13.2 The Implications of Social Structure

Individual-Oriented Social Structure

Individual-oriented societies encourage individual achievement and recognize the individual as the basic unit of society. Individuals can choose their career paths and set goals without consulting or asking anyone else’s opinion. This emphasis on individualism often translates into innovation and creativity from which the whole society can benefit. That is the main reason why places such as the United States, Europe, and other developed nations, where individualism is encouraged, see high level of innovative and entrepreneurial activities. Individualistic societies also encourage their members to rely only on their own abilities and improve their knowledge and skills so they can achieve their personal goals.

Business implications of an individualistic society are that in trying to advance their careers and succeed, individuals become more competitive in the workplace, which can be damaging to the overall morale. This desire to advance and make more money also encourages individuals to move from one company to another, which can also have a negative impact on the organization (Ehsanfar, 2019).

Group-Oriented Social Structure

Unlike individual-oriented societies, group-oriented social structure believes in relationships and emotional attachment. People in group-oriented cultures consider their actions to reflect the whole group, not just them; therefore, they value what others think about their choices.

Group-oriented culture is more about teamwork, and people in this culture are loyal to their employers and are most likely to stay with one employer for a long time, even for a lifetime. People from group-oriented societies, however, lack creativity (Ehsanfar, 2019).

Group primacy also lacks entrepreneurship. A recent study on the labour market and patent data by Katharina Hartinger (2023) of the Gutenberg School of Management confirms that individualism positively affects innovation. Earlier research also confirms the positive relationship between creativity and individualism (Goncalo & Staw, 2006).

Some argue that social structures based on individualism are great at innovative ideas, while social structures that identify with group primacy are better at implementing those ideas.

Social Stratification

All societies rank their people hierarchically into categories called social strata. The rankings are based on socioeconomic characteristics such as family background, wealth, power, education, and income (Cole, 2019, September 3).

Social strata represent the uneven distribution of resources in a society. Typically, those with access to a larger portion of resources are ranked as upper class and others with access to fewer and fewer portions of resources are ranked lower.

The business and economic implications of social stratification can be significant when members of a strata do not have the ability to overpower the barriers created by their social strata and move out of it. Low social mobility has a high cost for companies and for the overall economy.

Social Mobility

The term social mobility means the ability of individuals to change positions within a social stratification system. When people can move out of the strata into which they were born, they experience social mobility. For example, people who rise from poverty and become successful are deemed to have diminished their economic status in a way that affects their social class. They have experienced social mobility (Conerly et al., 2021).

Social mobility varies from one society to another, depending on the social stratification system in the society. The most rigid system of social stratification is the caste system, which is a closed system in which social mobility is not possible. In those societies with a class system, which is a less rigid form of social stratification, social mobility is possible. (Encyclopaedia Britannica, 2023.)

Caste System

A caste system is a closed system of social stratification, where the social standing is determined by the family to which the individual is born. It cannot be changed and is considered one’s fate in life. The caste system is diminishing in many societies; however, one example remains. In India, especially in rural areas. Even though the caste system has been abolished officially since 1949, after India gained independence from Britain, it declared and ratified its new constitution. The caste system determines what occupation a person can have and who he marries. It makes it impossible for people to marry someone outside their caste. A person who belongs to a certain caste must continue the line of work of his ancestors, regardless of his own interests, education, and skills.

Class System

A class system is an open form of social stratification based on multiple social rankings such as economic status, education, achievements, etc. A person born into a class is not bound by any customs or traditions and can move up or down in society, meaning they have vertical mobility. While many industrialized countries in Europe and North America have class systems, the social mobility within a class system also varies from one society to another. For example, the class system in the U.S. has a higher social mobility than the class system in the UK. Most of Britain’s decision-making institutions consist of graduates from Oxford and Cambridge universities. Those who attend those universities are usually individuals from the UK’s upper class and upper middle class. This practice makes it difficult for lower-class individuals to move up (Simon, 2023). In the U.S., there are many successful individuals who came from humble origins, like Bill Gates and Oprah Winfrey.

From a business perspective, the cost of doing business in societies with low social mobility can be very high and will affect business operations. For this reason, assessing social mobility becomes crucial when trading internationally. To address this issue, companies must incorporate appropriate strategies to their business planning. For example, in the UK, the hostility between upper- or middle-class managers and employees from the lower class makes it difficult for them to work well together. These hostile working conditions and a lack of cooperation result in low productivity and disputes. This makes it difficult to establish a competitive advantage in a global economy. Companies doing business in the UK will have to set aside extra financial and human resources for the special training of their management teams (Simon, 2023).

References

Cole, N. L. (2019, September 3). What is social stratification, and why does it matter? ThoughtCo. https://www.thoughtco.com/what-is-social-stratification-3026643

Conerly, T. R., Holmes, K., & Tamang, A. L. (2021). Introduction to sociology (3rd ed.). OpenStax. https://openstax.org/books/introduction-sociology-3e/

Ehsanfar, E. (2019, July 6). Individualism vs. collectivism. Rubeana. https://www.rubeana.com/2019/07/06/individualism-vs-collectivism/

Encyclopaedia Britannica. (2023). Social mobility. In Encyclopaedia Britannica. https://www.britannica.com/topic/social-mobility

Goncalo, J. A. & Staw, B.M. (2006). Individualism–collectivism and group creativity. Organizational Behavior and Human Decision Processes, 100(1), 96–109. https://doi.org/10.1016/j.obhdp.2005.11.003

Hartinger, K. (2023, September 27). Individualism, creativity, and innovation. Gutenberg School of Management and Economics & Research Unit. https://econpapers.repec.org/RePEc:jgu:wpaper:2313

Hill, C.W.L. (2022). International business: Competing in the global marketplace (14th ed.). McGraw Hill.

Simon, H. (2023, August 3). Modern challenges of the UK class system. Medium. https://medium.com/@simharuk/modern-challenges-of-the-uk-class-system-4ea4c49ffd39

Attributions

“13.2 The Implications of Social Structure” has adapted material from

• “Chapter 9. Social Stratification in Canada ” from Introduction to Sociology – 1st Canadian Edition by William Little and Ron McGivern, licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted;
• “Systems of Stratification” from Introduction to Sociology: Understanding and Changing the Social World by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted; and
• “9.2 Social Stratification and Mobility in the United States” from Introduction to Sociology 3e by OpenStax – Rice University is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.