the fit thesis sociology

The Functionalist Perspective on the Family

Table of Contents

Last Updated on October 4, 2023 by Karl Thompson

Functionalists see the family as one of the essential building blocks for stable societies. They tend to to see the nuclear family as the ideal family for industrial societies and argue that it performs positive functions such as as socialising children and providing emotional security for parents.

There are two main Functionalist theorists of the family: George Peter Murdock and Talcott Parsons.

Murdock argued that the nuclear family was universal and that it performed four essential functions: stabilising the sex drive, reproduction, socialisation of the young and economic production. (Obviously this has been widely criticised!)

The Functionalist Perspective on the Family: Overview

This post covers:

The Functionalist View of Society

Functionalists regard society as a system made up of different parts which depend on each other. Different institutions perform specific functions within a society to keep society going, in the same way as the different organs of a human body perform different functions in order to maintain the whole.

George Peter Murdock – Four essential functions of the nuclear family

George Murdock was an American Anthropologist who looked at 200 different societies and argued that the nuclear family was a universal feature of all human societies. In other words, the nuclear family is in all societies!

1. Stable satisfaction of the sex drive – within monogamous relationships, which prevents sexual jealousy. 2. The biological reproduction of the next generation – without which society cannot continue. 3. Socialisation of the young – teaching basic norms and values 4. Meeting its members economic needs – producing food and shelter for example.

Criticisms of Murdock

Talcott parsons –  functional fit theory.

Parsons has a historical perspective on the evolution of the nuclear family. His functional fit theory is that as society changes, the type of family that ‘fits’ that society, and the functions it performs change. Over the last 200 years, society has moved from pre-industrial to industrial – and the main family type has changed from the extended family to the nuclear family. The nuclear family fits the more complex industrial society better, but it performs a reduced number of functions.

The extended family consisted of parents, children, grandparents and aunts and uncles living under one roof, or in a collection of houses very close to eachother. Such a large family unit ‘fitted’ pre-industrial society as the family was entirely responsible for the education of children, producing food and caring for the sick – basically it did everything for all its members.

I really like this brief explanation of Parson’s Functional Fit Theory:

Two irreducible functions of the family

Primary socialisation.

An important part of socialisation according to Functionalists is ‘gender role socialisation. If primary socialisation is done correctly then boys learn to adopt the ‘instrumental role’ (also known as the ‘breadwinner role) – they go on to go out to work and earns money. Girls learn to adopt the ‘expressive role’ – doing all the ‘caring work’, housework and bringing up the children.

The stabilisation of adult personalities

Criticisms of functional fit theory, the positive functions of the family: a summary.

Criticisms of the Functionalist perspective on the family

It is really important to be able to criticise the perspectives. Evaluation is worth around half of the marks in the exam!

Downplaying Conflict

Being out of date, ignoring the exploitation of women.

Functionalists tend to ignore the way women suffer from the sexual division of labour in the family. Even today, women still end up being the primary child carers in 90% of families, and suffer the burden of extra work that this responsibility carries compared to their male partners. Gender roles are socially constructed and usually involve the oppression of women. There are no biological reasons for the functionalist’s view of separation of roles into male breadwinner & female homemaker. These roles lead to the disadvantages being experienced by women.

Functionalism is too deterministic

A level sociology families and households revision bundle.

The bundle contains the following:

Signposting and Related Posts

It is usually followed and critiqued by the Marxist perspective on the family and Feminist Perspectives on the family.

References and Sources for Further Reading

Robb Webb et al (2015) AQA A Level Sociology Book 1, Napier Press. ISBN-10: 0954007913

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Industrialisation and the Family

Last updated 26 Sept 2019

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The classic sociological theory about the link between families and the economy is the debate about the impact of industrialisation on the family, and particularly Talcott Parsons’ theory that industrialisation led to the development of the nuclear family.

While sociologists today are more interested in more contemporary economic change, such as the impact of globalisation, we should look at this classic debate.

Talcott Parsons (1951) argued that the process of industrialisation led to huge changes in both the structure and the role of the family and the roles of family members.

Industrialisation is the process whereby the economy shifted from being based largely around agriculture to being based on industry and manufacturing. In the UK, this processes happened rapidly, particularly in the 18 th and 19 th centuries, as the industrial revolution . Alongside industrialisation there was a closely-related process of urbanisation . This is the process where people move from rural communities into towns and cities, resulting in the rapid growth of those towns and cities.

Such massive social change inevitably impacts on the family, but Parsons argues that it was transformative: it created the nuclear family.

Parsons, as a functionalist , believes that the institutions in society work together like the organs in the human body in order for society to work properly. Therefore, when there is social change, other institutions also have to change to ensure there is a functional fit : that the institutions fit society as it is, rather than as it was. For Parsons, the pre-industrial, agrarian society was populated with extended families . There was a functional fit between the extended family and the rural economy. Where people worked the land, the more family members to lend a hand the better: aunts, uncles, cousins and numerous children were economic assets. Everyone who was fit and able in the family had to be economically active, and so the presence of older relatives provided essential services in terms of childcare, education and healthcare. Families remained in the same communities and on same land for generations, and so there was no requirement to be geographically mobile to seek work, so a large family was not a burden.

