Major Emphases of Sociological Enquiry in the Realm of Business Economics
Sociology and economics have been regarded as two distinct and diverse subjects in the realm of social sciences. Although both of these subjects are about understanding the society, sociologists and economists differ in a number of ways on a number of issues of debate. For example, sociological studies are more dependent on empirical research and often involve considerable amount of fieldwork and collection of data. On the other hand, economics is more dependent on theory based mathematical deductions, although economic implications are extensively examined in the realm of business and commerce. However, with the lapse of time, it has become increasingly clear that in order to obtain a holistic view of society, both sociological and economic information are necessary. Therefore, in the mid 20th century, several scholars started working on economic issues from strictly sociological perspective. In this way, economic entities like the household, the firm, and the government are now being looked into with relation to people and the society at large. Business organisations are particularly important because they can be though of as quasi-social structures that do not always strictly behave according as well established economic formulas, theories, and doctrines. Sociologists are now utilising a number of academic and research approaches to understand business entities more comprehensively. In this essay, the most important sociological approaches are discussed concisely.
According to Weber (1922), economic activities depend on three types of decisions. Rational decisions are well reasoned and most expected. Traditional decisions are those which are influenced by culture, practices, stereotypes, etc. Speculative-irrational decisions are those which are most difficult to predict and often incomprehensible with the help of standard economic theories. From a stricter point of view, even traditional decisions can be regarded as irrational in the sense that economic theories are insufficient to explain an individual’s infatuation for traditions even at the cost of economic well being. In the wake of these complexities, researchers have attempted to use sociological perspectives and empirical techniques to explain decisions taken by individuals or groups in a complex business environment.
In analyzing today’s industrial world, a society can be regarded as a complex structure of various substructures that cater to various human activities. So this complex lattice of different institutions can be perceived as to have developed a multifarious network inside it. (Nohria and Eccles 1992; Block 1990)
This gigantic multifarious network has smaller and diverse networks inside it, which are intricately interconnected with each other. And the networks approach of studying sociology can be applied to understand and analyze the links that establish these networks. These links connect corporations, individuals, industries and even entire economies. Consequently, the networks approach is somewhat supple since in this approach the sociologist has to recognize the uniqueness of each and every network entity, although these entities are deemed interdependent. (Nohria and Eccles 1992)
View of the society as an inter-network of networks puts emphasis on the need of quantitative analysis to understand social functions and activities. In this way, networks approach has emerged as a pillar of economic sociology. It facilitates the analysis of interconnections between organizations and individuals. (Burt 1983)
Markets approach attributes the study of sociology of markets. So in this realm of sociological enquiry, the whole emphasis is on the markets. Yet, unlike economists, sociologists have to understand that how other components of the society influence or interact with the markets. In the realm of economic discourse, sociology of markets has been widely recognized. Yet, mathematical models used by economists often neglect the complex sociological factors in understanding customer behaviour. (Block 1990; Barber 1977)
In the markets approach, phenomena related to the differential powers of various market agents are studied. Instead of labelling incomprehensibilities of customer behaviour as irrationalities, sociology of markets is aimed at explaining them with the help of socio-economic factors that are deeply entrenched in the society at large. (Burt 1982)