ABM • Applied Economics

Grade 12 – Q2: Week 7-8: Module 4

First Edition, 2020

Copyright © 2020
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without
written permission from the copyright owners.

Development Team of the Module

Author: Joey T. Estigoy, T-III

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Joey T. Estigoy, T-III

Management Team:

ATTY. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent

German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar, EPS in Charge of Applied Economics

 Module

4 Maximizing Positive Business

Impact

Target

This module is dedicated for you to learn at the convenience of your home. It
is crafted to supply lifelong ideas that also supplement your self-discovery of the
lessons through activities that you need to go through. Inducing your reading ability
and comprehension skill is highly recommended; enable you to grasp the important
topics that will lead endeavor to be a productive Filipino citizen.

After going through the module, you are expected to:

Formulate recommendations and strategies on how to minimize and maximize a
business’s negative impact and positive impact, respectively. (ABM_AE12II-e-g13)

Subtasks:

1. Define what business socio-economic impact.

2. Identify the negative and positive impact of the business. 3. Prepare a
simplified SEAT(Socio-Economic Analysis Tool)
4. Analyze possible strategies on how to deal with those business impacts.
5. Formulate a strategy in maximizing positive and minimizing negative business
impact.
 OK, calm yourself in few seconds…
Pray first and Stay focus, and you’re about to start a lesson that is important
in your part!

Jumps tar t

You may start looking at the different socio economic impact of business operating
in your community and with that think how business influenced those sectors of
economy. Are you now interested? So let’s answer the Pre-test!
Activity 1 – Matching Type

Directions: Match column A (sector of economy) to column B as the socioeconomic

impact of the business, write the letter of your answer in the space provided before
the number.

column B as the socio-economic

column A (sector of economy) impact

A. exports and imports of goods

1. Consumer and services

B. standard of living,
2. Suppliers investors employment

C. tax revenues, poverty

3. Government alleviation, basic services

4. Households D. capital, income

5. International trade E. products and services

Activity 2 – Classification

Directions: Read the socio-economic impact situation and classify, write P - Positive
and N - ifs its Negative impact in the box provided.

Write P -
Positive and N
Socio-Economic
Situation - ifs its
Impact Negative
impact

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 Entry of new (TELCO)
New products and telecommunication or internet
1
services to be offered provider aside from the existing
two player

There is available
capital but there is a
New Investors, turned down or
problem with in the
reject putting their investment for
2 laying of pipes that the
the establishment of water
company may
distribution
encounter

Regulatory provision
More individuals are interested to
imposed by the
3 put up small business amid
government, like
COVID 19 pandemic
registration and tax

Stable standard of Most of the head of family in the

4 living and locality are employed or have their
employment jobs.

No available steel sheets in

Imports of raw
5 producing canned goods "de lata"
materials
in the country

Thank you for answering your first two activities!

There still succeeding activity for your success,
Have fun and good luck!

Discover

Let us light up new concepts and skills, for you to understand the lesson’s
idea. Business activities affect all inter-connected sector of economy, there are
related topics in your subject; Entrepreneurship, such as when a bank lend money
for the business owner to use as capital, suppliers deliver raw material for the
production of goods to be sold. This situation is where the business relies with
external sectors. In the other-hand, when the business owner pays his/her debt
to the bank being a financial institution it can continue its existence agenda to
provided business loan. Besides a business to business (B2B) relationship
between the supplier and business is possible if there is a sufficient supply of raw
material and there is product or service being produce. In this situation there is a
business impact with both parties that involved and need to assess if this is good

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(positive) or bad (negative). A certain business should be guided with this principle
“you cannot strategize without assessing first”. With that, there is a need to adopt
an assessment tool that evaluate and the later formulate solution.

There are many tools being use in assessment of impact, and these tools are
important not only to businesses but also to stake holders, those people who are
affected by the decision of business owners or stock holders.
A SEAT (Socio-Economic Assessment Tool) is one of the emerging method that
could cover the aspect of economic sector being affected of the business operating
within an economy or a certain place of business. The objective of the tool are; to
provide guidance on consultation techniques that are appropriate for use in the SEAT
process; and to provide guidance on the ‘line of logic’ to follow when exploring
potential issues and impacts. (Anglo American – Seat toolbox, pp35;
www.angloamerican.co.uk).
Even though you as a learner do not have an extreme economic and
management knowledge, having idea and ability to start an intermediary shift will
equip you an assessment skill and decision making.

This is a head start for you to discover within your community-businesses

coping strategy, this lesson could encourage from you as a student to suggest and
act promoting a breakthrough that might be a game changer to achieved economic
success.

You may look FIGURE 1: The Business and Economic Sectors below,
having those significant economic sectors that are connected, and may influence
another and being influenced by one of other economic sector. Disregarding one
part of the sector might disrupt the beauty of the star, that represent an economy
need to maintain and develop by minimizing negative impact and maximizing its
positive impact. The business operating within the borders of the country does
not only affect local economy it can deal with international trade, that magnet
foreign investors. As we go along this lesson it can direct you to explore much
more with the different impacts of the business.

