SOCIOECONOMIC

FACTORS AFFECTING
BUSINESS AND INDUSTRY:

PRESENTED BY: MS. JERLYN ESTORES

WHAT IS SOCIO-ECONOMIC?

Socioeconomic – field of the study that examines social and

economic factors to better understand how the combination of both
influences something.

WHAT IS SOCIO-ECONOMIC IMPACT STUDY?

Socio-economic impact, studies on evaluating the impact development

on community social and economic welfare.
DEVELOPMENT IMPACTS
CAN BE ASSESSED IN TERMS
OF :
THE GOAL OF SOCIOECONOMIC STUDY

- Is generally to bring about socioeconomic development,

usually by improvements in metrics such as Gross Domestic
Product (GDP), life expectancy, literacy, levels of
employment, etc.

- Socioeconomic factors are characteristics that define the

quality of life in a society. They influence the behaviors,
attitudes, tastes and life-styles of individuals.
SOCIAL FACTORS AFFECTING THE
BUSINESS

Population Growth Rate - Population often takes

advantage of the social factors. The supply and demand
of goods and services in an economy can change with the
structure of the business. Decline in birth rates mean
demand will decrease. It also indicates greater
competition as the total consumers fall.
SOCIAL FACTORS AFFECTING THE
BUSINESS

Change in Social Preference - Social preferences relating to

fashion or fad are continuously changing. If a business refuses to
adapt to changing social preferences, its sales will decline and
business will fail.

Health Consciousness - Social factors change people’s attitude.

A good example is people’s attitude towards healthy diet.
Because of this, businesses like fitness center
and demand for organic food changes.
SOCIAL FACTORS AFFECTING THE
BUSINESS

Values, Beliefs and Practices - A business must be aware of

the people’s social preferences regarding its needs and wants.
These preference and needs and wants will be influences by a
population’s values, beliefs and practices.
SOCIAL FACTORS AFFECTING THE
BUSINESS

Education - A society that values higher education will provide

a better workforce that will lead to more productivity and
innovation.

Hard Work Ethics - Work ethic is a value based on hard work and
diligence. Business believe in the requirement and hard work
and its ability to enhance character. A community that
values hard work ethics, business will have access to
productive workers.
SOCIAL FACTORS AFFECTING THE
BUSINESS

Attitude towards investment - A society that supports

investment in infrastructure will have access to good
transportation and communication system.

Attitude towards green and ecological products - Consumers

with positive attitudes towards green and ecological products
are more likely to purchase green and ecological products.
ECONOMIC FACTORS AFFECTING
BUSINESS INDUSTRY

1. Inflation rate - Higher inflation rate leads to decrease in the

purchasing power of money for the people resulting to lower demand
for goods and services.

2. Interest rates - Higher interest rates will lead to decrease in

the total demand in the economy and very difficult for business to
find customers who are willing and able to buy its product. Lower
interest rates will lead to an increase in demand in the economy.
ECONOMIC FACTORS AFFECTING
BUSINESS INDUSTRY

3. Unemployment level - High level of unemployment will

greatly affect business. Unemployment people will not have
enough money to buy goods offered in the market

4. Labor costs - High cost of labor (salary/wage) will result

to higher production costs. Higher production costs will lead to
higher prices of goods and services
ECONOMIC FACTORS AFFECTING
BUSINESS INDUSTRY

5. Taxes - Higher taxes will lead to decrease in take-home pay of

an individual and decrease in demand in the economy
THE SOCIAL AND ETHICAL IMPACT OF
BUSINESS TO SOCIETY

Economic Impact on Society

• Wages and salaries paid to employees to improve their standard
of living
• Timely payment for the supplies of goods purchased on credit
from the suppliers
• The value of goods and services sold to customer
THE SOCIAL AND ETHICAL IMPACT OF
BUSINESS TO SOCIETY

Governance
• Business ethics must be the priority in every business
transaction. If businesses offer bribes in exchange of work and
other benefits, the ethics of society suffer. Corruption may raise
the price of goods and services when companies engage in
price fixing (maintaining of prices at a certain level by
agreement between competing sellers)
THE SOCIAL AND ETHICAL IMPACT OF
BUSINESS TO SOCIETY

Privacy
• All information collected from customers must be treated
confidential. Some information may be sensitive like medical
history and amount of money deposited. Businesses have a
negative impact on a society if consumers find out that companies
are not keeping such information secure or are selling it to
3rd parties. Avoid doing things that may hinder the exchange of
personal and private information that helps in business operation.
THE SOCIAL AND ETHICAL IMPACT OF
BUSINESS TO SOCIETY

Environment
• Businesses that implement environmental policies to use
energy more efficiently, reduce waste and in general lighten
their environmental footprint can reduce their internal costs and
promote a positive image of their company. The environmental
initiatives of a market leader often force competitors to take
similar action for an increase beneficial effect on the
environment.
WHAT ARE THE BENEFITS OF MEASURING
SOCIO-ECONOMIC IMPACT?

1. Obtaining or maintaining a license to operate.

2. Improving the business enabling environment
3. Strengthening value chains
4. Fueling product and service innovation
WHAT ARE THE BENEFITS OF MEASURING
SOCIO-ECONOMIC IMPACT?

Strengthening value chain

By assessing their socio-economic impact, companies are
better equipped to predict the loyalty, performance, stability
and capacity for growth of their suppliers, distributors
and retail partners - Identifying vulnerabilities and opportunities
to address them
WHAT ARE THE BENEFITS OF MEASURING
SOCIO-ECONOMIC IMPACT?

Fueling product and service innovation

- Measuring socio-economic impact can help companies better understand
the needs, aspirations, resources and incentives of their customers-
enabling them to develop new products and services and improve existing
offerings. Yet, to effectively create value for the business and its
stakeholders, measuring must be aligned with a company’s strategy
and integrated into ongoing business performance management and
reporting. As challenging as it sounds, this means redesigning the scope of
corporate strategy and processes across measurement, management and
reporting
CORPORATE RESPONSIBILITY TO
CONSUMER

Fueling product and service innovation

• Being honest, hard-working men and women are the qualities of that
most of the Filipinos are looking the business owners and their
employees. They are concerned about a profit for their efforts but they
are also concerned about their responsibilities to consumers.

• Consumers could easily identify irresponsible firms and refuse to trade

with them. However, those firms that acquire a reputation for high
quality, informative and convenient packaging, careful labeling,
consumer safety and environmental sensitivity are likely to gain profit.
CORPORATE RESPONSIBILITY TO
CONSUMER

PRODUCT QUALITY
A consumer has the right to expect uniform product quality.
They have the right to expect that what they seen in their
advertisement will be the same when they purchase it. The quality of
the products that have been established should not be changed/
lowered to make more attractive for the existing and new
customers. Firms that give more attention in monitoring the quality
of their products are more successful than those who are not
responsible enough to do it.