, while for white women, the percentage increased from 37 percent to 42 percent. According to the US Labor Department through the year 2005 half of all labor force entrants will be women and more than one third will be Hispanics, African Americans and other races.
Americans are also living longer; by 2010 the average life expectancy for men will be 74.4 years, as opposed to just 53.6 years in 1920. There have also been dramatic shifts in age structure that is, the relative sizes of different age groups. The “baby boomers” those people born between 1946 and 1964 account for more than a third of the country’s population, and as this cohort has grown up, society has naturally reflected its interest and demands. Moreover, despite the increase in fertility that occurred as the baby boomers became parents, the median age of the population continues to rise.
Why are these changes so important to managers? First, they affect the size of the labor supply. In recent years, for example, the relatively small number of teenagers has forced fast food restaurants and other traditional employers of teenagers to turn to retirees and women with families who want to reenter the workforce to fill their part time jobs. Meanwhile, the rising median age means that managers may face a shortage of skilled workers in the future once the baby boomers start to retire.
Second, changes in the makeup of the population create social issues that affect managers. Today, for example, many employees are finding themselves in the “sandwich generation” caught between the demands of caring for their own children and the need to help their aging parents. As a result, many major corporations, including IBM, Johnson & Johnson, and Mobil have set up special programs to help their employees deal with elder care. Third, demographics shape the markets for many products, as indicated by the baby boomers’ influence.
Lifestyles: Lifestyles are the “outward manifestations of people’s attitudes and values. In recent decades, change rather than stability has characterized Americans’ lifestyles. For examples, “traditional” families account for a shrinking proportion of US households. Fewer and fewer US families include married couples, and households consisting of single adults and one parent families are becoming more numerous.
Social values: In recent years, changing social values have affected our commitment to equality of opportunity and the regulation of industry altered our assessments of the costs and benefits of new technology such as life support systems for the seriously ill, and increased the social and economic expectations of consumers, women, and minorities.
Perhaps more important for managers is the way in which values affect our attitudes towards organizations and work itself. For example, employee participation in managerial decision making was once seen as simply a means of improving worker morale and productivity; now it is regarded by some observers as an ethical imperative.
Obviously general economic conditions and trends are critical to the success of an organization. Wages, prices charged by suppliers and competitors, and government fiscal policies affect both the costs of producing products or offering services and the market conditions under which they are sold. Each is an economic variable.
Common economic indicators measure national income and product, savings, investment, prices, wages, productivity, employment, government activities, and international transactions. All these factors vary over time, and managers devote much of their organizations’ time and resources to forecasting the economy and anticipating changes. Because economic change is now the norm rather than the exception, this task has become more complicated.
Will a government agency adopt a rigorous or a lenient stance toward the management of a company with which it is dealing? Will antitrust laws be rigidly enforced or ignored? Will government policy inhibit or encourage management’s freedom to act? These sorts of questions concern political variables and their answers depend largely on the nature of the political process and on the current political climate.
Technological variables include advances in basic sciences such as physics, as well as new developments in products, processes, and materials. The level of technology in a society or a particular industry determines to a large extent what products and services will be produced what equipment will be used, and how operations will be managed.
Major changes are on the horizon in the field of biotechnology, and Japanese corporations are mounting a powerful new challenge to American dominance in biotechnology products. Although we are only beginning to see the applications of this new technology, it is already a multibillion-dollar industry, with products ranging from genetically improved farm animals and grains to cancer treatments and biodegradable plastics. The real focus in this rapidly growing field, however, is a battle between Japan and the United States for prominence in research and development (R&D).