However, when people started moving from rural areas into towns and cities, in order to get jobs in factories and mills, this all changed. Work and home were now separated. Families needed to be geographically mobile: they could not take large numbers of dependents and extended family with them into the city. There was paid work for men in the factories and mills, and so a clear gender division of labour emerged, with women staying at home to look after the children and the house. Increasingly the state took over many of the roles of the family listed by Murdock, leaving the family with the two irreducible functions previously referred to.

According to Parsons, this social change precipitated a clear change in the family from extended families with many functions, in the pre-industrials society, to privatised nuclear families with fewer functions in industrial society.

Why nuclear families have a functional fit with industrial society

Nuclear families allow for:

• Geographical mobility (families can move to where the work is)
• Social mobility or meritocracy . Parsons argues that individual status in pre-industrial society was ascribed (you were born into a particular status) whereas in industrial society people could achieve a new status through hard work. In extended families, social mobility can lead to inter-generational conflict, but this is less of a concern when families are “privatised” as small independent units. Both these forms of mobility are facilitated by the isolated nature of the nuclear family.
• Specialised roles . In nuclear families, in industrial societies, men and women have separate specialised roles (according to Parsons). He writes about men being instrumental leaders and women being expressive leaders and this being the most effective division of labour for industrial society. We will return to this in the section on gender roles.

Evaluating Parsons on industrialism and the family

• The principle difficulty with Parsons theory is that historians do not agree that the changes in the family described by Parsons actually match what really happened.
• Peter Laslett (1972) conducted research into pre-industrial families in his famous work of social history The World We Have Lost . He found that the most common family form in the pre-industrial communities he studied was not the extended family but the nuclear family. People may well have lived close to extended family and worked together, but in terms of their households, most were made up of parents and children.
• Furthermore, Michael Anderson (1971) looked at households in Preston in the midst of rapid industrialisation and urbanisation (using the 1851 census) and found a significant increase in the number of households made up of extended families. A rational response to moving from rural areas into the city was to move in with family. This helped economically, but also socially as – unlike the rural communities they had moved from – these were neighbourhoods where people did not know each other and so kinship connections were very valuable.
• Parsons is criticised, then, for being an armchair theorist. His theory seems quite logical, but had he engaged in extensive empirical research into the question he may well have found evidence that undermined his theory. Indeed, if his data had replicated the findings of Laslett and Anderson, he might have had to turn his theory entirely on its head.
• Having said that, the common family form when Parsons was writing was certainly the privatised nuclear family and there certainly were more extended families in the past. So family structures and roles had changed and the major social change of the era was industrialisation, so it does not seem unreasonable to make a connection. However, it would seem that Parsons had failed to detect the precise nature of the relationship.
• In truth, what this array of research and evidence would appear to show is that there has always been rather more family and household diversity than Parsons’ theory would suggest.
• There are also strong criticisms of the way Parsons presents the nuclear family as ideal (and an ideal which society evolves towards) and also the of Parsons’ explanation of gender roles (which will be discussed in more detail in the appropriate section).
• Nuclear Family
• Industrialisation
• Extended Family
• Modified Extended Family

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Functionalist Perspective on the Family

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Functionalists view the family as a vital institution that performs essential functions for society. These include socializing children, providing emotional support, contributing to economic stability, and offering a sense of belonging for its members.

Key Takeaways

• Functionalists believe that the institutions that make up societies have roles beneficial and essential to them. Family is one example of such an institution.
• Functionalists perspectives on the family hold that families perform functions such as socializing children, providing emotional and practical support, regulating sexual activity and reproduction, and providing social identity.
• Prior to the Industrial Revolution, family members tended to perform productive tasks that were differentiated by sex and age. However, the emergence of factory labor shifted this dynamic, provoking families to serve complementary roles in providing support for workers.
• Murdock argued that families consist of instrumental and expressive roles. Instrumental roles provide financial support and establish family status, while expressive roles involve providing emotional support and physical care.
• Parsons devised the functional fit theory of the family, and argued that nuclear families, although performing a narrower scope of functions than those of the past, were essential to socializing members and stabilizing adult personalities through the emotional security of marital relationships.

The Functionalist View of Society

Functionalism is what sociologists call a structural-consensus theory. By structural, sociologists mean that functionalists argue that there exists a social structure that shapes individual behavior through the process of socialization.

Functionalists believe that a successful society is based on value consensus , where people agree about shared norms and values . In this way, people can join forces in society to cooperate and work toward shared goals (Holmwood, 2005).

Functionalists posit that successful societies have a stable social structure in which different institutions perform unique functions that contribute to the maintenance of all of society. This is similar to how different organs in the body perform different functions to keep an animal alive.

Functionalists assume that each of these institutional organs does things that are beneficial, or even essential, for the individual and society.