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 FIGURE 1: The Business and Economic Sectors

Look at that figure, almost the same as you, you’re a Star!

You may draw the same for you future reference, just take a few moment to
do it!

Explore

As you go further; look around you, and be aware of the products that you and
your family enjoy and reflect where does your family member work? Is that a business
firm? And how business influenced you and family as well the community?
For you understand; focus on the impacts of business operations on various
sectors that interact with business activities as well as in production and distribution
activities. These effects are not only economic and commercial but can be social,
cultural and environmental as the operation of a business firm has spillover effects
on the environment where it operates.
And with this lesson you may identify the socio-economic impact and classify the
negative and positive effect, using tools that will help you understand on how to
minimize the bad effects and maximize the advantages of businesses in the
community and for its stakeholders.

Do not get lost, just read and you will be lead to your goal!

Please answer using a separate “Yellow Intermediate Paper” as your answer

sheet for ALL of activities!

Activity 3 – Fill-in the table

Directions:
1. Based on the matching type in Activity 1 at page 5, choose from what
sector of economy, that your family belong.

2. Write your sector of economy of choice at the table provided below

and Check () the particular socio-economic impact does business
contributes to your family.

Please
Socio-Economic impact to your
Sector of Economy Check ()
Family
Only (1) one

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 Provides product and services

As source of income and

employment
Go further… Explain why choose that sector and how does it impact your family,
you may use the space provided below.

Please answer using a separate “Yellow Intermediate Paper” as your answer sheet
for ALL of activities!

It is evident in your activities, that you and your family are sensitive with the impact
of businesses that operates in your locality. It is helpful in the conduct of this lesson
when you recall your personal experiences about products and services that you and
your family utilize and enjoy.
Before we proceed, take time to reflect every aspect that various business in your
community such as; you’re neighboring convenience or “sarisari” store, water
refilling station where your friend works, well-known fast-food chain,
telecommunication and electric companies how their socio-economic impacts.
And from that imagine that you are a business owner wants to apply your
strategies to improve the impact of business to every economic sector and
stakeholders in your community.

IMPACT ON THE CONSUMER

Let us first look after some of the positive impacts of the business to
consumer. It brings new product or services available for the consumer whatever
their reason such as its price, usefulness or it may be a substitute. The business
impact that focus on consumer’s benefits from the products or services. In the
negative impact of the business to consumer, when the product or services does
not meet the expectation of the buyer, due to sub-standard material being use as
raw material. This situation may trigger consumer to look for something new
resulting to the business to innovate their product through enhancing its features.
This strategy will give a new choice for consumer that will keep them ahead of the
competition.

Looking after the underlined words, you may use this information as
supplement for the upcoming activities.

SEAT (Socio-Economic Assessment Toolbox ) for Business Impact to Consumer

Positive Impact Negative Impact

brings product or services when the product or services does not
new meet the expectation
available
Business Strategy

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to Maximize to Minimize
consumer’s benefits from the products sub-standard material being use as raw
or services material

TABLE 1: Sample of Simplified SEAT (Socio-Economic Assessment Toolbox) for

Business Impact to Consumer

IMPACT ON THE SUPPLIERS AND INVESTORS

Suppliers and investors can have an opportunity, once there is a new

business. Like in the instance of establishing a new resort or hotel in a certain
locality, it will serve as opportunity for the other business to supply such as food
ingredients, beverages, laundry shop and photographers.
A negative impact arises when the new business does not priorities the
supply that is available in the community. Instead it acquires raw material from
another area, since the local supplier cannot meet the volume of order. A possible
strategy of a local supplier is to increase their production in able to meet the
business raw material requirement.
A well sounded business, is pleasing with investors attention to invest in
the production, these investors may lend money for business capital or tools and
materials. This investment grant, warns the business to avoid inappropriate
expenditure that is not an income generating. Investors are after a good return of
investment when they engage to business transaction. Having this harmonious
flow between supplier-investor and business manifest an economic growth within
the community where the business is operating.

IMPACT ON THE GOVERNMENT

The government acts as a regulatory body of every existing or new business;

this is to ensure an equal protection between concern parties. There are prevailing
law and policy with regards to business owners, stakeholders, to the community
and other concern party. Businesses should secure permit and license to operate
from the local government unit, Department of Trade and Industry (DTI), Bureau
of Internal Revenue (BIR) for its personal and business taxes of owner and to its
employees. Many other business requirement in securing permit, license and
franchise is necessary to process by government agency such as DENR, Health
office, BJMP, DTI, DENR for Environmental Compliance Certificate (ECC) and etc.
Business pay tax as a revenue for local and national government to be use
as budget for the continuity of social service, education, national defense,
infrastructures, poverty alleviation and other government programs led for
development. When the business fails to pay appropriate taxes, it may result to
tax fraud or case and closure. Businesses tend to loss their trust once there is a
government projects are poorly implemented while they are paying high taxes,
there is an issue of corruption and other concern that slowing their production.
The government needs to continue implementation of programs to improve
business condition for all enterprises, social welfare, public health service,
sufficient infrastructure; in this manner businesses are confident in paying their

