The social environment includes the cultural norms and values as well as the political, economic, and religious elements surrounding a particular group. It is important to consider social environment when entering into a business negotiation because one’s social environment can greatly influence their negotiating technique and their ability to make an informed decision. By taking their social environment into consideration, you will be better equipped to negotiate a satisfying solution as well as establish a good working relationship for the future. Here are a few important social factors to keep in mind that can influence a negotiation.
The Financial Environment
The state of the local or global economy can greatly impact the way a negotiation plays out. It can be difficult to rely on previously established terms in an economy with currency fluctuations. Inflation and devaluation should always be considered when negotiating with other countries. It could be a risky move to negotiate a deal with a country that is experiencing economic instability. Conversely, it could be to your advantage to strike a deal with a financially stable partner.
Political Changes
A change of government or its policies can greatly influence decisions about purchases and investments. These changes could impact the way companies structure their production chain, supply, import, and how they must comply with employees as far as taxes and benefits. A country with political instability is a huge risk. On the other hand, a new trade opening of a country could present new challenges and opportunities for businesses.
Technology
Technology is constantly changing and evolving and with it comes new opportunities to help buyers, sellers, and investors run their businesses more efficiently. Therefore, it is to your advantage to stay up to date on these new technology platforms so your negotiations are not adversely affected.
Socio-Cultural Elements
The world is entering a new and powerful era of acceptance and progressivism of various socio-cultural aspects. Every day there are new views on gender, race, and religion and there are new standards by which these elements need to be addressed and accepted. This can have a huge impact on the expectations and behavior of consumers in certain markets so you need to be aware of and sensitive to these socio-cultural elements when entering into business negotiations.