Thus, the essence of the functionalist view of the family is that the family performs several essential functions for society.

Families socialize children, provide emotional and practical support for their members, regulate sexual activity and reproduction, and provide members with a social identity.

A corollary of this essentialist view of the family is the belief that a sudden or far-reaching change to family structure or processes threatens the stability of the institution of family in itself, potentially weakening society (Holmwood, 2005).

Functions of the Family in Pre-Industrial Society

Pre-industrial families (before factories) — meaning those from the 17th to 19th centuries — tended to have large numbers of children. Economies in pre-industrial society were dominated by family-based economies — what Siskind (1978) calls the kinship mode of production .

Typically, all family members worked at productive tasks differentiated by sex and age. The family itself would have consisted of a structure, such as a head of household, their spouse and children, the head’s parents and possibly ancillary relatives.

Together, this unit worked productively, producing the things needed to sustain the family’s survival. The kinship relation, in this time, represented a binding obligation to work for the subsistence of the family.

In the pre-industrial era, marriages were arranged largely for social and economic purposes, rather than for romantic love. Marriage served as a contractual agreement based on a specific division of labor.

Although people would generally attend to their assigned roles within family units, these tasks may have been flexible, depending on the needs of the family.

The tasks and the needs that the family structure could fulfill in pre-industrial society included:

Being a unit of production

Caring for the young, old sick and poor

The primary socialization and control of children

The education of children

Murdock’s Four Functions of the Nuclear Family

The nuclear family is a family that consists of 2 generations: a parental married couple and their kin.

In 1949, the sociologist George Murdock conducted a survey of 250 societies and determined that there are four universal residual functions of the nuclear family: sexual, reproductive, educational, and economic.

Murdock considered the family to regulate sexual relations between adults, ensuring that they are controlled and socially acceptable. While Murdock did not deny the existence of sexual relationships outside of marriage, he considered family to be the socially legitimate sexual outlet for adults.

Murdock believed that stable satisfaction of the sex drive within monogamous heterosexual relationships would prevent sexual jealousy (Murdock, 1949).

2. Reproduction

This sexual function of the family gives way to reproduction, which, Murdock argues, is necessary for ensuring the survival of society.

3. Socialization

The family plays a vital role in training children for adult life. The family, as a primary agent of socialization and enculturation, teaches young children ways of thinking and behaving that follow social and cultural norms, values, beliefs, and attitudes.

Parents, through teaching their children manners and civility, reflect themselves in their offspring (Murdock, 1949).

4. Economic Needs

Additionally, parents teach children gender roles. Murdock argued that these gender roles are an important part of the economic function of the family.

Murdock thought of each family as having a division of labor that consists of instrumental and expressive roles . Instrumental roles are those that provide financial support and establish family status, which Murdock purported were taken on by men.

Expressive roles typically involve work inside of the family, providing emotional support and physical care for children.

Functionalists consider this gender differentiation of roles to be an essential part of the family, because they ensure that the family is well-balanced and coordinated. When family members move outside of these roles, Murdock believes that the family is thrown out of balance and at risk of collapse if not recalibrated.

For example, suppose a father decides to quit his job in favor of caring for children during the daytime. In that case, the mother must take on an instrumental role, such as getting paid employment, in order for the family to maintain balance and function (Murdock, 1949).

Parsons: Functions of the Nuclear Family

According to Parsons (1951), although the nuclear family performs functions that are reduced in comparison to what it did in the past, it is still the only institution that can perform the core functions of primary socialization and the stabilization of adult personalities.

1. Primary Socialization

Primary socialization refers to the early period in a person’s life where they learn and develop themselves through interactions and experiences around them. This results in a child learning the attitudes, values, and actions appropriate to individuals as members of a particular culture.

This socialization is important because it sets the groundwork for all future socialization. For example, if a child sees their mother denigrating a minority group, the child may then think that this behavior is acceptable, provoking them to continue to have this opinion about minority groups (Parsons, 1951).

Functionalists stress gender role socialization as a vital part of primary socialization. If primary socialization is done correctly, functionalists believe, boys learn to adopt the instrumental role in a family, provoking them to go to work and earn wages.

Meanwhile, girls learn to adopt an expressive role, provoking them to do care work, housework, and bring up children (Parsons, 1951).

2. The Stabilization of Adult Personalities

Parsons argued that the traditional family provides emotional support and stress relief for its adult members (particularly the husband after a workday).

This “warm bath” of relaxation helps maintain societal order by preventing disruptive behavior.

The stabilization of adult personalities, otherwise known as “warm bath theory,” emphasizes the emotional security found within marital relationships. This stabilization serves to balance out the stresses and strains of life faced by most adults.

In addition, the stabilization of adult personalities within marriage allows adults to act on the child-like dimension of their personality by playing with their children, using their toys, and so forth (Parsons, 1951).

Another factor that aids the stabilization of adult personalities is the sexual division of labor within nuclear families. Within isolated nuclear families, people are allocated particular roles in order to allow the unit to function correctly.