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taxes. On the other hand the government also provide subsidies and assistant to
business, I am sure, you where able to learn it from your previous lesson in this
subject

IMPACT TO HOUSEHOLDS

The emerging of new business during this pandemic is a sign that we, Filipinos are
survivors. Emerging of new businesses is an opportunity of employment and
discovery of new skills such as planting, painting or art working, vlogging using
Youtube, on-line selling, food deliver etc. Business helps improve household standard
of living through better paying jobs that companies offer.
There are minimal flaws of business when products are harmful to health
or cause danger such those contains toxic chemicals and plastic waste. Business
should reduce or eliminate its use of non-biodegradable materials in production.
Household in the otherwise is the primary consumer and source of manpower
for business. The growing population is an indication of additional consumer and
causing a massive increase in unemployment rate. As a student this impact is directly
affecting you and your family.

IMPACT TO INTERNATIONAL TRADE

International trade is the combination of all national economies into global

market, so called globalization. Local business can engage into import of export of
commodities both are advantage if manage properly by the office of the President
through its led agencies the Department of Foreign Affairs (DFA) , Bureau of
Custom (BOC) and Department of Trade and Industry (DTI. The Philippines is
member of international institutions advocating trade partnership such as
AsiaPacific Economic Cooperation (APEC) with 21 member nations and
Association of Southeast Asian Nation (ASEAN) with 10 countries in the South
East Asia. International trade assumes that it’s advantageous to nation or else
countries would not participate.
But there is always a loop hole, wherein local products are being set aside and
buyers tend to buy imported goods, unable to poster Patriotism. Products that are
abundant in our country is not the priority of importation Exporting product or
services that are plenty to us is a win-win solution, since it will gain foreign
currency remittances in terms of service of Overseas Filipino Workers (OFW) and
dollar payment of international business partners.
The country’s existing companies does not only represent local businesses but it
is a mixture of International investment. Because of globalization country to
country capital movements became possible. Foreign own companies can operate
within the country’s territories, with a strict compliance of existing trade policies
between concern company and country. Example of foreign business ventures are;
Shell Philippines Inc, Nestle Philippines Inc. and Toyota Motor Corporation.

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 FIGURE 2: Economic Sectors Impact to Business

In FIGURE 2: Economic Sectors Impact to Business, it shows an impact are

coming from the external economic sectors, having a different positive or negative
outcome, Business needs to plan enable to minimize or avoid negative impact and
keep positive impact coming, ensuring the future of the business.
Below is the FIGURE 3: Business Impact to Economic Sectors, represent
the impact of the business to external economic sectors, those are affected with the
business present.

FIGURE 3: Business Impact to Economic Sectors

The combination of outgoing and incoming impact is presented in FIGURE 4:

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Impact between
Business and
Economic Sectors, in
which a business
can be influenced
by external economic
sector and also had an
impact to other
external economic
sector.

FIGURE 4: Impact between Business and Economic Sectors

Hope you enjoyed your Ride to Read!

Just keep your focus your getting near, hold on your gear!

Deepen

You are tasked to fill up according to your own choice of business that is
present in your locality; this is a great activity that you can apply your knowledge
or skills into real life situations.

Activity 4 – Did you Feel it? Fill it up!

Directions: Think of an existing business established in your locality and fill up the
needed information with your own perception.

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 Example: convenience store, gasoline station, fast-food restaurant, lumber,
bank and etc.

Business Name:
_________________________________________________________
Business Location:
______________________________________________________

List down three (3) inputs needed - example: employee, raw materials (ingredients)
capital (investment)

1
2
3

Listdown three (3) outputs - such as products or services offered

1
2
3

List down two (2) related business to business (B2B) eg. fast-food restaurant buys
their utensil at the local supplier of spoon, fork and plates and bank (financial
institution lends capital to a convenience store owner.

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 It seems that you are so aware of the businesses operating in your community,
which is great! And about a moment you will discover more, and I hope you continue
your diligent participation!

Do you remember the movie Finding Nemo? If you do, just make sure you have
your Memo. (synonym of Note)
Smile and we go for extra mile!

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References

Book:

Rosemary P. Dinio, PhD and George A. Villasis. 2017. Applied Economics. Manila: Rex
Book Store, Inc.

Websites:

Anglo American
https://www.angloamerican.com/~/media/Files/A/Anglo-American-
PLCV2/documents/communities/seat-v3-jan-15-2.pdf

lumen learning.com https://courses.lumenlearning.com/boundless-

economics/chapter/consumersurplus/

OPENPRESS.USAK.CA
https://openpress.usask.ca/entrepreneurshipandinnovationtoolkit

smallbusiness.ng https://smallbusiness.ng/why-is-business-important-to-society/

saylordotorg.github.io https://saylordotorg.github.io/text_a-primer-on-sustainable-
business/s04-04economic-impact.html

www.unicef.org
https://www.unicef.org/csr/css/How_Business_Affects_Us_report_on_children_s_c
onsultation.pdf

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