There are the aforementioned expressive and instrumental roles (Parsons, 1951).

Parsons: Functional Fit Theory

Talcott Parsons (1951) maintained a functional fit theory of the family and devised a historical perspective on the evolution of the nuclear family.

According to functional fit theory, the type of family that fits a society’s structure, and the functions it performs, change as societies change.

For example, from the 17th to 20th centuries, as Western societies industrialized, the main family type changed from the extended to the nuclear family.

The nuclear family is indicative of greater shifts in the structure of society, and how people subsisted within it. Labor becomes decentralized and specialized, with workers in industrial plants taking on small tasks.

The emergence of factories allowed items that were once made by hand or within families, such as canned goods and clothing, to be manufactured on a mass scale. The family unit no longer needed to account for the large undertaking of self-sufficiency.

Instead, instrumental family members could earn wages which other members could then use to buy necessities. As young children could not contribute to this wage system in the same way that they could to, say, a farm, the need for large families to carry out labor lessened.

Additionally, declining infant and childhood mortality gave rise to the expectation that most children would live to adulthood.

Out of these broad-level societal changes came the nuclear family, which suited more complex industrial society better, but performed a reduced number of functions. This smaller, nuclear family unit suited the need of industrial societies for a mobile workforce, one that could move to find work in a rapidly changing and growing economy.

Additionally, the need for extended family lessened as more and more functions, such as education and healthcare, were gradually subsumed by the state (Parsons, 1951).

Criticisms of the Functionalist Perspective on the Family

The possibility that other institutions could perform the functions of the family. For example, a school or workplace may provide daycare services, or government subsidies may help a family stay afloat instrumentally.

Murdock assumes that all nuclear families function well, ignoring families that are dysfunctional despite the presence of both instrumental and expressive roles.

Feminist sociologists posit that Murdock’s argument that the family is essential is ideological, and that traditional family structures typically disadvantage women.

Parson’s view of the instrumental and expressive roles of men and women may have applied during the 1950s, but is now out of date. Women now go out to work and the biological roles as set out by Parsons no longer apply as clearly.

Anthropological research shows that there are some cultures that do not fit the traditional model of the nuclear family. One such example is that of the Nair, a group of Indian Hindu castes, who lived historically in large family units called Tharavads that housed the descendants of one common female ancestor.

The marriage customs among this group have evoked much discussion and controversy among Indian jurists and social scientists (Panikkar, 1918).

Some functionalist sociologists disagree with Parson’s idea that the nuclear family only performs basic instrumental and expressive functions. Fletcher (1988), for example, argues that the family carries out three essential functions that no other social institution can.

These are the long-standing satisfaction of the sexual and emotional needs of parents, having and rearing children in a stable environment, and the provision of a common residence where all family members can return after work or school.

However, Fletcher argues that the family also retains its education, health, and welfare function. Child-rearing and socialization in families are made more effective by state institutions offering resources such as prenatal care, health clinics, doctors, social workers, schools and teachers, and housing officers.

He notes that most parents take primary responsibility for their children’s health – such as by teaching them hygiene and caring for and treating minor illnesses.

Additionally, parents can guide and encourage their children on an educational and occupational level, as well as provide material and welfare support, well beyond childhood. Children often reciprocate these supports when their parents enter old age.

Fletcher, while acknowledging that the nuclear family has largely lost its economic function of production, highlights that it has shifted into a major unit of consumption.

Families spend a large proportion of their income on home or family-oriented consumer goods.  Willmott and Young (1975) suggest that this can motivate family members to earn as much as possible.

Historians have suggested that Parson’s interpretation of the functions of the family was overly simplistic. These historians have noted the evidence suggesting that industrialization follows different historical patterns in different industrial societies.

For example, in Japan, industrialization stresses the importance of holding a job for life with the same company, and employees are encouraged to view their colleagues as part of an extended family. This extends the kinship network (Jansenns, 2002).

Chambers, D., & Gracia, P. (2021). A sociology of family life: Change and diversity in intimate relations . John Wiley & Sons.

Crano, W. D., & Aronoff, J. (1978). A cross-cultural study of expressive and instrumental role complementarity in the family. American Sociological Review , 463-471.

Fletcher, R. (1988). The Shaking of the Foundations: family and society . Routledge.

Holmwood, J. (2005). Functionalism and its Critics. Modern social theory: An introduction , 87-109.

Janssens, A. (2002). Family and social change: The household as a process in an industrializing community (No. 21). Cambridge University Press.

Murdock, G. P. (1949). Social structure .

Panikkar, K. M. (1918). Some Aspects of Nayar Life. The Journal of the Royal Anthropological Institute of Great Britain and Ireland, 48, 254-293.

Parsons, T. E., & Shils, E. A. (1951). Toward a general theory of action .

Siskind, J. (1978). Kinship and mode of production. American Anthropologist, 80 (4), 860-872.

Young, M., & Willmott, P. (1975). Michael Gordon,” The Symmetrical Family”(Book Review). Journal of Social History, 9 (1), 120.

Davis-Moore Thesis: 10 Examples, Definition, Criticism

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The Davis-Moore thesis is a sociological theory that posits that social stratification , or the division of society into hierarchical levels, is an inevitable and necessary feature of any complex society. 

Developed by American sociologists Talcott Parsons and Kingsley Davis in the 1940s and later expanded upon by William J. Moore, the thesis argues that social inequality is natural and functional for society.

Researchers believe social inequality plays a crucial role in society by incentivizing the most talented and skilled individuals to be rewarded based on their abilities, thus promoting a healthier and more prosperous overall community.

The thesis proposes that jobs that require more remarkable skills and have a more significant societal impact—such as doctors, lawyers, and scientists—should be paid higher salaries than less-skilled jobs, such as janitors and factory workers.

The Davis-Moore thesis has been a subject of much debate and criticism in sociology, but it remains an influential and widely cited theory in the study of social stratification.

Definition of Davis-Moore Thesis

The Davis-Moore thesis is a sociological theory that asserts that social stratification is a functional necessity, as it ensures the allocation of individuals into social positions according to their abilities and qualifications.

According to Macionis and Plummer (2012),

“…the Davis – Moore thesis implies that a productive society is a meritocracy , a system of social stratification based on personal merit” (p. 202). 

Sernau (2019) states that “stratification is universal, occurring in all societies, because it is necessary and inevitable, resulting from the need for a working social order” (p. 31).

The Davis-Moore thesis posits that individuals with more skills, knowledge, and education are more valuable to society and, thus, should be rewarded with higher social status , prestige, and income. 

This differential treatment motivates individuals to strive for excellence in their chosen fields, acquire new skills and knowledge, and perform critical social roles , contributing to society’s overall well-being.

So, in simple terms, the Davis-Moore thesis proposes that social stratification is an inevitable feature of any complex society and serves a functional purpose.

10 Examples of Davis-Moore Thesis

• Education : The Davis-Moore thesis proposes that education is correlated to social status, with higher educational attainment often leading to a more decent place in society. After all, those who have gone the extra mile and pursued further studies are usually better equipped for influential social roles within their communities.
• Income inequality : The Davis-Moore thesis maintains that income inequality is both expected and obligatory in our society. Its argument states that highly paid people have attained higher levels of education, skills, and knowledge, enabling them to complete essential social tasks more competently than others.
• Professional sports : The Davis-Moore thesis posits that professional athletes often receive some of the highest compensations in society thanks to their remarkable skills and abilities. Such a high income rewards these athletes’ invaluable contributions – entertaining people and igniting motivation in others – to our community.
• Military service : The Davis-Moore thesis would argue that military personnel occupies a high status in society because of their vital role in defending the nation and maintaining social order.
• Medical professions : Doctors, nurses, and other medical professionals are often seen as occupying high-status positions in society because of their specialized knowledge and skills.
• CEO compensation : The Davis-Moore thesis would suggest that CEOs of large companies are among the highest-paid individuals in society because of their essential role in guiding the strategic direction of their organizations and ensuring their long-term success.
• Political leadership : According to the Davis-Moore thesis, those who occupy political leadership positions are not just randomly chosen – they must possess remarkable abilities and be capable of motivating others. These individuals have outstanding skills, knowledge, and charisma that make them uniquely qualified to guide their peers effectively.
• Scientific research : The Davis-Moore thesis would suggest that scientists who make essential discoveries or contribute to the advancement of knowledge occupy high-status positions in society because of their valuable contributions to humanity’s collective knowledge.
• Creative professions : Artists, musicians, and writers are often seen as occupying high-status positions in society because of their unique skills and talents that allow them to produce works of art and literature that entertain and inspire others.
• Entrepreneurship : The Davis-Moore thesis would predict that successful entrepreneurs occupy high-status positions in society because of their innovative ideas, risk-taking behavior, and ability to create new businesses and generate wealth.

Origins of the Davis-Moore Thesis

The Davis-Moore thesis was developed in the mid-twentieth century by two American sociologists Talcott Parsons and Kingsley Davis. 

Davis’ groundbreaking article, “The Theory of Social Stratification,” was published in the  American Sociological Review  in 1940 and set the stage for Parsons to develop these ideas further. His magnum opus on this topic, The Social System , was released nearly a decade later in 1951 (Hauhart, 2003).

The origins of the Davis-Moore thesis can be traced back to earlier work in functionalist sociology, which emphasized the importance of social institutions in maintaining social order and stability.

This viewpoint considered social stratification an essential part of our world since it provided recognition to those with high skills and capabilities in return for their meaningful contributions to society (Berberoglu, 2017).

Davis and Moore built upon this functionalist perspective by arguing that social stratification was inevitable and beneficial for society.

They argued that social inequality encouraged individuals to acquire the skills and knowledge necessary to perform critical social roles while incentivizing them to work hard and contribute to society’s overall well-being.

Social Stratification vs. Social Differentiation

Social stratification implies that individuals are placed into distinct classes based on their economic and social power. In contrast, social differentiation pushes the idea that people’s talents and traits impact which vocations they are suited for.

Social stratification systematically arranges individuals and groups into hierarchical categories based on social status, power, and wealth (Macionis & Plummer, 2012).

In contrast, social differentiation refers to how people and groups develop distinct characteristics, including capabilities, knowledge base, and values.

Social differentiation can arise through various means, such as education level, career path, cultural background, and gender.

However, social stratification is primarily based on an individual’s positioning within the societal ladder and typically depends upon financial standing, educational attainment, and vocation (Umanailo et al., 2020).

Social differentiation can lead to differences in status, power, and wealth, but these differences are not necessarily hierarchical or unequal.

In contrast, social stratification is characterized by a systematic and unequal distribution of resources and rewards across different social positions (Umanailo et al., 2020).

So, unlike social differentiation, a less structured form of separation, social stratification has rigid hierarchies where resources are unequally distributed among different social ranks.

Why Is Social Stratification Necessary?

According to the Davis-Moore thesis, social stratification is both necessary and inevitable in modern societies since it helps motivate individuals, allocate talents, entourage education, and maintain social order. 

Here are some of the key reasons why social stratification is necessary:

• Motivation: The unequal distribution of rewards motivates individuals to acquire the skills and knowledge necessary to occupy higher positions in the social hierarchy. It, in turn, leads to greater productivity and innovation in society.
• Allocating Talent: Social stratification allows society to allocate talent and resources where they are most needed (Berberoglu, 2017). Individuals who possess valuable skills and knowledge are rewarded with higher positions in the social hierarchy, which allows society to benefit from their talents and abilities.
• Encouraging Education and Training: The presence of social stratification incentivizes people to dedicate themselves to education and training, as these skills are often crucial in obtaining the competencies and expertise needed to attain higher positions in the social structure.
• Maintaining Social Order : Social stratification is crucial for keeping society in order. It provides a structure of power and authority that makes it easier to comprehend one’s place within the social hierarchy while emphasizing individual rights and obligations (Umanailo et al., 2020). As such, this system enables citizens to understand their roles better and what they are entitled to or expected of them.

So, the Davis-Moore thesis professes that social stratification is essential for a functioning society.

Though one may view the unequal distribution of rewards as unjust, they argue it encourages individuals to obtain skills and knowledge needed to benefit their communities.

Criticism of Davis-Moore Thesis

The Davis-Moore thesis has been severely contested due to its assumption that merit alone determines social ranking and for disregarding the considerable power of social systems as well as institutions.

Here are some of the key criticisms of the Davis-Moore thesis:

• Not all rewards are based on merit : The Davis-Moore thesis suggests that prizes are allocated based on an individual’s talent and contributions to the public. Sadly, however, many rewards remain available due to external factors such as social class, skin color, and gender rather than genuine merit (Hurst et al., 2020).
• Ignores the role of power : This theory fails to analyze the role of power in constructing social stratification, overlooking the fact that those who possess higher positions have more authority and sway. Consequently, this allows them to sustain their status and restrict others from rising through the ranks.
• Overemphasizes the benefits of social stratification : According to the Davis-Moore thesis, social stratification is required and positive for society. Yet, this viewpoint has been criticized as it overlooks the potentially damaging consequences of unequal distributions of wealth, such as poverty, criminal behavior, and civil unrest.
• Ignores the role of social institutions : The Davis-Moore thesis overlooks the influence of social institutions, like the education and media sectors, in shaping social stratification. These institutions can reinforce and maintain social inequality instead of advancing meritocracy.
• Has inadequate empirical evidence : Critics have contended that the Davis-Moore thesis lacks sufficient empirical evidence, despite offering a theoretical framework for comprehending social stratification. The theory has been criticized for needing more practical support (Hauhart, 2003).

These criticisms highlight the pitfalls and oversights of the Davis-Moore thesis, thereby indicating that further research is needed to understand social stratification better. 

The Davis-Moore thesis proposes that social stratification is an inevitable and necessary feature of any complex society. It ensures that individuals are allocated to social positions according to their abilities, talents, and qualifications. 

According to the thesis, social inequality significantly impacts society as it motivates capable and skilled individuals to be acknowledged and rewarded for their abilities, ultimately contributing to the well-being and prosperity of the community.

Despite the ongoing controversy and debates surrounding this idea in sociology, it remains prominent and frequently referenced when analyzing social stratification.

The Davis-Moore thesis has provided several examples of high-status societal positions based on individual meritocracies, such as political leadership, medical professions, and successful entrepreneurship. 

 The Davis-Moore thesis continues to inform ongoing debates about social inequality and its role in shaping society.

Berberoglu, B. (2017).  Social theory: Classical and contemporary – a critical perspective . Routledge, an Imprint of the Taylor & Francis Group.

Hauhart, R. C. (2003). The davis-moore theory of stratification: The life course of a socially constructed classic.  The American Sociologist ,  34 (4), 5–24. https://www.jstor.org/stable/27700363

Hurst, C. E., Fitz, H. M., & Nurse, A. (2020).  Social inequality: Forms, causes, and consequences . Routledge.

Macionis, J. J., & Plummer, K. (2012).  Sociology: A global introduction  (5th ed.). Pearson/Prentice Hall. (Original work published 1997)

Sernau, S. R. (2019).  Social inequality in a global age . Sage Publications.

Umanailo, M. C. B., Umanailo, A. R., & Umanailo, A. D. S. (2020). Stratification and differentiation in the social life. In  SSOAR . SSOAR. https://nbn-resolving.org/urn:nbn:de:0168-ssoar-73973-5

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Talcott Parsons 'Functional Fit' theory

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• Created on: 24-10-12 19:24
• Families and households

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• DOI: 10.5153/sro.2598
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Social Stratification, Gender and Sport Participation

• Published 1 May 2012
• Sociological Research Online

14 Citations

Social stratification of leisure time sport and exercise activities: comparison of ten popular sports activities, the relationship between types of sport participation andsocio-economic characteristics of adults, "trapped": gender, identities and pe, neither class nor status: arts participation and the social strata, influence of sociocultural factors on the development of sports, nonparticipation or different styles of participation alternative interpretations from taking part, class dis-identification, cultural stereotypes, and music preferences: experimental evidence from the uk, cultural engagement across the life course: examining age–period–cohort effects, parental perceptions of youths’ desirable characteristics in relation to type of leisure: a multinomial logistic regression analysis of martial-art-practicing youths, cultural engagement and the economic performance of the cultural and creative industries: an occupational critique, 25 references, the impact of socioeconomic position on sport participation among south australian youth., sport and social class, cultural practices, age and the life course, cultural capital and the place of sport, an examination of social physique anxiety with regard to sex and level of sport involvement, is there a status order in contemporary british societyevidence from the occupational structure of friendship, pierre bourdieu's "masculine domination" thesis and the gendered body in sport and physical culture, the dimensionality of stratification-related cultural practices in australia, a theory of sport and politics, effects of socioeconomic status on the physical activity in adolescents: a systematic review of the evidence, related papers.

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Planet Fitness: Extensive Runway To Deploy Funds, But At Sub-Par Rates Of Return

• Planet Fitness is a differentiated offering in the large-scale gym and leisure space.
• PLNT boasts a broad network of stores and a significant member base, with ongoing global expansion plans.
• Despite the fact management has an extensive runway to deploy capital on, the headwind is at what rates it will earn on these investments against opportunities of equal risk.

Pgiam/iStock via Getty Images

Investment Thesis

Planet Fitness ( NYSE: PLNT ) is a leading franchisor and operator of fitness centers that could benefit from the growing demand for affordable and accessible fitness solutions.

PLNT has achieved significant growth in its membership base and store footprint over the years, given its slightly differentiated model that attracts a more unique gym 'customer'. The company operated ~2,600 stores across at the end of Q. Its footprint is in all 50 states, Puerto Rico, Canada, Panama, Mexico, and Australia. Of these, 2,341 are franchised and 258 are corporate-owned.

TradingView

It has ~19.6mm members who pay as little as $10 per month (although, the business recently implemented some pricing changes which we'll talk about) and has contractual commitments to open ~1,000 new stores, illustrating the runway the management can deploy funds over into the future.

The stock has cycled in '24 and is flat on the year, plus with Q2 earnings just around the corner, I wanted to review the company and give my thoughts on where it stands leading into the numbers.

Insights for Q2 earnings

PLNT's Q1 numbers tell a story of what to expect in its upcoming earnings. Sales of $248mm were +12% YoY, driven by royalty upsides + new store openings. System-wide same-store sales growth was +6.2% YoY, against franchisee same-store sales growth of +6.3% and corporate same-store sales growth of +6.2%.

Meanwhile, management said its "Black Card" membership penetration increased to >62% (+10bps YoY) which added a few points to revenue per member. Management now guides +800bps revenue growth to $340-$350mm. It eyes adj. EBITDA of $140mm on this at the upper end, ~31% YoY growth. Critically, it has targets of 45% adj. EBITDA margins by FY'26.

Compelling catalysts:

• New store openings provide an extensive runway for management to deploy capital - I would go so far as to say this is an advantage in the current climate. PLNT opened 25 new stores in Q1 2024 and plans to open ~1,000 new stores under existing commitments. It depends on how management deploys the funds, but the runway is extensive (~+50% on the current system).
• PLNT tested different price points for the Classic Card membership, ultimately deciding to increase the price from $10 to $15 for new members starting this summe r. Notably, it faced social media backlash for this, and management reported a higher churn rate during the quarter as a result. Long term, the results are unclear, but it's a bold move for a business known for its low-cost offerings. The risk is to the consumer - we've heard a lot about the low-end consumer and how they're positioned, no telling whether this is all of PLNT's market, though.
• PLNT plans to refinance a $600 million tranche of debt due in September 2025 - in keeping with the points on capital deployment above, reduced cash obligations can be seen as free cash flow.

Overall my view of the company's position going into its Q2 numbers is constructive, but there are headwinds to the investment debate as I'll discuss below. The critical takeouts are 1) the runway to deploy capital via store openings, and 2) the ambitions to drive pre-tax margins >40%. We therefore need to benchmark management against this - i.e., observing (i) new store openings, whether these remain on track to hit the projected 140-150 new stores for FY'24. This is important, as it projects ~120-130 equipment placements with these (thus a tail of revenues).

I would also urge investors to observe 1) its re-equipped sales (management reckons this will make up ~60% of total equipment sales for FY'24), 2) sales per store (management forecasts ~3-5% this year vs. 5-6% previously, I'd be looking to at least 5% for conviction in Q2), and 3) what CapEx runs in at - management guides to ~25% of sales (with ~11% or this maintenance).

Business characteristics

PLNT enjoys substantially higher pre-tax margins vs. peers (27% vs. 1.4%) given its differentiated and consumer-orientated offering (many patrons will, in my view, "cross the road" to a Planet Fitness gym). Such consumers are willing to pay a premium for this (gross margins are almost 2x industry avg.) with comparable asset turns such that ROICs are ~5 points ahead of the industry. This squares off with the economics of the business enjoying a point of differentiation with consumers.

Company filings, Seeking Alpha

Additional business characteristics worth mentioning:

• Pre-tax earnings are +$185mm vs. FY'21 on very little incremental capital. It has committed ~$900mm to produce this growth, otherwise 23% marginal ROIC. Moreover, sales are on a tremendous ramp growing each year since FY'14 at CAGR ~14.6% from $280mm to $1.1Bn in the TTM.
• More recently, management rolled back ~$8.95/share of capital to engender ~$1.56/share in NOPAT growth since FY'21. It reinvested ~35% of total earnings to grow corporate value by ~6.15%, but given the high starting multiples at the start of the testing period (>71x NOPAT, 6.5x EV/IC) the investment return is -5% with ~11.5% contraction in multiple. What you pay matters - a lot.

Company filings, author

• PLNT earns ~10-12% rolling returns on all the investor capital that's been put into the business (inc. retained earnings) - here I compare to PLNT's competitor Xponential Fitness ( XPOF ) which I believe has superior economic characteristics (see my recent analysis of it here ). PLNT's highly intangible asset/brand value (i.e., economic goodwill) sees it attract ~23-25% post-tax margins on a rolling TTM basis against capital turns of ~0.55x. XPOF does ~18-20% on 0.9x capital turnover. My numbers project PLNT and XPOF to produce ~12-13% and ~15-16% ROIC in FY'24, respectively. This leads me toward XPOF.

Company filings

• Compounding the fact is that economic profit per employee is down ~$$21K vs. FY'21 - although, it is ~+$15K vs. FY'22. There are ~1,300 more employees, but the contribution is down from 3 years ago. My view is this comes with PLNT's growth - it is adding stores rapidly which need staff fit-out. As such, the "human capital" intensity is higher - but on the upside, capital charge/employee is ~1/2 that of FY'21 as it can distribute the capital cost of staff across more sites now.

Company filings, Author

Balanced risk/reward opportunity

Critically, there are three factors supporting the view of a balanced risk/reward - 1) high expectations (momentum), 2) valuations (we're at 34x NOPAT still), and 3) the business quality nor growth commands these premiums in my view.

Valuation insights

• It's been all multiple contraction from FY'21 highs - despite the growth numbers outlined earlier, EV has traded flat since FY'22 as EV/EBIT came in from highs of 152x to ~28x as I write (Figure 8). The business is now back >4x EV/IC, which is a stretch in my view as I feel ~4x is fair.

Author, company filings

Seeking Alpha

• Around 4x EV/IC appears fair as mentioned earlier given its IP + franchise economics - this allows for the valuation multiple to fade to ~27x NOPAT by FY'26E. On the upside, compression to 30x NOPAT today gets us to ~$73/share, where it trades today. Fading the multiple to 27x supports ~$76/share by year 3 with the rate of capital deployment + projected ROICs/FCFs in my numbers (see: Appendix 1).

Author's estimates

Risks to thesis

Upside risks to the thesis include 1) greater than 15% sales growth from FY'24-26 as this gets us >$80/share valuation, 2) ROICs at 15% or more, and 3) investors paying >32x NOPAT.

On the downside, investors should be mindful of the current start of broad equity markets, and the spillover of a broader correction. This could be preceded by geopolitical risks and/or inflation and rates data.

Investors must recognize these risks in full before proceeding.

PLNT's franchise is well established and management has an extensive runway to deploy funds over in the coming years. Whilst these are positives, the rates at which it can deploy these funds aren't attractive enough to warrant current market values or valuation multiples, in my view. I would urge investors to pay close attention to the section that covers the preamble to the company's upcoming earnings. My numbers get me to ~4x EV/IC, which supports ~$73/share today, where the stock trades as I write. As such, net-net, I rate hold.

This article was written by

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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